[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ House Amendment 001 ] |
91_HB3036ham003
LRB9110165SMdvam10
1 AMENDMENT TO HOUSE BILL 3036
2 AMENDMENT NO. . Amend House Bill 3036, AS AMENDED,
3 by replacing the title with the following:
4 "AN ACT concerning discount prescription drugs for senior
5 citizens."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 1. Short title. This Act may be cited as the
9 Senior Citizen Prescription Drug Discount Program Act.
10 Section 5. Findings. The General Assembly finds that:
11 (a) Although senior citizens represent 12% of the
12 population, they use on average 37% of prescription drugs
13 that are dispensed.
14 (b) Senior citizens in the United States without
15 prescription drug insurance coverage pay the highest prices
16 in the world for needed medications.
17 (c) High prescription drug prices force many Illinois
18 seniors to go without proper medication or other necessities,
19 thereby affecting their health and safety.
20 (d) Prescription drug prices in the United States are
21 the world's highest, averaging 32% higher than in Canada, 40%
-2- LRB9110165SMdvam10
1 higher than in Mexico, and 60% higher than in Great Britain.
2 (e) Prescription drug prices listed on the Federal
3 Supply Schedule that serve the Veterans Administration, the
4 Department of Defense, and the Coast Guard average 52% below
5 the non-federal average manufacturer's price.
6 (f) Regardless of household income, seniors without
7 prescription drug coverage are often just one serious illness
8 away from poverty.
9 (g) Reducing the price of prescription drugs would
10 benefit the health and well-being of all Illinois senior
11 citizens by providing more affordable access to needed drugs.
12 (h) Drug prices on the Federal Supply Schedule are
13 negotiated by the Department of Veterans Affairs and are the
14 best publicly available indicator of the prices that drug
15 companies charge their favored customers.
16 Section 10. Purpose. The purpose of this Program is to
17 require the Department of Revenue to establish and administer
18 a program the will enable eligible senior citizens to
19 purchase prescription drugs at discounted prices.
20 Section 15. Definitions. As used in this Act:
21 "Authorized pharmacy" means any pharmacy registered in
22 this State under the Pharmacy Practice Act of 1987 and
23 approved by the Department.
24 "AWP" or "Average wholesale price" means the amount
25 determined from the latest publication of the Blue Book, a
26 universally subscribed pharmacist reference guide annually
27 published by the Hearst Corporation. "AWP" or "Average
28 wholesale price" may also be derived electronically from the
29 drug pricing database synonymous with the latest publication
30 of the Blue Book and furnished in the National Drug Data File
31 (NDDF) by First Data Bank (FDB), a service of the Hearst
32 Corporation.
-3- LRB9110165SMdvam10
1 "Department" means the Illinois Department of Revenue.
2 "Director" means the Director of Revenue.
3 "Drug manufacturer" means any entity located within or
4 outside Illinois that is engaged in (i) the production,
5 preparation, propagation, compounding, conversion, or
6 processing of prescription drug products covered under the
7 Program, either directly or indirectly by extraction from
8 substances of natural origin, independently by means of
9 chemical synthesis, or by a combination of extraction and
10 chemical synthesis or (ii) the packaging, repackaging,
11 leveling, labeling, or distribution of prescription drug
12 products covered under the Program. "Drug manufacturer",
13 however, does not include a wholesale distributor of drugs or
14 a retail pharmacy licensed under Illinois law.
15 "Eligible senior" means a person who is (i) a resident of
16 Illinois and (ii) 65 years of age or older.
17 "Federal Supply Schedule" or "FSS" means a price
18 catalogue containing goods available for purchase by federal
19 agencies. Drug prices on the FSS are negotiated by the
20 (U.S.) Department of Veterans' Affairs and are the best
21 publicly available indicator of prices drug companies charge
22 favored customers.
23 "Prescription drug" means any prescribed drug that may be
24 legally dispensed by an authorized pharmacy.
25 "Program" means the Senior Citizen Prescription Drug
26 Discount Program created under this Act.
27 "Rules" includes rules promulgated and forms prescribed
28 by the Department.
29 Section 20. The Senior Citizen Prescription Drug Discount
30 Program. The Senior Citizen Prescription Drug Discount
31 Program is established to protect the health and safety of
32 senior citizens. The Program shall be administered by the
33 Department. The Department shall (i) enroll eligible seniors
-4- LRB9110165SMdvam10
1 into the Program to qualify them for a discount on the
2 purchase of prescription drugs at an authorized pharmacy,
3 (ii) enter into rebate agreements with drug manufacturers,
4 and (iii) reimburse pharmacies for the cost of providing
5 discounts using the proceeds from the manufacturer rebate
6 agreements.
7 Section 25. Prescription drug prices.
8 (a) Beginning on January 1, 2001, the amount paid by
9 eligible seniors enrolled in the Program to authorized
10 pharmacies for prescription drugs may not exceed prices
11 listed on the Federal Supply Schedule plus a dispensing fee
12 calculated as provided in Section 3.16 of the Senior Citizens
13 and Disabled Persons Property Tax Relief and Pharmaceutical
14 Assistance Act. Nothing in this Act precludes any authorized
15 pharmacy from charging less than the listed price on the
16 Federal Supply Schedule. The Department must provide the
17 applicable Federal Supply Schedule to authorized pharmacies.
18 For prescription drugs that are not listed on the Federal
19 Supply Schedule, the amount paid by eligible seniors enrolled
20 in the Program to authorized pharmacies may not exceed the
21 AWP minus 35% plus a dispensing fee calculated as provided in
22 Section 3.16 of the Senior Citizens and Disabled Persons
23 Property Tax Relief and Pharmaceutical Assistance Act.
24 (b) Subject to the requirements of the State Prompt
25 Payment Act, the Department shall compensate authorized
26 pharmacies from the Senior Citizen Prescription Drug Discount
27 Program Fund for the difference between the amount paid by
28 eligible seniors for prescription drugs dispensed under the
29 Program and the AWP minus 10%.
30 Section 30. Manufacturer rebate agreements.
31 (a) Each drug manufacturer that distributes a
32 prescription drug for sale in Illinois and has an agreement
-5- LRB9110165SMdvam10
1 with any payor of prescription drug benefits that results in
2 a reduction in price for prescription drugs sold by an
3 authorized pharmacy shall also enter into a rebate agreement
4 with the Department to enable persons eligible for benefits
5 under this Program to purchase prescription drugs at a
6 discounted price. The rebate agreement shall be equal to the
7 cost to the Department for reimbursing authorized pharmacies
8 under this Act pursuant to subsection (b) of Section 25. The
9 rebate agreement shall become effective the first day of the
10 calendar quarter that begins 60 days after the date the
11 agreement is entered into.
12 (b) The Department shall develop a model rebate
13 agreement for prescription drugs dispensed on and after the
14 effective date of this Act.
15 (c) Rebate payment procedures. All rebates negotiated
16 under agreements described in this Section shall be paid to
17 the Department in accordance with procedures prescribed by
18 the Department. All rebates must be remitted to the
19 Department not later than 30 days after receipt of a request
20 for payment by the Department.
21 (d) The receipts from the rebates and moneys transferred
22 under Section 33 shall be deposited into the Senior Citizen
23 Prescription Drug Discount Program Fund, a special fund
24 hereby created in the State treasury, and shall be used,
25 subject to appropriation, to cover the cost of reimbursing
26 authorized pharmacies under this Act pursuant to subsection
27 (b) of Section 25.
28 Section 33. Transfer to Senior Citizen Prescription Drug
29 Discount Program Fund.
30 (a) Within 30 days after the effective date of this
31 amendatory Act of the 91st General Assembly, the State
32 Comptroller shall direct and the State Treasurer shall
33 transfer $27,000,000 from the General Revenue Fund to the
-6- LRB9110165SMdvam10
1 Senior Citizen Prescription Drug Discount Program Fund to
2 facilitate the payment of reimbursements to authorized
3 pharmacies. Repayment of principal and interest to the
4 General Revenue Fund shall be made so that the balance in the
5 General Revenue Fund will be restored as if the transfer to
6 the Senior Citizen Prescription Drug Discount Program Fund
7 had not been made. Upon a certification by the Department of
8 Revenue that the obligations under subsection (b) of Section
9 25 are being met, beginning on July 1, 2001, and on the 1st
10 of each month thereafter until the principal amount
11 transferred from the General Revenue Fund plus interest has
12 been repaid, the State Comptroller shall direct and the State
13 Treasurer shall transfer 1/12th of $27,000,000, or so much of
14 that amount as is necessary, from the Senior Citizen
15 Prescription Drug Discount Program Fund to the General
16 Revenue Fund plus accrued interest. The balance of the
17 amount transferred from the General Revenue Fund shall bear
18 interest at the rate of 7.5% per annum until the required
19 transfers back into the General Revenue Fund have been
20 completed.
21 Section 35. Program eligibility.
22 (a) Any person may apply to the Department for
23 participation in the Program in the form and manner required
24 by the Department. The Department shall determine the
25 eligibility of each applicant for the Program within 30 days
26 after the date of application. To participate in the Program
27 an eligible senior whose application has been approved by the
28 Department must pay $25 upon enrollment and annually
29 thereafter and shall receive a Program identification card.
30 The card may be presented to an authorized pharmacy to assist
31 the pharmacy in verifying eligibility under the Program. The
32 Department shall deposit the enrollment fees collected into
33 the Senior Citizen Prescription Drug Discount Program Fund.
-7- LRB9110165SMdvam10
1 The monies collected by the Department for enrollment fees
2 and deposited into the Senior Citizen Prescription Drug
3 Discount Program Fund must be separately accounted for by the
4 Department. If 2 or more persons are eligible for any benefit
5 under this Act and are members of the same household, each
6 participating household member shall apply to the Department
7 and pay the fee required for the purpose of obtaining an
8 identification card.
9 (b) Proceeds from annual enrollment fees, subject to
10 appropriation, shall be used by the Department to offset the
11 administrative cost of this Act. The Department may reduce
12 the annual enrollment fee by rule if the revenue from the
13 enrollment fees is in excess of the costs to carry out the
14 Program.
15 (c) Any person who is eligible for pharmaceutical
16 assistance under the Senior Citizens and Disabled Persons
17 Property Tax Relief and Pharmaceutical Assistance Act is
18 presumed to be eligible for this Program. That person may
19 purchase prescription drugs under this Program that are not
20 covered by the pharmaceutical assistance program under the
21 Senior Citizens and Disabled Persons Property Tax Relief and
22 Pharmaceutical Assistance Act by using the identification
23 card issued under the pharmaceutical assistance program.
24 Section 40. Eligible pharmacies.
25 (a) The Department shall promulgate rules to establish
26 standards and procedures for participation in the Program and
27 approve those pharmacies that apply to participate and meet
28 the requirements for participation. The Department may
29 remove the authorization of a pharmacy to participate in this
30 Program for failure to meet the standards and procedures for
31 participation established by the Department by rule. Any
32 pharmacy that has been removed as an authorized pharmacy by
33 the Department may apply for reinstatement as an authorized
-8- LRB9110165SMdvam10
1 pharmacy in accordance with standards and procedures
2 established by the Department by rule.
3 (b) The Department shall annually review the eligibility
4 of pharmacies to participate in the Program.
5 (c) The Department shall establish procedures for
6 properly contracting for pharmacy services, validating
7 reimbursement claims, validating compliance of authorized
8 pharmacies with the conditions for participation required
9 under this Act, and otherwise providing for the effective
10 administration of this Act. The Director, in consultation
11 with pharmacists licensed under the Pharmacy Practice Act of
12 1987, may enter into a written contract with any other State
13 agency, instrumentality, or political subdivision or with a
14 fiscal intermediary for the purpose of making payments to
15 authorized pharmacies pursuant to subsection (b) of Section
16 25 and coordinating the Program with other programs that
17 provide payments for prescription drugs covered under the
18 Program.
19 Section 45. The Department shall promulgate rules to
20 implement and administer the Program, which shall include the
21 following:
22 (1) Execution of contracts with pharmacies to
23 participate in the Program. The contracts shall
24 stipulate terms and conditions for the participation of
25 authorized pharmacies and the rights of the State to
26 terminate participation for breach of the contract or for
27 violation of this Act or rules promulgated by the
28 Department under this Act.
29 (2) Establishment of maximum limits on the size of
30 prescriptions that are eligible for a discount under the
31 Program, up to a 90-day supply, except as may be
32 necessary for utilization control reasons.
33 (3) Establishment of liens upon any and all causes
-9- LRB9110165SMdvam10
1 of action that accrue to a beneficiary as a result of
2 injuries for which prescription drugs covered under the
3 Program are directly or indirectly required and for which
4 the Director made payment or became liable for under this
5 Act.
6 (4) Inspection of appropriate records and audits of
7 participating authorized pharmacies to ensure contract
8 compliance and to determine any fraudulent transactions
9 or practices under this Act.
10 Section 50. Report on administration of Program. The
11 Department shall report to the Governor and the General
12 Assembly by March 1st of each year on the administration of
13 the Program under this Act.
14 Section 990. The State Finance Act is amended by adding
15 Section 5.541 as follows:
16 (30 ILCS 105/5.541 new)
17 Sec. 5.541. The Senior Citizen Prescription Drug
18 Discount Program Fund.
19 Section 999. Effective date. This Act takes effect July
20 1, 2000.".