House Sponsors: FRANKS-CROTTY-HOFFMAN-DAVIS,MONIQUE-SHARP, FOWLER, FLOWERS, MCCARTHY, BROSNAHAN, REITZ, DART, LYONS,JOSEPH, MCGUIRE, SCOTT, HARTKE, MCKEON, BOLAND, SILVA, BRUNSVOLD, SMITH,MICHAEL, SLONE, MURPHY, BUGIELSKI, PUGH, JONES,LOU, DAVIS,STEVE, STROGER, BRADLEY, LOPEZ, GASH, YOUNGE, OSTERMAN, HAMOS, ACEVEDO, BURKE, DELGADO, GIGLIO, FEIGENHOLTZ, GILES, LANG, TURNER,ART, CURRY,JULIE, FRITCHEY, GRANBERG, HOWARD, JONES,SHIRLEY, KENNER, NOVAK, MORROW, MAUTINO AND CAPPARELLI. Senate Sponsors: HALVORSON-OBAMA-WALSH,L-LIGHTFORD-SMITH Short description: PRESCRIPTION DRUG DISCOUNT ACT Synopsis of Bill as introduced: Creates the Senior Citizen Prescription Drug Discount Program Act. Provides that the Department of Revenue shall (i) enroll eligible senior citizens into the Program to qualify them for a discount on the purchase of prescription drugs at an authorized pharmacy, (ii) enter into rebate agreements with drug manufacturers, and (iii) reimburse pharmacies for the cost of providing discounts using the proceeds from the manufacturer rebate agreements. Provides that eligible seniors are Illinois residents 65 years of age or older. Provides that any person who is eligible for pharmaceutical assistance under the Senior Citizens and Disabled Persons Property Tax Relief and Pharmaceutical Assistance Act is eligible for this Program. Sets out provisions for the administration of the Act and authorizes the Department to promulgate rules to administer the Act. Provides that rebates paid by drug manufactures to the Department be deposited into the Senior Citizen Prescription Drug Discount Program Fund to be used to administer the Act. Amends the State Finance Act to create the Fund. Effective July 1, 2000. HOUSE AMENDMENT NO. 1. Deletes everything. Reinserts the provisions of the bill as introduced with the following changes: provides that the Department of Revenue shall compensate authorized pharmacies subject to the requirements of the State Prompt Payment Act and may adjust the amount of compensation to authorized pharmacies based upon the availability of funds in the Senior Citizen Prescription Drug Discount Program Fund; requires drug manufacturers to enter into rebate agreements under the Program for all prescription drugs sold in Illinois; removes language setting negotiating strategies for the Department; provides that the Department shall deposit the enrollment fees collected into the Senior Citizen Prescription Drug Discount Program Fund and separately account for the fees; changes the size of a prescription covered from one lasting 34 days to one lasting 90 days; removes language about assignment of benefits under the Program; and makes other changes. Effective July 1, 2000. STATE MANDATES NOTE, H-AM 1 (Department of Commerce and Community Affairs) HB 3036 (H-am 1) does not create a State mandate. HOME RULE NOTE, H-AM 1 (Department of Commerce and Community Affairs) HB 3036 (H-am 1) does not pre-empt home rule authority. FISCAL NOTE, H-AM 1 (Department of Revenue) Implementation of HB 3036 will require at least 210 additional employees and, including salaries, benefits and related equip- ment, with corresponding costs for Systems and Programming sup- port, is estimated to cost $13.65 million. Based on current estimates, the $25 fee charged to participants should offset the calculated implementation costs. The Department cannot determine the overall shared impact to the State, or to the manufacturers, but it is believed that HB 3036 will have a potentially significant fiscal impact to the State. Under the bill, the Department is clearly liable for reimbursement pay- ments to pharmacies, at the expense of the Illinois taxpayers, even before the requisite manufacturer rebates may be received to cover the costs incurred by the pharmacies. With the total program cost estimated at $706.5 million, the State's potential interim liability is likely to be significant. PENSION NOTE, H-AM 3 (Pension Laws Commission) The legislation would not affect the accrued liabilities or annual cost of any Illinois public pension fund or retirement system. STATE DEBT NOTE, H-AM 3 (Ill. Economic and Fiscal Commission) HB 3036, as amended, would not change the amount of authoriza- tion for any type of State-issued or State-supported bond and, therefore, would not affect the level of State indebtedness. CORRECTIONAL NOTE, H-AM 3 (Department of Corrections) There would be no corrections population or fiscal impact. STATE MANDATES NOTE, H-AM 3 (Department of Commerce and Community Affairs) Same as previous mandate note, H-am 1. HOME RULE NOTE, H-AM 3 (Department of Commerce and Community Affairs) Same as previous home rule note, H-am 1. BALANCED BUDGET NOTE, H-AM 3 (Bureau of the Budget) Since this bill is not a supplemental appropriation bill, the Balanced Budget Note Act is inapplicable. JUDICIAL NOTE, H-AM 3 (Administrative Office of Ill. Courts) This legislation would neither increase or decrease the number of judges needed in the State. HOUSE AMENDMENT NO. 3. Deletes everything. Reinserts the provisions of House Amendment No. 1 with the following changes: (1) provides that the discount program begins January 1, 2001 and that, for drugs not listed on the Federal Supply Schedule, the eligible seniors shall pay the AWP minus 35%; (2) provides that the compensation paid by the Department of Revenue to authorized pharmacies shall be from the Senior Citizen Prescription Drug Discount Program Fund and that the amount paid shall be the difference between the amount paid by eligible seniors and the AWP minus 10% (now, the amount above the Federal Supply Schedule price charged to a participant in the Program up to the AWP minus 10%); (3) instead of requiring rebate agreements for all manufacturers with prescription drugs sold in Illinois, requires a rebate agreement under this Program for those that already have an agreement with any payor of prescription drug benefits that results in a reduction in price for prescription drugs sold by an authorized pharmacy; (4) provides that, within 30 days after the effective date of this amendatory Act of the 91st General Assembly, the State Comptroller shall direct and the State Treasurer shall transfer $27,000,000 from the General Revenue Fund to the Senior Citizen Prescription Drug Discount Program Fund to facilitate the payment of reimbursements to authorized pharmacies, with repayment, subject to the obligation to reimburse authorized pharmacies, beginning July 1, 2001, with 7.5% interest per annum; (5) provides that the Department may reduce the annual enrollment fee by rule if the revenue from the enrollment fees is in excess of the costs to carry out the Program, rather than that the Department may reduce the dispensing fee if annual enrollment fees exceed Program administration costs; and (6) makes other changes. Effective July 1, 2000. FISCAL NOTE, H-AM 3 (Department of Revenue) The estimated administrative costs of HB 3036, as amended, based on 210 additional employees, would be $13.65 million. The fee charged to participants in the program should offset these estimated administrative costs. The transfer of $27 million from GRF to the Senior Citizen Prescription Drug Discount Program Fund is to be paid back to GRF, with interest at 7.5%, over the program's first year; this transfer creates an initial fiscal impact to GRF of $27 million. The Department is required to pay pharmacy claims for excess charges; these claims are to be paid from the proceeds of drug manufacturer rebates. The repayment schedule will not result in a cost to the State as long as the initial $27 million transfer and the manufacturer rebates keep pace with the claims for payment from member pharmacies. The Department believes the State is liable for payment of all valid claims filed. The maximum total cost of the rebate program is estimated to be $706.5 million. If rebate funds are not sufficient to keep pace with pharmacy claims and the initial $27 million transfer has been exhausted, HB 3036, as amended, will have a potentially significant fiscal impact to the State. HOUSING AFFORDABILITY NOTE, H-AM 3 (Ill. Housing Development Authority) There is no fiscal impact on a single-family residence. Last action on Bill: SESSION SINE DIE Last action date: 01-01-09 Location: House Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 2 SENATE - 0 END OF INQUIRY Full Text Bill Status