PRINTER'S NO. 1044
No. 888 Session of 2003
INTRODUCED BY VANCE, KENNEY, E. Z. TAYLOR, PISTELLA, ADOLPH,
BALDWIN, BARD, BARRAR, BASTIAN, BELFANTI, BROWNE, BUTKOVITZ,
BUXTON, CAPPELLI, CORNELL, CORRIGAN, CRAHALLA, CREIGHTON,
DAILEY, DALLY, J. EVANS, FEESE, FICHTER, FLICK, GABIG, GEIST,
GILLESPIE, GINGRICH, GOODMAN, GRUCELA, HARHAI, HASAY,
HENNESSEY, HERMAN, HERSHEY, HORSEY, JAMES, KELLER, KIRKLAND,
LAUGHLIN, LEH, LEWIS, MACKERETH, MARSICO, McCALL, McGILL,
McNAUGHTON, MELIO, MICOZZIE, R. MILLER, S. MILLER, NAILOR,
NICKOL, O'NEILL, PALLONE, PETRI, PHILLIPS, PICKETT, RAYMOND,
READSHAW, REED, ROBERTS, ROSS, RUBLEY, SAINATO, SATHER,
SAYLOR, SCAVELLO, SCHRODER, SHANER, SOLOBAY, STEIL,
R. STEVENSON, T. STEVENSON, J. TAYLOR, THOMAS, TIGUE,
TRAVAGLIO, TURZAI, WATSON, WEBER, WILT, WRIGHT, YOUNGBLOOD,
YUDICHAK AND ZUG, MARCH 13, 2003
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES,
MARCH 13, 2003
AN ACT
1 Providing for pharmaceutical assistance for the elderly, for
2 pharmaceutical purchasing, for limited prescription drug
3 redistribution within certain health care facilities and for
4 pharmaceutical practices and cost control program; imposing
5 additional powers and duties on the Department of Aging, the
6 Department of Health, the Department of Public Welfare and
7 the Secretary of Administration; and making repeals.
8 TABLE OF CONTENTS
9 Chapter 1. Preliminary Provisions
10 Section 101. Short title.
11 Chapter 3. Pharmaceutical Matters
12 Subchapter A. Pharmaceutical Assistance for the Elderly
13 Section 301. Legislative findings.
14 Section 302. Definitions.
1 Section 303. Determination of eligibility.
2 Section 304. Physician and pharmacy participation.
3 Section 305. Drug utilization review system.
4 Section 306. Reduced assistance.
5 Section 307. Rebates for expenses prohibited.
6 Section 308. Request for proposal.
7 Section 309. Program generally.
8 Section 310. Generic drugs.
9 Section 311. Supply.
10 Section 312. Mail order system.
11 Section 313. Indication of price.
12 Section 314. Reimbursement.
13 Section 315. Nonliability.
14 Section 316. Income verification.
15 Section 317. Contract.
16 Section 318. The Pharmaceutical Assistance Contract for the
17 Elderly Needs Enhancement Tier.
18 Section 319. Board.
19 Section 320. Penalties.
20 Section 321. Prescription Drug Education Program.
21 Section 322. Outreach program.
22 Section 323. Accountability.
23 Subchapter B. Prudent Pharmaceutical Purchasing
24 Section 341. Definitions.
25 Section 342. Rebate agreement.
26 Section 343. Disposition of funds.
27 Subchapter C. Pharmacy Best Practices and Cost Control
28 Program.
29 Section 361. Definitions.
30 Section 362. Committee.
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1 Section 363. Program.
2 Chapter 51. Miscellaneous Provisions
3 Section 5101. Federal programs.
4 Section 5102. Repeals.
5 Section 5103. Effective date.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 CHAPTER 1
9 PRELIMINARY PROVISIONS
10 Section 101. Short title.
11 This act shall be known and may be cited as the
12 Pharmaceutical Reform Act.
13 CHAPTER 3
14 PHARMACEUTICAL MATTERS
15 SUBCHAPTER A
16 PHARMACEUTICAL ASSISTANCE FOR THE ELDERLY
17 Section 301. Legislative findings.
18 Finding that an increasing number of this Commonwealth's
19 elderly citizens who are living on fixed incomes are
20 experiencing difficulties in meeting the costs of life-
21 sustaining prescription drugs, the General Assembly, in its
22 responsibilities to provide for the health, welfare and safety
23 of the residents of this Commonwealth, hereby continues a
24 limited State pharmaceutical assistance program for the elderly.
25 Section 302. Definitions.
26 The following words and phrases when used in this subchapter
27 shall have the meanings given to them in this section unless the
28 context clearly indicates otherwise:
29 "A-rated generic therapeutically equivalent drug." A drug
30 product that the Commissioner of Food and Drugs of the United
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1 States Food and Drug Administration has approved as safe and
2 effective and has determined to be therapeutically equivalent,
3 as listed in "The Approved Drug Products with Therapeutic
4 Equivalence Evaluations" (Food and Drug Administration "Orange
5 Book"), with a specific "A" code designation only.
6 "Average wholesale cost." The cost of a dispensed drug based
7 upon the price published in a national drug pricing system in
8 current use by the Department of Aging as the average wholesale
9 price of a prescription drug in the most common package size.
10 "Average wholesale price." Average wholesale cost.
11 "Board." The Pharmaceutical Assistance Review Board.
12 "CMS." Center for Medicare and Medicaid Services.
13 "Department." The Department of Aging of the Commonwealth.
14 "Eligible claimant." A resident of this Commonwealth for no
15 less than 90 days, who is 65 years of age and older, whose
16 annual income is less than the maximum annual income and who is
17 not otherwise qualified for public assistance under the act of
18 June 13, 1967 (P.L.31, No.21), known as the Public Welfare Code.
19 "FDA." The United States Food and Drug Administration of the
20 Public Health Service of the Department of Health and Human
21 Services.
22 "Income." All income from whatever source derived,
23 including, but not limited to, salaries, wages, bonuses,
24 commissions, income from self-employment, alimony, support
25 money, cash public assistance and relief, the gross amount of
26 any pensions or annuities, including railroad retirement
27 benefits, all benefits received under the Social Security Act
28 (49 Stat. 620, 42 U.S.C. § 301 et seq.) except Medicare
29 benefits, all benefits received under State unemployment
30 insurance laws and veterans' disability payments, all interest
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1 received from the Federal Government or any state government or
2 any instrumentality or political subdivision thereof, realized
3 capital gains, rentals, workmen's compensation and the gross
4 amount of loss of time insurance benefits, life insurance
5 benefits and proceeds, except the first $5,000 of the total of
6 death benefits payments, and gifts of cash or property, other
7 than transfers by gift between members of a household, in excess
8 of a total value of $300, but does not include surplus food or
9 other relief in kind supplied by a government agency or property
10 tax rebate.
11 "Mail service program." A program set forth in section 312
12 to dispense prescription drugs by postal delivery service
13 designated and administered by the department and any entity
14 with which it contracts, upon an enrollee's submission of a
15 prescription and the applicable copayment.
16 "Maintenance drug." A prescription drug prescribed to an
17 individual for a chronic condition the use of which is medically
18 necessary for a consecutive period of at least 60 days.
19 "Maximum annual income." For PACE eligibility, annual income
20 which shall not exceed $14,000 in the case of single persons nor
21 $17,200 in the case of the combined annual income of persons
22 married to each other. Persons may, in reporting income to the
23 Department of Aging, round the amount of each source of income
24 and the income total to the nearest whole dollar, whereby any
25 amount which is less than 50¢ is eliminated.
26 "PACE." The Pharmaceutical Assistance Contract for the
27 Elderly program provided for in this subchapter.
28 "PACENET." The Pharmaceutical Assistance Contract for the
29 Elderly Needs Enhancement Tier provided for in this subchapter.
30 "Pharmacy." A pharmacy licensed by the Commonwealth.
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1 "Prescription drug." All drugs requiring a prescription in
2 this Commonwealth, insulin, insulin syringes and insulin
3 needles. Experimental drugs or drugs prescribed for wrinkle
4 removal or hair growth are prohibited.
5 "Private contractor." A person, partnership or corporate
6 entity that enters into a contract with the Commonwealth to
7 provide services under the provisions of this subchapter.
8 "Program." The Pharmaceutical Assistance Contract for the
9 Elderly (PACE) and the Pharmaceutical Assistance Contract for
10 the Elderly Needs Enhancement Tier (PACENET) as established by
11 this subchapter, unless otherwise specified.
12 "Provider." A pharmacy or dispensing physician enrolled as a
13 provider in the program.
14 Section 303. Determination of eligibility.
15 The department shall adopt regulations relating to the
16 determination of eligibility of prospective claimants and
17 providers, including dispensing physicians, and the
18 determination and elimination of program abuse. To this end, the
19 department shall establish a compliance unit staffed
20 sufficiently to fulfill this responsibility. The department
21 shall have the power to declare ineligible any claimant or
22 provider who abuses or misuses the established prescription
23 plan. The department shall have the power to investigate cases
24 of suspected provider or recipient fraud.
25 Section 304. Physician and pharmacy participation.
26 Any physician, pharmacist, pharmacy or corporation owned in
27 whole or in part by a physician or pharmacist enrolled as a
28 provider in the program or that has prescribed medication for a
29 claimant in the program who is precluded or excluded for cause
30 from the Department of Public Welfare's medical assistance
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1 program shall be precluded or excluded from participation in the
2 program. No physician precluded or excluded from the Department
3 of Public Welfare's medical assistance program shall have claims
4 resulting from prescriptions paid for by the program.
5 Section 305. Drug utilization review system.
6 The department shall ensure that a state-of-the-art
7 therapeutic drug utilization review system is established to
8 monitor and correct misutilization of drug therapies.
9 Section 306. Reduced assistance.
10 Any eligible claimant whose prescription drug costs are
11 covered in part by any other plan of assistance or insurance may
12 be required to receive reduced assistance under the provisions
13 of this subchapter.
14 Section 307. Rebates for expenses prohibited.
15 A system of rebates or reimbursements to the claimant for
16 prescription drugs shall be prohibited.
17 Section 308. Request for proposal.
18 (a) General.--The department shall prepare a request for
19 proposal for the purpose of providing pharmaceutical assistance
20 for the elderly within this Commonwealth. Upon the adoption of
21 the General Fund budget, the Department of Revenue shall be
22 authorized to transmit the appropriated funds in the State
23 Lottery Fund to the State Treasurer to be deposited in the
24 Pharmaceutical Assistance Contract for the Elderly Fund. This
25 fund shall consist of appropriations and interest and shall be
26 created by the State Treasurer to fund the operations of the
27 program by the department and the private contractor. Funds not
28 expended in the fiscal year in which they were appropriated
29 shall not lapse and shall be available for use in the next
30 fiscal year.
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1 (b) Additional requests.--To provide for the continued
2 operation of the program, the department shall prepare, as
3 needed, requests for proposals, in addition to that set forth in
4 subsection (a), for the purpose of providing pharmaceutical
5 assistance for the elderly within this Commonwealth. A request
6 for proposal shall require potential private contractors to
7 submit a proposal for a period of time and with monetary
8 limitations as determined by the department. Upon the enactment
9 of an appropriation from the State Lottery Fund, the Department
10 of Revenue shall be authorized to transmit the appropriated
11 amount to the State Treasurer to be deposited in the
12 Pharmaceutical Assistance Contract for the Elderly Fund. Funds
13 not expended in the fiscal year in which they were appropriated
14 shall not lapse and shall be available for use in the next
15 fiscal year.
16 Section 309. Program generally.
17 (a) Parameters of program.--The program shall include the
18 following:
19 (1) Participating pharmacies shall be paid within 21
20 days of the contracting firm receiving the appropriate
21 substantiation of the transaction. Pharmacies shall be
22 entitled to interest for payment not made within the 21-day
23 period at a rate approved by the board.
24 (2) Collection of the copayment by pharmacies shall be
25 mandatory.
26 (3) Senior citizens participating in the program are not
27 required to maintain records of each transaction.
28 (4) A system of rebates or reimbursements to eligible
29 claimants for pharmaceutical expenses shall be prohibited.
30 (5) There shall be the following copayments:
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1 (i) For generic drugs - $5.
2 (ii) For preferred drug list drugs - $10.
3 (iii) For drugs which are not on the preferred drug
4 list - $15.
5 (6) Payments as follows:
6 (i) Except as provided in subparagraph (ii), to
7 pharmacies on behalf of eligible claimants for costs of
8 the prescription drug in excess of the copayment as
9 provided in subsections (b) and (c), plus a dispensing
10 fee of $3.50 or the dispensing fee established by the
11 department by regulation, whichever is greater.
12 (ii) For A-rated generic therapeutically equivalent
13 drugs, to pharmacies on behalf of eligible claimants for
14 the upper limits established under 42 CFR § 447.332
15 (relating to upper limits for multiple source drugs),
16 plus a dispensing fee of $4 or the dispensing fee
17 established by the department by regulations, whichever
18 is greater.
19 (7) In no case shall the Commonwealth or any person
20 enrolled in the program be charged more than the price of the
21 drug at the particular pharmacy on the date of the sale.
22 (b) Multiple-source drugs.--Except for brand name drugs that
23 are certified in accordance with subsection (d), the department
24 payment for multiple-source drugs must not exceed the amount
25 that would result from the application of the specific limits
26 established in accordance with subsection (e). If a specific
27 limit has not been established under subsection (e), then the
28 rule for "other drugs" set forth in subsection (c) applies.
29 (c) Other drugs.--The department payments for brand name
30 drugs certified in accordance with subsection (d) and drugs
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1 other than multiple-source drugs for which a specific limit has
2 been established under subsection (e) must not exceed in the
3 aggregate payment levels that the department has determined by
4 applying the lower of the:
5 (1) Estimated acquisition costs plus reasonable
6 dispensing fees established by the department.
7 (2) Providers' usual and customary charges to the
8 general public.
9 (d) Certification of brand-name drugs.--
10 (1) The upper limit for payments for multiple-source
11 drugs for which a specific limit has been established under
12 subsection (e) does not apply if a physician certifies in his
13 or her own handwriting that a specific brand is medically
14 necessary for a particular recipient.
15 (2) The department must decide what certification form
16 and procedure are used.
17 (3) A checkoff box on a form is not acceptable but a
18 notation like "brand necessary" is allowable.
19 (4) The department may allow providers to keep the
20 certification forms if the forms will be available for
21 inspection by the department.
22 (e) Establishment and issuance of a listing of multiple-
23 source drugs.--
24 (1) The department will use the CMS listings that
25 identify and set upper limits for multiple-source drugs that
26 meet the following requirements:
27 (i) All of the formulations of the drug approved by
28 the Food and Drug Administration (FDA) have been
29 evaluated as therapeutically equivalent in the most
30 current edition of their publication, Approved Drug
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1 Products with Therapeutic Equivalence Evaluations,
2 including supplements or in successor publications.
3 (ii) At least three suppliers list the drug, which
4 has been classified by the FDA as category "A" in its
5 publication, Approved Drug Products with Therapeutic
6 Equivalence Evaluations, including supplements or in
7 successor publications, based on all listings contained
8 in current editions, or updates, of published compendia
9 of cost information for drugs available for sale
10 nationally.
11 (2) The department publishes the list of multiple-source
12 drugs for which upper limits have been established and any
13 revisions to the list in Medicaid program instructions.
14 (3) The department will identify the sources used in
15 compiling these lists.
16 Section 310. Generic drugs.
17 (a) General.--Notwithstanding any other statute or
18 regulation, if an A-rated generic therapeutically equivalent
19 drug is available for dispensing to a claimant, the provider
20 shall dispense the A-rated generic therapeutically equivalent
21 drug to the claimant. The department shall not reimburse
22 providers for brand name products except in the following
23 circumstances:
24 (1) There is no A-rated generic therapeutically
25 equivalent drug available on the market. This paragraph does
26 not apply to the lack of availability of an A-rated generic
27 therapeutically equivalent drug in the providing pharmacy
28 unless it can be shown to the department that the provider
29 made reasonable attempts to obtain the A-rated generic
30 therapeutically equivalent drug or that there was an
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1 unforeseeable demand and depletion of the supply of the A-
2 rated generic therapeutically equivalent drug. In either
3 case, the department shall reimburse the provider for 90% of
4 the average wholesale cost plus a dispensing fee based on the
5 least expensive A-rated generic therapeutically equivalent
6 drug for the brand drug dispensed.
7 (2) An A-rated generic therapeutically equivalent drug
8 is deemed by the department, in consultation with a
9 utilization review committee, to have too narrow a
10 therapeutic index for safe and effective dispensing in the
11 community setting. The department shall notify providing
12 pharmacies of A-rated generic therapeutically equivalent
13 drugs that are identified pursuant to this paragraph on a
14 regular basis.
15 (3) The Department of Health has determined that a drug
16 shall not be recognized as an A-rated generic therapeutically
17 equivalent drug for purpose of substitution under section
18 5(b) of the act of November 24, 1976 (P.L.1163, No.259),
19 referred to as the Generic Equivalent Drug Law.
20 (4) At the time of dispensing, the provider has a
21 prescription on which the brand name drug dispensed is billed
22 to the program by the provider at a usual and customary
23 charge which is equal to or less than the least expensive
24 usual and customary charge of any A-rated generic
25 therapeutically equivalent drug reasonably available on the
26 market to the provider.
27 (b) Copayment.--If a claimant chooses not to accept the A-
28 rated generic therapeutically equivalent drug required by
29 subsection (a), the claimant shall be liable for the copayment
30 and 70% of the average wholesale cost of the brand name drug.
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1 (c) Substitution or construction.--The dispensing of an A-
2 rated generic therapeutically equivalent drug in accordance with
3 this subchapter shall not be deemed incorrect substitution under
4 section 6(a) of the Generic Equivalent Drug Law.
5 (d) Medical exception.--A medical exception process shall be
6 established by the department, which shall be published as a
7 notice in the Pennsylvania Bulletin and distributed to providers
8 and recipients in the program.
9 Section 311. Supply.
10 (a) Requirement.--Except as set forth in subsection (b),
11 prescription benefits for any single prescription shall be
12 limited to a 30-day supply of the prescription drug or 100
13 units, whichever is less for acute conditions.
14 (b) Exceptions.--
15 (1) In the case of diagnosis for acute conditions,
16 prescription benefits for any single prescription shall be
17 limited to a 15-day supply.
18 (2) Subsection (a) shall not apply to topical ointments
19 or gels which are not available in containers which meet the
20 size and supply restrictions set forth in subsection (a).
21 (c) Subsection (a) does not apply to contracts under section
22 312(c).
23 Section 312. Mail service program.
24 (a) General rule.--The department shall require the use of a
25 mail service program for maintenance drugs for eligible
26 claimants. Only mail order pharmacy services provided by
27 pharmacies which are licensed by the Commonwealth and which have
28 their principal place of business within this Commonwealth may
29 participate as providers under the program.
30 (b) Minimum standards of practice.--The department shall
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1 develop and promulgate specific regulations governing the
2 practice of mail order pharmacy and other enrolled providers to
3 include the following minimum standards of practice to ensure
4 the health, safety and welfare of program participants:
5 (1) The appropriate method by which pharmacies verify
6 the identity of the eligible claimant and the authenticity of
7 prescriptions received.
8 (2) The appropriate method by which pharmacies mail or
9 deliver prescription drugs ensuring, to the maximum extent
10 possible, that the intended eligible claimant is the actual
11 ultimate recipient of any prescription dispensed.
12 (3) The appropriate method by which pharmacies
13 communicate with eligible claimants in emergency situations.
14 (c) Ninety-day supply.--The department shall negotiate mail
15 order contracts to provide a 90-day supply of drugs to eligible
16 claimants at a single copayment rate equal to a 30-day supply
17 for each order.
18 (d) Requirement.--An eligible claimant shall use the mail
19 service program if the eligible claimant:
20 (1) utilizes a maintenance drug;
21 (2) has filled a prescription; and
22 (3) has refilled the prescription under paragraph (2) at
23 least once.
24 (e) Rebates.--A mail order contract must include a rebate
25 from the prescription drug manufacturer. The rebate must be at
26 least as much as follows:
27 (1) For a brand-name drug, the sum of subparagraphs (i)
28 and (ii):
29 (i) A dispensing fee of at least $6.
30 (ii) The difference between:
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1 (A) the average wholesale price; and
2 (B) 20% of that price.
3 (2) For a generic drug, the sum of subparagraphs (i) and
4 (ii):
5 (i) A dispensing fee of at least $6.
6 (ii) The difference between:
7 (A) the average wholesale price; and
8 (B) 50% of that price.
9 (f) Negotiated payments.--The department shall not
10 discriminate against a pharmacy that agrees to accept negotiated
11 payment levels with the same terms and conditions and to adhere
12 to quality standards established by the PACE and PACENET
13 programs.
14 Section 313. Indication of price.
15 The retail price of the prescription shall be indicated on
16 the label of the prescription container or furnished by separate
17 receipt.
18 Section 314. Reimbursement.
19 For-profit third-party insurers and not-for-profit
20 prescription plans shall be responsible for any payments made to
21 a providing pharmacy on behalf of a claimant covered by such a
22 third party.
23 Section 315. Nonliability.
24 (a) General.--Any person rendering service as a member of a
25 utilization review committee for this program shall not be
26 liable for any civil damages as a result of any acts or
27 omissions in rendering the service as a member of any such
28 committee except any acts or omissions intentionally designed to
29 harm or any grossly negligent acts or omissions which result in
30 harm to the person receiving such service.
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1 (b) Department personnel.--Any officer or employee of the
2 department rendering service as a member of a utilization review
3 committee for this program shall not be liable for any civil
4 damages as a result of any acts or omissions in rendering the
5 service as a member of any such committee or as a result of any
6 decision or action in connection with the program except any
7 acts or omissions intentionally designed to harm or any grossly
8 negligent acts or omissions which result in harm to the person
9 receiving such service.
10 Section 316. Income verification.
11 (a) General.--The department shall annually verify the
12 income of eligible claimants by requiring income documentation
13 from the claimants. An application for benefits under this
14 subchapter shall constitute a waiver to the department of all
15 relevant confidentiality requirements relating to the claimant's
16 Pennsylvania State income tax information in the possession of
17 the Department of Revenue. The Department of Revenue shall
18 provide the department with the necessary income information
19 shown on the claimant's Pennsylvania State income tax return
20 solely for income verification purposes.
21 (b) Unlawful act.--It shall be unlawful for any officer,
22 agent or employee of the department to divulge or make known in
23 any manner whatsoever any information gained through access to
24 the Department of Revenue information except for official income
25 verification purposes under this subchapter.
26 (c) Penalty.--A person who violates this chapter commits a
27 misdemeanor and shall, upon conviction, be sentenced to pay a
28 fine of not more than $1,000 or to imprisonment for not more
29 than one year, or both, together with the cost of prosecution,
30 and, if the offender is an officer or employee of the
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1 Commonwealth, he shall be dismissed from office or discharged
2 from employment.
3 (d) Coordination of effort.--To the extent possible, the
4 department and the Department of Public Welfare shall coordinate
5 efforts to facilitate the application and enrollment of eligible
6 older people in the Medicaid Healthy Horizons Program by
7 processing these applications at senior citizens centers and
8 other appropriate facilities providing services to the elderly.
9 Section 317. Contract.
10 The department is authorized to enter into a contract
11 providing for prescription drugs to eligible persons pursuant to
12 this subchapter. The department shall select a proposal that
13 includes, but is not limited to, the criteria set forth in this
14 subchapter.
15 Section 318. The Pharmaceutical Assistance Contract for the
16 Elderly Needs Enhancement Tier.
17 (a) Establishment.--There is hereby established within the
18 department a program to be known as the Pharmaceutical
19 Assistance Contract for the Elderly Needs Enhancement Tier
20 (PACENET).
21 (b) Eligibility.--A claimant with an annual income of not
22 less than $17,000 and not more than $20,000 in the case of a
23 single person and of not less than $20,001 and not more than
24 $23,200 in the case of the combined income of persons married to
25 each other shall be eligible for enhanced pharmaceutical
26 assistance under this section. A person may, in reporting income
27 to the department, round the amount of each source of income and
28 the income total to the nearest whole dollar, whereby any amount
29 which is less than 50¢ is eliminated.
30 (c) Requirements.--Upon enrollment in PACENET, eligible
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1 claimants in the income ranges set forth in subsection (b) shall
2 be required to meet a monthly deductible in unreimbursed
3 prescription drug expenses of $50 per person per month. To
4 qualify for the deductible set forth in this subsection the
5 prescription drug must be purchased for the use of the eligible
6 claimant from a provider as defined in this subchapter. The
7 department, after consultation with the board, may approve an
8 adjustment in the deductible on an annual basis.
9 (d) Copayments.--The following are the copayments:
10 (1) For generic drugs - $6.
11 (2) For preferred drug list drugs - $12.
12 (3) For drugs which are not on the preferred drug list -
13 $18.
14 Section 319. Board.
15 (a) General.--The Pharmaceutical Assistance Review Board is
16 continued to ensure that the program is providing and continues
17 to provide the assistance intended in a fiscally responsible
18 manner without excessively hampering the pharmaceutical
19 industry.
20 (b) Membership.--The board shall be comprised of the
21 following eight persons:
22 (1) The Secretary of Aging, who shall serve as its
23 chairman.
24 (2) The Secretary of Revenue.
25 (3) The Secretary of Health.
26 (4) Five public members, one appointed by the President
27 pro tempore of the Senate, one appointed by the Minority
28 Leader of the Senate, one appointed by the Speaker of the
29 House of Representatives, one appointed by the Minority
30 Leader of the House of Representatives and one appointed by
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1 the Governor. Those appointed by the legislative officers
2 shall include two senior citizens who have not been a part of
3 the pharmaceutical industry to serve as consumer advocates
4 and two representatives of the pharmaceutical industry, at
5 least one of whom is a practicing Pennsylvania pharmacist.
6 The individual appointed by the Governor must be a physician.
7 A public member who misses two consecutive meetings without
8 good cause acceptable to the chairman shall be replaced by
9 the appointing authority.
10 (c) Annual review.--Using the annual report submitted by the
11 department pursuant to section 2102 of the act of August 26,
12 1971 (P.L.351, No.91), known as the State Lottery Law, and other
13 appropriate data sources, the board shall conduct an annual
14 review. The board shall develop recommendations concerning any
15 changes in the level of copayment, deductible or in the level of
16 fees paid to participating pharmacists. The board shall review
17 the department's therapeutic drug utilization review program on
18 an ongoing basis. The board may also recommend other changes in
19 the structure of the program and direct the department to enter
20 into discussions with the private contractor concerning
21 amendments to the contract, or the department may enter into
22 such discussion if it deems necessary. The copayment or
23 deductible schedule shall only be adjusted on an annual basis.
24 (d) Meetings.--The board shall meet at least two times per
25 year.
26 Section 320. Penalties.
27 (a) General.--It shall be unlawful for any person to:
28 (1) Submit a false or fraudulent claim or application
29 under this subchapter, including, but not limited to:
30 (i) aiding or abetting another in the submission of
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1 a false or fraudulent claim or application;
2 (ii) receiving benefits or reimbursement under a
3 Federal, state or a private program for prescription
4 assistance and claiming or receiving duplicative benefits
5 hereunder;
6 (iii) soliciting, receiving, offering or paying any
7 kickback, bribe or rebate, in cash or in kind, from or to
8 any person in connection with the furnishing of services
9 under this subchapter;
10 (iv) engaging in a pattern of submitting claims that
11 repeatedly uses incorrect National Drug Code numbers for
12 the purpose of obtaining wrongful enhanced reimbursement;
13 or
14 (v) otherwise violating any provision of this
15 subchapter.
16 (2) Charge a copay if the amount of the copay exceeds
17 the actual cost of the drug purchased.
18 (b) Civil penalty.--In addition to any appropriate criminal
19 penalty for prohibited acts under this subchapter whether or not
20 that act constitutes a crime under 18 Pa.C.S. (relating to
21 crimes and offenses), a provider who violates this section may
22 be liable for a civil penalty, which shall be collected by the
23 department, in an amount not less than $500 and not more than
24 $10,000 for each violation of this chapter. Each violation
25 constitutes a separate offense. If the department collects three
26 or more civil penalties against the same provider, the provider
27 shall be ineligible to participate in either PACE or PACENET for
28 a period of one year. If more than three civil penalties are
29 collected from any provider, the department may determine that
30 the provider is permanently ineligible to participate in PACE or
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1 PACENET.
2 (c) Suspension.--The license of any provider who has been
3 found guilty under this subchapter shall be suspended for a
4 period of one year. The license of any provider who has
5 committed three or more violations of this subchapter may be
6 suspended for a period of one year.
7 (d) Reparation.--Any provider, recipient or other person who
8 is found guilty of a crime for violating this subchapter shall
9 repay three times the value of the material gain received. In
10 addition to the civil penalty authorized pursuant to subsection
11 (b), the department may require the provider, recipient or other
12 person to repay up to three times the value of any material gain
13 to PACE or PACENET.
14 Section 321. Prescription Drug Education Program.
15 The department, in cooperation with the Department of Health,
16 shall develop and implement a Statewide prescription drug
17 education program designed to inform older adults of the dangers
18 of prescription drug abuse and misuse. The prescription dug
19 education program shall include, but not be limited to,
20 information concerning the following:
21 (1) The hazards of prescription drug overdose.
22 (2) The potential dangers of mixing prescription drugs.
23 (3) The danger of retaining unused prescription drugs
24 after the need to take them no longer exists.
25 (4) The necessity to carefully question physicians and
26 pharmacists concerning the effects of taking prescription
27 drugs, including the differences between brand-name drugs and
28 generically equivalent drugs.
29 (5) The advisability of maintaining a prescription drug
30 profile or other record of prescription drug dosage and
20030H0888B1044 - 21 -
1 frequency of dosage.
2 (6) The desirability of advising family members of the
3 types and proper dosage of prescription drugs which are being
4 taken.
5 (7) The dangers of taking prescription drugs in excess
6 of prescribed dosages.
7 (8) The need to obtain complete, detailed directions
8 from the physician or pharmacist concerning the time period a
9 prescription drug should be taken.
10 Section 322. Outreach program.
11 The department, in consultation with appropriate Commonwealth
12 agencies, shall coordinate the development of an outreach plan
13 to inform potential contractors, providers and enrollees
14 regarding eligibility and available benefits of the PACE and
15 PACENET programs. The plan shall include provisions for reaching
16 special populations, including nonwhite and non-English-speaking
17 people; for reaching different geographic areas, including rural
18 and inner-city areas; and for assuring that special efforts are
19 coordinated within the overall outreach activities throughout
20 this Commonwealth.
21 Section 323. Accountability.
22 (a) Audits.--The PACE and PACENET programs shall be subject
23 to an audit by an independent entity at least once each fiscal
24 year. This subsection shall include fiscal audits, provider
25 claims audits, benefits manager administration audits and
26 manufacturer's rebate audits.
27 (b) Conduct of audit.--The audit shall be conducted in
28 accordance with generally accepted auditing standards as
29 prescribed by the American Institute of Certified Public
30 Accountants, the Governmental Accounting Standards Board, the
20030H0888B1044 - 22 -
1 United States General Accounting Office or other professionally
2 recognized entities that prescribe auditing standards.
3 (c) Access.--The auditor shall be entitled to have access to
4 all of the books, accounts, confidential or nonconfidential
5 reports, vouchers or other records of information in the
6 department and its contractors including access to all
7 electronic data. The auditor shall have access to copyrighted or
8 restricted information obtained by the department and its
9 contractors under subscription agreements and utilized in the
10 preparation of economic estimates only for audit purposes.
11 (d) Purpose and report.--The audit shall determine the
12 following:
13 (1) Whether the records, books and accounts of the
14 department and its contractors accurately reflect the
15 financial and fiscal operations.
16 (2) Whether effective accounting control over revenues,
17 obligations, expenditures, assets and liabilities is
18 maintained.
19 (3) Whether the department and its contractors have
20 obligated, expended, received and used State funds in
21 accordance with the purpose for which those funds have been
22 appropriated.
23 (4) Whether the records, books and accounts of the
24 department and its contractors fairly and accurately reflect
25 the financial and fiscal operations relating to the
26 obligation receipt, expenditure and use of State funds.
27 (5) Whether the department and its contractors are
28 managing and utilizing resources, personnel, property,
29 equipment and space in an economical and efficient manner
30 including causes of inefficiencies or uneconomical practices,
20030H0888B1044 - 23 -
1 inadequacies in management information systems, internal and
2 administrative procedures, organizational structure, use of
3 resources, allocation of personnel, purchasing policies and
4 equipment.
5 (6) Whether financial, program and statistical reports
6 of the department and its contractors contain useful data and
7 are fairly presented.
8 (7) Whether the objectives and intended benefits are
9 being achieved efficiently and effectively.
10 (8) Whether the programs are being performed and
11 administered as authorized and required by law.
12 (9) Whether the benefits manager and pharmacy providers
13 are accurately transmitting and billing PACE and PACENET
14 prescription claims.
15 (e) Report.--The auditor shall submit an annual report of
16 its findings, conclusions and recommendations to the department
17 and its contractors and to the Aging and Youth Committee, the
18 Appropriations Committee and the Public Health and Welfare
19 Committee of the Senate and the Aging and Older Adult Services
20 Committee, the Appropriations Committee and the Health and Human
21 Services Committee of the House of Representatives.
22 (f) Response.--The Department of Aging shall respond to the
23 audit report within 30 days of its release.
24 SUBCHAPTER B
25 PRUDENT PHARMACEUTICAL PURCHASING
26 Section 341. Definitions.
27 The following words and phrases when used in this subchapter
28 shall have the meanings given to them in this section unless the
29 context clearly indicates otherwise:
30 "Covered prescription drug." A legend drug, insulin, an
20030H0888B1044 - 24 -
1 insulin syringe or an insulin needle eligible for payment by the
2 Commonwealth under PACE, PACENET or designated pharmaceutical
3 programs.
4 "Designated pharmaceutical programs." The general assistance
5 program and the Special Pharmaceutical Benefit Program in the
6 Department of Public Welfare and the End Stage Renal Dialysis
7 Program in the Department of Health.
8 "PACE." The program under Subchapter A.
9 "PACENET." The program established under section 318.
10 Section 342. Rebate agreement.
11 PACE, PACENET and designated pharmaceutical programs shall
12 reimburse for any covered prescription drug with a rebate
13 agreement drafted on the same basis as provided in section 1927
14 of Title XIX of the Social Security Act (49 Stat. 620, 42 U.S.C.
15 § 1396 r-8).
16 Section 343. Disposition of funds.
17 (a) PACE and PACENET.--Money received under this subchapter
18 in connection with PACE and PACENET shall be deposited in the
19 Pharmaceutical Assistance Contract for the Elderly Fund.
20 (b) Pharmaceutical programs.--Money received under this
21 subchapter in connection with designated pharmaceutical programs
22 shall be treated as a refund of expenditures to the
23 appropriation which originally provided the funding for the
24 pharmaceutical purchase.
25 SUBCHAPTER C
26 PHARMACY BEST PRACTICES AND COST CONTROL PROGRAM
27 Section 361. Definitions.
28 The following words and phrases when used in this subchapter
29 shall have the meanings given to them in this section unless the
30 context clearly indicates otherwise:
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1 "Committee." The Pharmacy Best Practices and Cost Control
2 Advisory Committee established in section 362.
3 "Department." The Department of Aging of the Commonwealth.
4 "Program." The Pharmacy Best Practices and Cost Control
5 Program established in section 363.
6 "Secretary." The Secretary of Aging of the Commonwealth.
7 § 362. Advisory committee.
8 (a) Establishment.--The Pharmacy Best Practices and Cost
9 Control Advisory Committee is established in the department.
10 (b) Members.--The committee is comprised of the following:
11 (1) The secretary or a designee, who shall serve as
12 chairperson.
13 (2) Four members appointed by the Governor. Members
14 under this paragraph must possess expertise in medicine or
15 pharmacy.
16 (3) One member appointed by the President pro tempore of
17 the Senate and one member appointed by the Minority Leader of
18 the Senate.
19 (4) One member appointed by the Speaker of the House of
20 Representatives and one member appointed by the Minority
21 Leader of the House of Representatives.
22 (c) Terms.--Terms are as follows:
23 (1) The secretary shall serve ex officio.
24 (2) A member under subsection (b)(2) shall serve a term
25 of six years.
26 (3) A member under subsection (b)(3) shall serve a term
27 of four years but may be removed at the pleasure of the
28 appointing authority.
29 (4) A member under subsection (b)(4) shall serve a term
30 of two years but may be removed at the pleasure of the
20030H0888B1044 - 26 -
1 appointing authority.
2 (5) An appointment to fill a vacancy shall be for the
3 period of the unexpired term or until a successor is
4 appointed and qualified.
5 (d) Quorum.--A majority of the members of the committee
6 constitutes a quorum.
7 (e) Compensation.--Members shall receive no payment for
8 their services. Members who are not employees of State
9 government shall be reimbursed for necessary and reasonable
10 expenses incurred in the course of their official duties.
11 Section 363. Program.
12 (a) Establishment.--The secretary shall establish a Pharmacy
13 Best Practices and Cost Control Program for PACE and PACENET
14 enrollees designed to reduce the cost of providing prescription
15 drugs, while maintaining high quality in prescription drug
16 therapies. The program shall be implemented consistent with
17 section 1927 of the Social Security Act (49 Stat. 620, 42 U.S.C.
18 § 1396r-8). The program shall include all of the following:
19 (1) A preferred list of covered prescription drugs which
20 identifies preferred choices within selected therapeutic
21 classes for particular diseases and conditions, including
22 generic alternatives. Therapeutic classes and drugs to be
23 preferred in the classes shall be selected by the department
24 upon recommendations by the committee.
25 (2) Utilization review procedures, including a prior
26 authorization review process which meets the requirements of
27 section 1927(d)(5) of the Social Security Act (42 U.S.C. §
28 1396r-8(d)(5)).
29 (3) A supplemental rebate program or any other strategy
30 designed to negotiate with pharmaceutical manufacturers to
20030H0888B1044 - 27 -
1 lower the cost of prescription drugs for the department's
2 Medicaid program.
3 (4) Education programs, including a counterdetailing
4 program, designed to provide information and education on the
5 therapeutic and cost-effective utilization of prescription
6 drugs to physicians, pharmacists and other health care
7 professionals authorized to prescribe and dispense
8 prescription drugs.
9 (5) Any other cost containment activity adopted by the
10 department which is designed to reduce the cost of providing
11 prescription drugs while maintaining high quality in
12 prescription drug therapies.
13 (b) Pooling.--The secretary shall evaluate the benefits of
14 participating, but is not required to participate, in joint
15 prescription drug purchasing agreements or pooling arrangements
16 with other states. Such actions shall include:
17 (1) The execution of any lawful joint purchasing or
18 pooling agreements with other participating states which the
19 secretary determines will lower the Medicaid cost of
20 prescription drugs while maintaining high quality in
21 prescription drug therapies.
22 (2) Renegotiation and amendment of existing contracts to
23 which the department is a party if renegotiation and
24 amendment will be of economic benefit to the department.
25 (c) Reports.--The secretary shall report quarterly to the
26 committee on the department's progress in securing participation
27 in joint purchasing or pooling agreements.
28 (d) Authorized coverage.--The program shall authorize
29 pharmacy benefit coverage when a patient's health care provider
30 prescribes a prescription drug not on the preferred drug list or
20030H0888B1044 - 28 -
1 a prescription drug which is not the list's preferred choice
2 under the same terms as coverage for preferred choice drugs if
3 any of the following apply:
4 (1) The preferred choice has not been effective or, with
5 reasonable certainty, is not expected to be effective in
6 treating the patient's condition.
7 (2) The preferred choice causes or is reasonably
8 expected to cause adverse or harmful reactions in the
9 patient.
10 (3) Other clinical criteria recommended by the committee
11 and approved by the department is complied with.
12 (4) If the prescriber does not wish substitution to take
13 place, the prescriber shall write "brand necessary" or "no
14 substitution" in the prescriber's own handwriting on the
15 prescription blank, together with a written statement that
16 the generic or therapeutic equivalent has not been effective,
17 or with reasonable certainty is not expected to be effective,
18 in treating the patient's medical condition or causes or is
19 reasonably expected to cause adverse or harmful reactions in
20 the patient. In the case of an unwritten prescription, there
21 shall be no substitution if the prescriber expressly
22 indicates to the pharmacist that the brand name drug is
23 necessary and substitution is not allowed because the generic
24 or therapeutic equivalent has not been effective, or with
25 reasonable certainty is not expected to be effective, in
26 treating the patient's medical condition or causes or is
27 reasonably expected to cause adverse or harmful reactions in
28 the patient.
29 (e) Exclusions.--The department, with recommendations from
30 the committee, shall determine diseases and therapeutic classes
20030H0888B1044 - 29 -
1 relating to treatment for diseases excluded from the program as
2 to Medicaid enrollees already taking specified drugs at the time
3 the program is implemented.
4 (f) Response.--The program's prior authorization process
5 shall ensure that there will be a response to a request for
6 prior authorization by telephone or other telecommunication
7 device within 24 hours after receipt of the request for prior
8 authorization and that a 72-hour supply of the drug prescribed
9 will be provided in an emergency or when the program does not
10 provide a response within 24 hours. The prior authorization
11 process shall be designed to minimize administrative burdens on
12 prescribers, pharmacists and consumers.
13 (g) Procedure.--The program shall establish procedures for
14 the timely review of prescription drugs newly approved by the
15 Food and Drug Administration, including procedures for the
16 review of newly approved prescription drugs in emergency
17 circumstances.
18 (h) Reports.--The department shall submit annual reports on
19 the programs under subsection (a) and (b) to the Aging and Youth
20 Committee, the Appropriations Committee and the Public Health
21 and Welfare Committee of the Senate and the Aging and Older
22 Adult Services Committee, the Appropriations Committee and the
23 Health and Human Services Committee of the House of
24 Representatives. The reports shall include classes of drugs,
25 exceptions, cost effectiveness, movement of market share and
26 increased utilization of generic drugs.
27 CHAPTER 51
28 MISCELLANEOUS PROVISIONS
29 Section 5101. Federal programs.
30 If the Federal Government enacts programs similar to PACE or
20030H0888B1044 - 30 -
1 PACENET, the State programs shall be construed to only
2 supplement the Federal programs and all persons qualified for
3 coverage under the Federal program shall utilize that Federal
4 program before utilizing any State program.
5 Section 5102. Repeals.
6 (a) Specific.--Chapters 5 and 7 of the act of August 26,
7 1971 (P.L.351, No.91), known as the State Lottery Law, are
8 repealed.
9 (b) General.--All other acts and parts of acts are repealed
10 insofar as they are inconsistent with this act.
11 Section 5103. Effective date.
12 This act shall take effect immediately.
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