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91_SB1606
LRB9113098ACtm
1 AN ACT creating the Fair Pricing of Prescription Drugs
2 Act.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 1. Short title. This Act may be cited as the
6 Fair Pricing of Prescription Drugs Act.
7 Section 5. Definitions. For the purposes of this Act:
8 "Board" means the Prescription Drug Price Fairness Review
9 Board.
10 "Department" means the Department of Revenue.
11 "Director" means the Director of Revenue.
12 Section 10. Application of the Act. This Act shall not
13 apply to prices established under contracts entered into on
14 or before the effective date of this Act.
15 Section 15. Prescription Drug Price Fairness Review
16 Board.
17 (a) The Prescription Drug Price Fairness Review Board is
18 created to establish a price schedule of maximum manufacturer
19 prices for prescription drugs sold in Illinois. The Board
20 shall consist of 5 members appointed by the Governor, one of
21 whom shall be a pharmacist, one of whom shall be a physician,
22 one of whom shall be a health care provider who is not a
23 physician, and 2 of whom shall represent the interests of
24 consumers. The 2 members representing the interests of
25 consumers shall not have a financial or other affiliation
26 with a health care provider, health care facility, health
27 insurer, or pharmaceutical company. Members shall be
28 appointed to a term of 3 years, except that of the initial
29 members, one shall be appointed for a term of one year, 2
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1 shall be appointed for a term of 2 years, and 2 shall be
2 appointed for a term of 3 years. Initial appointments to the
3 Board shall be made no later than July 1, 2000. Members
4 shall receive compensation and reimbursement of expenses.
5 (b) The first price schedule shall be established on or
6 before January 1, 2001 and shall take effect on February 1,
7 2001, unless the Board determines that alternative mechanisms
8 have been implemented to ensure that prescription drugs are
9 sold in Illinois at prices that do not exceed the Board's
10 price schedule.
11 Section 20. Powers of the Board. In carrying out its
12 duties, the Board shall have all the powers necessary to
13 carry out the purposes of this Section, including:
14 (1) those general powers provided to a business
15 corporation by law;
16 (2) the power to adopt administrative rules,
17 including the adoption of emergency rules to implement
18 the provisions of this Act in a timely manner;
19 (3) the power to collect from any manufacturer,
20 wholesaler, or retailer of prescription drugs sold in
21 Illinois such information as is necessary for the Board
22 to carry out its duties under this Act;
23 (4) the power to require a manufacturer,
24 wholesaler, or retailer of prescription drugs sold in
25 Illinois to file with the Board such data, statistics,
26 schedules, or information as the Board may deem necessary
27 to enable it to carry out its duties; and
28 (5) the power to examine the books and accounts of
29 a manufacturer, wholesaler, or retailer of prescription
30 drugs sold in Illinois, to subpoena witnesses and
31 documents, and to administer oaths to witnesses and
32 examine them on all matters over which the Board has
33 jurisdiction.
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1 Section 25. Prescription drug price schedule.
2 (a) The Board shall establish, by rule or by order after
3 notice and hearing, a price schedule of maximum manufacturer
4 prices for all prescription drugs sold in Illinois. The Board
5 shall review the price schedule on or before January 1 of
6 each year, and may revise the price schedule at any time as
7 circumstances warrant.
8 (b) The price schedule established by the Board shall
9 prohibit excessive and discriminatory pricing of prescription
10 drugs sold in Illinois.
11 (c) The Board shall establish a price schedule of
12 maximum manufacturer prices for prescription drugs sold in
13 Illinois after consideration of (i) the prices charged for
14 prescription drugs in other countries, (ii) the prices listed
15 on the Federal Supply Schedule, (iii) the prices charged to
16 governmental agencies, health care facilities, health
17 insurance companies, and other purchasers, (iv) and other
18 relevant information. The maximum manufacturer price of a
19 prescription drug shall not exceed the manufacturer price for
20 the drug sold in Canada.
21 (d) The wholesale price for prescription drugs sold in
22 Illinois shall be the maximum manufacturer's price listed on
23 the price schedule established by the Board under this Act
24 plus any reasonable, customary cost of doing business and
25 profit markup by the wholesaler, as determined by the
26 wholesaler and subject to review as provided by Section 45.
27 (e) The retail price for prescription drugs sold in
28 Illinois shall be the maximum manufacturer's price listed on
29 the price schedule established by the Board under this Act,
30 plus any reasonable, customary cost of doing business and
31 profit markup by the wholesaler, plus any reasonable,
32 customary cost of doing business and profit markup by the
33 retailer, as determined by the retailer and subject to review
34 as provided by Section 45.
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1 (f) The Board shall establish a reasonable dispensing
2 fee for retail pharmacies. In establishing the retail
3 dispensing fee, the Board shall consider the benefits to
4 Illinois consumers in preserving local retail pharmacies, and
5 the dispensing fee established under the Medicaid program.
6 (g) A manufacturer of prescription drugs sold in
7 Illinois may request that the Board grant an exemption from
8 the Board's price schedule. The manufacturer shall have the
9 burden of proof in any request for exemption. In considering
10 the request for exemption, the Board may consider the
11 following:
12 (1) changed circumstances since the price schedule
13 was established;
14 (2) reasonable costs of production, distribution,
15 marketing, and research;
16 (3) public health and safety; and
17 (4) any other relevant information.
18 Section 30. Implementation of the prescription drug
19 price schedule.
20 (a) The Director of Revenue shall implement the
21 prescription drug price schedule established by the Board.
22 (b) The Director shall distribute the price schedule
23 established by the Board to all retail pharmacies in
24 Illinois, and shall post the price schedule on the
25 Department's internet web site.
26 (c) Twice each year, the Director shall conduct and
27 release a survey of representative retail prices for the most
28 commonly used prescription drugs in Illinois.
29 Section 35. Licensing of manufacturers, wholesalers, and
30 retailers.
31 (a) No person shall sell a prescription drug in Illinois
32 unless the manufacturer, wholesaler, and retailer of the
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1 prescription drug is licensed by the Director.
2 (b) No agent or other representative of a manufacturer
3 shall offer in this State any product, promotional, or other
4 information concerning a prescription drug unless the agent
5 or other representative is licensed by the Director.
6 (c) The Director shall require each licensee to pay an
7 annual fee established by rule for the purpose of supporting
8 the activities of the Board and the Director under this
9 Section. The annual license fee for wholesalers, retailers,
10 and agents and other representatives shall be $50. The annual
11 license fee for manufacturers shall be established by the
12 Director to reflect the relative gross revenues of
13 manufacturers on sales of their prescription drugs in
14 Illinois.
15 (d) The Director, in consultation with the Office of the
16 Attorney General, shall establish by rule standards of
17 conduct to protect consumers in connection with the
18 prescription drug industry.
19 (e) A license granted under this Section may be revoked
20 upon a finding by the Director that a consumer protection
21 standard adopted pursuant to this Section has been violated,
22 that the licensee has sold a prescription drug at a price
23 that exceeds the maximum price listed on the manufacturer
24 price schedule established by the Board, or in the case of a
25 wholesaler or retailer, that the licensee has sold a
26 prescription drug at a price in violation of the standards
27 established in this Section.
28 Section 40. Powers of the Director.
29 (a) The Director shall have all the powers necessary to
30 carry out the purposes of this Act, including the following:
31 (1) the power to adopt emergency rules to implement
32 programs in a timely manner;
33 (2) the power to collect from a manufacturer,
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1 wholesaler, or retailer of prescription drugs sold in
2 Illinois such information as is necessary for the
3 Director to carry out his or her duties under this Act;
4 (3) the power to examine books and accounts of any
5 manufacturer, wholesaler, or retailer of prescription
6 drugs sold in Illinois, to subpoena witnesses and
7 documents, to administer oaths to witnesses and to
8 examine them on all matters of which the Director has
9 jurisdiction.
10 (4) the power to require a manufacturer,
11 wholesaler, or retailer of prescription drugs sold in
12 Illinois to file with the Director such data, statistics,
13 schedules, or information as the Director may require to
14 enable the Director to carry out his or her duties.
15 Section 45. Enforcement. The following shall constitute,
16 and be subject to the rights, remedies, and other judicial
17 procedures established for consumer fraud and deceptive
18 business practices in the Consumer Fraud and Deceptive
19 Business Practices Act:
20 (1) a violation of a provision of this Act, or a
21 rule adopted pursuant to this Act;
22 (2) The sale of a prescription drug in Illinois in
23 excess of a maximum manufacturer's price authorized by
24 the Board's price schedule established under this Act.
25 (3) The sale of a prescription drug in Illinois by
26 a wholesaler or retailer in excess of the standards
27 established in subsections (d), (e), and (f) of Section
28 25.
29 Section 50. Report to the General Assembly. The Board
30 and the Director shall report to the General Assembly on or
31 before January 1 of each year on prescription drug prices in
32 Illinois. The report must include (i) the Board's price
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1 schedule of manufacturer prices established for prescription
2 drugs sold in Illinois; (ii) the Director's surveys of retail
3 prices for the most commonly used prescription drugs in
4 Illinois; (iii) a financial analysis of the effect of the
5 Illinois prescription drug fair pricing program on
6 prescription drug costs in Illinois, including financial
7 savings to public and private health insurance programs and
8 financial savings to individual Illinois employers; and (iv)
9 any other findings and recommendations offered by the Board
10 and the Director.
11 Section 55. The Illinois Pharmanet information network.
12 (a) The Director of Public Health shall establish the
13 Illinois Pharmanet information network to educate physicians
14 and patients about the best therapeutic and cost-effective
15 utilization of prescription drugs. The network shall be
16 designed to operate in a manner similar to the Pharmanet
17 program administered by the province of British Columbia.
18 (b) The Illinois Pharmanet information network shall
19 develop and maintain a database to provide physicians,
20 patients, and pharmacies with information concerning the
21 following:
22 (1) the best practices for drug therapies for
23 medical diseases and conditions;
24 (2) the best prices for prescription drugs with
25 each therapeutic class of prescription drugs;
26 (3) patient drug interaction, allergy, and
27 sensitivity, and other information relating to patient
28 health and safety.
29 Section 60. Legislative Study Committee on Prescription
30 Drugs.
31 (a) There is hereby created a Legislative Study
32 Committee on Prescription Drugs to study the way to obtain
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1 the lowest drug prices for citizens of Illinois. The
2 Committee shall consist of 10 members of the House of
3 Representatives and the Senate; 3 members appointed by the
4 President of the Senate, 3 members appointed by the Speaker
5 of the House of Representatives, 2 members appointed by the
6 Minority Leader of the Senate, and 2 members appointed by the
7 Minority Leader of the House of Representatives.
8 (b) The Committee, working with the Director of Public
9 Health, shall issue a report by December 31, 2000 on the best
10 therapeutic and cost-effective utilization of prescription
11 drugs.
12 Section 65. Rules. The Board and the Director of
13 Revenue shall file with the Joint Committee on Administrative
14 Rules the rules necessary to implement this Act on or before
15 October 1, 2000. Such rules may be filed as emergency rules.
16 Section 70. Report. On or before January 1, 2002, the
17 Director of Revenue shall file a report with the
18 appropriation committees of the Senate and the House of
19 Representatives. The report shall contain a financial
20 analysis of the effect of the Illinois prescription drug fair
21 pricing program on prescription drug costs for Illinois,
22 including financial savings to public and private health
23 insurance programs, individual citizens of Illinois, and
24 Illinois employers.
25 Section 999. Effective date. This Act takes effect upon
26 becoming law.