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        PRIOR PRINTER'S NOS. 1044, 1816, 1836         PRINTER'S NO. 1889

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 888 Session of 2003


        INTRODUCED BY VANCE, EACHUS, KENNEY, WALKO, E. Z. TAYLOR,
           GRUCELA, ADOLPH, BARD, BALDWIN, BARRAR, BASTIAN, BROWNE,
           BUTKOVITZ, BUXTON, CAPPELLI, CASORIO, CORNELL, CORRIGAN,
           COSTA, DAILEY, DALLY, J. EVANS, FEESE, FLICK, FREEMAN, GABIG,
           GERGELY, GILLESPIE, GINGRICH, HARHAI, HARPER, HASAY,
           HENNESSEY, HERMAN, HERSHEY, HORSEY, JAMES, KELLER, KIRKLAND,
           LAUGHLIN, LEH, LEWIS, MACKERETH, MAHER, MARSICO, McCALL,
           McGILL, McNAUGHTON, MELIO, MICOZZIE, R. MILLER, S. MILLER,
           MUNDY, NAILOR, NICKOL, O'NEILL, PALLONE, PETRARCA, PETRI,
           PICKETT, PISTELLA, RAYMOND, READSHAW, ROBERTS, ROSS, RUBLEY,
           SAINATO, SAYLOR, SCAVELLO, SCHRODER, SEMMEL, SHANER, SOLOBAY,
           STEIL, R. STEVENSON, T. STEVENSON, J. TAYLOR, THOMAS, TIGUE,
           TRAVAGLIO, TURZAI, WANSACZ, WATSON, WEBER, WILT, WRIGHT,
           YOUNGBLOOD, YUDICHAK, ZUG AND FABRIZIO, MARCH 13, 2003

        AS REPORTED FROM COMMITTEE ON HEALTH AND HUMAN SERVICES, HOUSE
           OF REPRESENTATIVES, AS AMENDED, JUNE 2, 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, for      <--
     4     pharmaceutical practices and cost control program and for the
     5     Pharmaceutical Assistance Clearinghouse; imposing additional
     6     powers and duties on the Department of Aging, the Department
     7     of Health, the Department of Public Welfare and the Secretary
     8     of Administration; and making repeals.

     9                         TABLE OF CONTENTS
    10  Chapter 1.  Preliminary Provisions
    11  Section 101.  Short title.
    12  Chapter 3.  Pharmaceutical Matters
    13     Subchapter A.  Pharmaceutical Assistance for the Elderly
    14  Section 301.  Legislative findings.


     1  Section 302.  Definitions.
     2  Section 303.  Determination of eligibility.
     3  Section 304.  Physician and pharmacy participation.
     4  Section 305.  Drug utilization review system.
     5  Section 306.  Reduced assistance.
     6  Section 307.  Rebates for expenses prohibited.
     7  Section 308.  Request for proposal.
     8  Section 309.  Program generally.                                  <--
     9  Section 310.  Generic drugs.
    10  Section 311.  Supply.
    11  Section 312.  Mail order system.
    12  Section 313.  Indication of price.
    13  Section 314.  Reimbursement.
    14  Section 315.  Nonliability.
    15  Section 316.  Income verification.
    16  Section 317.  Contract.
    17  Section 318.  The Pharmaceutical Assistance Contract for the
    18                 Elderly Needs Enhancement Tier.
    19  Section 319.  Board.
    20  Section 320.  Penalties.
    21  Section 321.  Prescription Drug Education Program.
    22  Section 322.  Outreach program.
    23  Section 323.  Accountability.
    24     Subchapter B.  Prudent Pharmaceutical Purchasing
    25  Section 341.  Definitions.
    26  Section 342.  Rebate agreement.
    27  Section 343.  Disposition of funds.
    28     Subchapter C.  Pharmacy Best Practices and Cost Control
    29                 Program
    30  Section 361.  Definitions.
    20030H0888B1889                  - 2 -     

     1  Section 362.  Committee.
     2  Section 363.  Program.
     3     Subchapter D.  Pharmaceutical Assistance Clearinghouse
     4  Section 371.  Definitions.
     5  Section 372.  Pharmaceutical Assistance Clearinghouse.
     6  Section 373.  Toll-free telephone number.
     7  Section 374.  Assistance available.
     8  Section 375.  Reporting.
     9  SECTION 309.  DRUG UTILIZATION REVIEW AND THERAPEUTIC             <--
    10                 INTERCHANGE.
    11  SECTION 310.  PROGRAM GENERALLY.
    12  SECTION 311.  GENERIC DRUGS.
    13  SECTION 312.  SUPPLY.
    14  SECTION 313.  MAIL SERVICE PROGRAM.
    15  SECTION 314.  INDICATION OF PRICE.
    16  SECTION 315.  REIMBURSEMENT.
    17  SECTION 316.  NONLIABILITY.
    18  SECTION 317.  INCOME VERIFICATION.
    19  SECTION 318.  CONTRACT.
    20  SECTION 319.  THE PHARMACEUTICAL ASSISTANCE CONTRACT FOR THE
    21                 ELDERLY NEEDS ENHANCEMENT TIER.
    22  SECTION 320.  BOARD.
    23  SECTION 321.  PENALTIES.
    24  SECTION 322.  PRESCRIPTION DRUG EDUCATION PROGRAM.
    25  SECTION 323.  OUTREACH PROGRAM.
    26     SUBCHAPTER B.  PRUDENT PHARMACEUTICAL PURCHASING
    27  SECTION 341.  DEFINITIONS.
    28  SECTION 342.  REBATE AGREEMENT.
    29  SECTION 343.  DISPOSITION OF FUNDS.
    30     SUBCHAPTER C.  PHARMACEUTICAL ASSISTANCE CLEARINGHOUSE
    20030H0888B1889                  - 3 -     

     1  SECTION 361.  DEFINITIONS.
     2  SECTION 362.  PHARMACEUTICAL ASSISTANCE CLEARINGHOUSE.
     3  SECTION 363.  TOLL-FREE TELEPHONE NUMBER.
     4  SECTION 364.  ASSISTANCE AVAILABLE.
     5  SECTION 365.  REPORTING.
     6  Chapter 51.  Miscellaneous Provisions
     7  Section 5101.  Federal programs.
     8  Section 5102.  Repeals.
     9  Section 5103.  Effective date.
    10     The General Assembly of the Commonwealth of Pennsylvania
    11  hereby enacts as follows:
    12                             CHAPTER 1
    13                       PRELIMINARY PROVISIONS
    14  Section 101.  Short title.
    15     This act shall be known and may be cited as the
    16  Pharmaceutical Reform Act.
    17                             CHAPTER 3
    18                       PHARMACEUTICAL MATTERS
    19                            SUBCHAPTER A
    20             PHARMACEUTICAL ASSISTANCE FOR THE ELDERLY
    21  Section 301.  Legislative findings.
    22     Finding that an increasing number of this Commonwealth's
    23  elderly citizens who are living on fixed incomes are
    24  experiencing difficulties in meeting the costs of life-
    25  sustaining prescription drugs, the General Assembly, in its
    26  responsibilities to provide for the health, welfare and safety
    27  of the residents of this Commonwealth, hereby continues a
    28  limited State pharmaceutical assistance program for the elderly.
    29  Section 302.  Definitions.
    30     The following words and phrases when used in this subchapter
    20030H0888B1889                  - 4 -     

     1  shall have the meanings given to them in this section unless the
     2  context clearly indicates otherwise:
     3     "A-rated generic therapeutically equivalent drug."  A drug
     4  product that the Commissioner of Food and Drugs of the United
     5  States Food and Drug Administration has approved as safe and
     6  effective and has determined to be therapeutically equivalent,
     7  as listed in "The Approved Drug Products with Therapeutic
     8  Equivalence Evaluations" (Food and Drug Administration "Orange
     9  Book"), with a specific "A" code designation only.
    10     "Average wholesale cost."  The cost of a dispensed drug based
    11  upon the price published in a national drug pricing system in
    12  current use by the Department of Aging as the average wholesale
    13  price of a prescription drug in the most common package size.
    14     "Average wholesale price."  Average wholesale cost.
    15     "Board."  The Pharmaceutical Assistance Review Board.
    16     "CMS."  Center for Medicare and Medicaid Services.
    17     "Department."  The Department of Aging of the Commonwealth.
    18     "Eligible claimant."  A resident of this Commonwealth for no
    19  less than 90 days, who is 65 years of age and older, whose
    20  annual income is less than the maximum annual income and who is
    21  not otherwise qualified for public assistance under the act of
    22  June 13, 1967 (P.L.31, No.21), known as the Public Welfare Code.
    23     "FDA."  The United States Food and Drug Administration of the
    24  Public Health Service of the Department of Health and Human
    25  Services.
    26     "Income."  All income from whatever source derived,
    27  including, but not limited to, salaries, wages, bonuses,
    28  commissions, income from self-employment, alimony, support
    29  money, cash public assistance and relief, the gross amount of
    30  any pensions or annuities, including railroad retirement
    20030H0888B1889                  - 5 -     

     1  benefits, all benefits received under the Social Security Act
     2  (49 Stat. 620, 42 U.S.C. § 301 et seq.) except Medicare
     3  benefits, all benefits received under State unemployment
     4  insurance laws and veterans' disability payments, all interest
     5  received from the Federal Government or any state government or
     6  any instrumentality or political subdivision thereof, realized
     7  capital gains, rentals, workmen's compensation and the gross
     8  amount of loss of time insurance benefits, life insurance
     9  benefits and proceeds, except the first $5,000 of the total of
    10  death benefits payments, and gifts of cash or property, other
    11  than transfers by gift between members of a household, in excess
    12  of a total value of $300, but does not include surplus food or
    13  other relief in kind supplied by a government agency or property
    14  tax rebate.
    15     "Mail service program."  A program set forth in section 312    <--
    16  313 to dispense prescription drugs by postal delivery service
    17  designated and administered by the department and any entity
    18  with which it contracts, upon an enrollee's submission of a
    19  prescription and the applicable copayment.
    20     "Maintenance drug."  A prescription drug prescribed to an
    21  individual for a chronic condition the use of which is medically
    22  necessary for a consecutive period of at least 60 days.
    23     "Maximum annual income."  For PACE eligibility, annual income
    24  which shall not exceed $14,000 $14,500 in the case of single      <--
    25  persons nor $17,200 $17,700 in the case of the combined annual    <--
    26  income of persons married to each other. Persons may, in
    27  reporting income to the Department of Aging, round the amount of
    28  each source of income and the income total to the nearest whole
    29  dollar, whereby any amount which is less than 50¢ is eliminated.
    30     "PACE."  The Pharmaceutical Assistance Contract for the
    20030H0888B1889                  - 6 -     

     1  Elderly program provided for in this subchapter.
     2     "PACENET."  The Pharmaceutical Assistance Contract for the
     3  Elderly Needs Enhancement Tier provided for in this subchapter.
     4     "Pharmacy."  A pharmacy licensed by the Commonwealth.
     5     "Prescription drug."  All drugs requiring a prescription in
     6  this Commonwealth, insulin, insulin syringes and insulin
     7  needles. Experimental drugs or drugs prescribed for wrinkle
     8  removal or hair growth are prohibited.
     9     "Private contractor."  A person, partnership or corporate
    10  entity that enters into a contract with the Commonwealth to
    11  provide services under the provisions of this subchapter.
    12     "Program."  The Pharmaceutical Assistance Contract for the
    13  Elderly (PACE) and the Pharmaceutical Assistance Contract for
    14  the Elderly Needs Enhancement Tier (PACENET) as established by
    15  this subchapter, unless otherwise specified.
    16     "Provider."  A pharmacy or dispensing physician enrolled as a
    17  provider in the program.
    18  Section 303.  Determination of eligibility.
    19     The department shall adopt regulations relating to the
    20  determination of eligibility of prospective claimants and
    21  providers, including dispensing physicians, and the
    22  determination and elimination of program abuse. To this end, the
    23  department shall establish a compliance unit staffed
    24  sufficiently to fulfill this responsibility. The department
    25  shall have the power to declare ineligible any claimant or
    26  provider who abuses or misuses the established prescription
    27  plan. The department shall have the power to investigate cases
    28  of suspected provider or recipient fraud.
    29  Section 304.  Physician and pharmacy participation.
    30     Any physician, pharmacist, pharmacy or corporation owned in
    20030H0888B1889                  - 7 -     

     1  whole or in part by a physician or pharmacist enrolled as a
     2  provider in the program or that has prescribed medication for a
     3  claimant in the program who is precluded or excluded for cause
     4  from the Department of Public Welfare's medical assistance
     5  program shall be precluded or excluded from participation in the
     6  program. No physician precluded or excluded from the Department
     7  of Public Welfare's medical assistance program shall have claims
     8  resulting from prescriptions paid for by the program.
     9  Section 305.  Drug utilization review system.
    10     The department shall ensure that a state-of-the-art
    11  therapeutic drug utilization review system is established to
    12  monitor and correct misutilization of drug therapies.
    13  Section 306.  Reduced assistance.
    14     Any eligible claimant whose prescription drug costs are
    15  covered in part by any other plan of assistance or insurance may
    16  be required to receive reduced assistance under the provisions
    17  of this subchapter.
    18  Section 307.  Rebates for expenses prohibited.
    19     A system of rebates or reimbursements to the claimant for
    20  prescription drugs shall be prohibited.
    21  Section 308.  Request for proposal.
    22     (a)  General.--The department shall prepare a request for
    23  proposal for the purpose of providing pharmaceutical assistance
    24  for the elderly within this Commonwealth. Upon the adoption of
    25  the General Fund budget, the Department of Revenue shall be
    26  authorized to transmit the appropriated funds in the State
    27  Lottery Fund to the State Treasurer to be deposited in the
    28  Pharmaceutical Assistance Contract for the Elderly Fund. This
    29  fund shall consist of appropriations and interest and shall be
    30  created by the State Treasurer to fund the operations of the
    20030H0888B1889                  - 8 -     

     1  program by the department and the private contractor. Funds not
     2  expended in the fiscal year in which they were appropriated
     3  shall not lapse and shall be available for use in the next
     4  fiscal year.
     5     (b)  Additional requests.--To provide for the continued
     6  operation of the program, the department shall prepare, as
     7  needed, requests for proposals, in addition to that set forth in
     8  subsection (a), for the purpose of providing pharmaceutical
     9  assistance for the elderly within this Commonwealth. A request
    10  for proposal shall require potential private contractors to
    11  submit a proposal for a period of time and with monetary
    12  limitations as determined by the department. Upon the enactment
    13  of an appropriation from the State Lottery Fund, the Department
    14  of Revenue shall be authorized to transmit the appropriated
    15  amount to the State Treasurer to be deposited in the
    16  Pharmaceutical Assistance Contract for the Elderly Fund. Funds
    17  not expended in the fiscal year in which they were appropriated
    18  shall not lapse and shall be available for use in the next
    19  fiscal year.
    20  SECTION 309.  DRUG UTILIZATION REVIEW AND THERAPEUTIC             <--
    21                 INTERCHANGE.
    22     (A)  DRUG UTILIZATION REVIEW.--THE DEPARTMENT SHALL ENSURE
    23  THAT A STATE-OF-THE-ART THERAPEUTIC DRUG UTILIZATION REVIEW
    24  SYSTEM IS ESTABLISHED TO MONITOR AND CORRECT MISUTILIZATION OF
    25  DRUG THERAPIES.
    26     (B)  THERAPEUTIC INTERCHANGE.--THE DEPARTMENT MAY DEVELOP A
    27  THERAPEUTIC INTERCHANGE PROGRAM BASED ON NATIONAL MEDICAL
    28  STANDARDS THAT ESTABLISH THERAPEUTICALLY EQUIVALENT DRUGS WHICH
    29  PRODUCE IDENTICAL LEVELS OF CLINICAL EFFECTIVENESS AND OUTCOMES.
    30  THE PROGRAM SHALL AUTHORIZE PHARMACY BENEFIT COVERAGE WHEN A
    20030H0888B1889                  - 9 -     

     1  PATIENT'S HEALTH CARE PROVIDER PRESCRIBES A PRESCRIPTION DRUG
     2  NOT IN THE PROGRAM IF ANY OF THE FOLLOWING APPLY:
     3         (1)  THE PROGRAM DRUG:
     4             (I)  HAS NOT BEEN EFFECTIVE IN TREATING THE PATIENT'S
     5         CONDITION; OR
     6             (II)  IS NOT EXPECTED WITH REASONABLE CERTAINTY TO BE
     7         EFFECTIVE IN TREATING THE PATIENT'S CONDITION.
     8         (2)  THE PROGRAM DRUG CAUSES OR IS REASONABLY EXPECTED TO
     9     CAUSE ADVERSE OR HARMFUL REACTIONS IN THE PATIENT.
    10         (3)  OTHER CLINICAL CRITERIA APPROVED BY THE DEPARTMENT
    11     ARE COMPLIED WITH.
    12  Section 309 310.  Program generally.                              <--
    13     (a)  Parameters of program.--The program shall include the
    14  following:
    15         (1)  Participating pharmacies shall be paid within 21
    16     days of the contracting firm receiving the appropriate
    17     substantiation of the transaction. Pharmacies shall be
    18     entitled to interest for payment not made within the 21-day
    19     period at a rate approved by the board.
    20         (2)  Collection of the copayment by pharmacies shall be
    21     mandatory.
    22         (3)  Senior citizens participating in the program are not
    23     required to maintain records of each transaction.
    24         (4)  A system of rebates or reimbursements to eligible
    25     claimants for pharmaceutical expenses shall be prohibited.
    26         (5)  There shall be the following copayments:              <--
    27             (i)  For generic drugs - $5.
    28             (ii)  For preferred drug list drugs - $10.
    29             (iii)  For drugs which are not on the preferred drug
    30         list - $15.
    20030H0888B1889                 - 10 -     

     1         (5)  THE COPAYMENT AMOUNT FOR GENERIC OR MULTI-SOURCE      <--
     2     DRUGS SHALL BE LESS THAN THE COPAYMENT AMOUNT FOR SINGLE-
     3     SOURCE DRUGS.
     4         (6)  Payments as follows:
     5             (i)  Except as provided in subparagraph (ii), to
     6         pharmacies on behalf of eligible claimants for costs of
     7         the prescription drug in excess of the copayment as
     8         provided in subsections (b) and (c), plus a dispensing
     9         fee of $3.50 or the dispensing fee established by the
    10         department by regulation, whichever is greater.
    11             (ii)  For A-rated generic therapeutically equivalent
    12         drugs, to pharmacies on behalf of eligible claimants for
    13         the upper limits established under 42 CFR § 447.332
    14         (relating to upper limits for multiple source drugs),
    15         plus a dispensing fee of $4 or the dispensing fee
    16         established by the department by regulations, whichever
    17         is greater.
    18         (7)  In no case shall the Commonwealth or any person
    19     enrolled in the program be charged more than the price of the
    20     drug at the particular pharmacy on the date of the sale.
    21     (b)  Multiple-source drugs.--Except for brand name drugs that
    22  are certified in accordance with subsection (d), the department
    23  payment for multiple-source drugs must not exceed the amount
    24  that would result from the application of the specific limits
    25  established in accordance with subsection (e). If a specific
    26  limit has not been established under subsection (e), then the
    27  rule for "other drugs" set forth in subsection (c) applies.
    28     (c)  Other drugs.--The department payments for brand name
    29  drugs certified in accordance with subsection (d) and drugs
    30  other than multiple-source drugs for which a specific limit has
    20030H0888B1889                 - 11 -     

     1  been established under subsection (e) must not exceed in the
     2  aggregate payment levels that the department has determined by
     3  applying the lower of the:
     4         (1)  Estimated acquisition costs plus reasonable
     5     dispensing fees established by the department.
     6         (2)  Providers' usual and customary charges to the
     7     general public.
     8     (d)  Certification of brand-name drugs.--
     9         (1)  The upper limit for payments for multiple-source
    10     drugs for which a specific limit has been established under
    11     subsection (e) does not apply if a physician certifies in his
    12     or her own handwriting that a specific brand is medically
    13     necessary for a particular recipient.
    14         (2)  The department must decide what certification form
    15     and procedure are used.
    16         (3)  A checkoff box on a form is not acceptable but a
    17     notation like "brand necessary" is allowable.
    18         (4)  The department may allow providers to keep the
    19     certification forms if the forms will be available for
    20     inspection by the department.
    21     (e)  Establishment and issuance of a listing of multiple-
    22  source drugs.--
    23         (1)  The department will use the CMS listings that
    24     identify and set upper limits for multiple-source drugs that
    25     meet the following requirements:
    26             (i)  All of the formulations of the drug approved by
    27         the Food and Drug Administration (FDA) have been
    28         evaluated as therapeutically equivalent in the most
    29         current edition of their publication, Approved Drug
    30         Products with Therapeutic Equivalence Evaluations,
    20030H0888B1889                 - 12 -     

     1         including supplements or in successor publications.
     2             (ii)  At least three suppliers list the drug, which
     3         has been classified by the FDA as category "A" in its
     4         publication, Approved Drug Products with Therapeutic
     5         Equivalence Evaluations, including supplements or in
     6         successor publications, based on all listings contained
     7         in current editions, or updates, of published compendia
     8         of cost information for drugs available for sale in this
     9         Commonwealth.
    10         (2)  The department publishes the list of multiple-source
    11     drugs for which upper limits have been established and any
    12     revisions to the list in Medicaid program instructions.
    13         (3)  The department will identify the sources used in
    14     compiling these lists.
    15  Section 310 311.  Generic drugs.                                  <--
    16     (a)  General.--Notwithstanding any other statute or
    17  regulation, if an A-rated generic therapeutically equivalent
    18  drug is available for dispensing to a claimant, the provider
    19  shall dispense the A-rated generic therapeutically equivalent
    20  drug to the claimant. The department shall not reimburse
    21  providers for brand name products except in the following
    22  circumstances:
    23         (1)  There is no A-rated generic therapeutically
    24     equivalent drug available on the market. This paragraph does
    25     not apply to the lack of availability of an A-rated generic
    26     therapeutically equivalent drug in the providing pharmacy
    27     unless it can be shown to the department that the provider
    28     made reasonable attempts to obtain the A-rated generic
    29     therapeutically equivalent drug or that there was an
    30     unforeseeable demand and depletion of the supply of the A-
    20030H0888B1889                 - 13 -     

     1     rated generic therapeutically equivalent drug. In either
     2     case, the department shall reimburse the provider for 90% of
     3     the average wholesale cost plus a dispensing fee based on the
     4     least expensive A-rated generic therapeutically equivalent
     5     drug for the brand drug dispensed.
     6         (2)  The Department of Health has determined that a drug
     7     shall not be recognized as an A-rated generic therapeutically
     8     equivalent drug for purpose of substitution under section
     9     5(b) of the act of November 24, 1976 (P.L.1163, No.259),
    10     referred to as the Generic Equivalent Drug Law.
    11         (3)  At the time of dispensing, the provider has a
    12     prescription on which the brand name drug dispensed is billed
    13     to the program by the provider at a usual and customary
    14     charge which is equal to or less than the least expensive
    15     usual and customary charge of any A-rated generic
    16     therapeutically equivalent drug reasonably available on the
    17     market to the provider.
    18     (b)  Copayment.--If a claimant chooses not to accept the A-
    19  rated generic therapeutically equivalent drug required by
    20  subsection (a), the claimant shall be liable for the copayment
    21  and 70% of the average wholesale cost of the brand name drug.
    22     (c)  Substitution or construction.--The dispensing of an A-
    23  rated generic therapeutically equivalent drug in accordance with
    24  this subchapter shall not be deemed incorrect substitution under
    25  section 6(a) of the Generic Equivalent Drug Law.
    26     (d)  Medical exception.--A medical exception process shall be
    27  established by the department, which shall be published as a
    28  notice in the Pennsylvania Bulletin and distributed to providers
    29  and recipients in the program.
    30  Section 311 312.  Supply.                                         <--
    20030H0888B1889                 - 14 -     

     1     (a)  Requirement.--Except as set forth in subsection (b),
     2  prescription benefits for any single prescription shall be
     3  limited to a 30-day supply of the prescription drug or 100
     4  units, whichever is less for acute conditions.
     5     (b)  Exceptions.--
     6         (1)  In the case of diagnosis for acute conditions,
     7     prescription benefits for any single prescription shall be
     8     limited to a 15-day supply.
     9         (2)  Subsection (a) shall not apply to topical ointments
    10     or gels which are not available in containers which meet the
    11     size and supply restrictions set forth in subsection (a).
    12     (c)  Subsection (a) does not apply to contracts under section
    13  312(c) 313(C).                                                    <--
    14  Section 312 313.  Mail service program.                           <--
    15     (a)  General rule.--The department shall encourage the use of
    16  a mail service program for maintenance drugs for eligible
    17  claimants. Only mail order pharmacy services provided by
    18  pharmacies which are licensed by the Commonwealth and which have
    19  their principal place of business within this Commonwealth may
    20  participate as providers under the program.
    21     (b)  Minimum standards of practice.--The department shall
    22  develop and promulgate specific regulations governing the
    23  practice of mail order pharmacy and other enrolled providers to
    24  include the following minimum standards of practice to ensure
    25  the health, safety and welfare of program participants:
    26         (1)  The appropriate method by which pharmacies verify
    27     the identity of the eligible claimant and the authenticity of
    28     prescriptions received.
    29         (2)  The appropriate method by which pharmacies mail or
    30     deliver prescription drugs ensuring, to the maximum extent
    20030H0888B1889                 - 15 -     

     1     possible, that the intended eligible claimant is the actual
     2     ultimate recipient of any prescription dispensed.
     3         (3)  The appropriate method by which pharmacies
     4     communicate with eligible claimants in emergency situations.
     5     (c)  Ninety-day supply.--The department shall negotiate mail
     6  order contracts to provide a 90-day supply of drugs to eligible
     7  claimants at a single copayment rate equal to a 30-day supply
     8  for each order.
     9     (d)  Requirement.--Except as set forth in subsection (e), an   <--
    10     (D)  OPTION.--AN eligible claimant shall MAY use the mail      <--
    11  service program if the eligible claimant:
    12         (1)  utilizes a maintenance drug DRUG DEEMED BY THE        <--
    13     DEPARTMENT TO BE APPROPRIATE FOR MAIL ORDER SERVICE;
    14         (2)  has filled a prescription; and
    15         (3)  has refilled the prescription under paragraph (2) at
    16     least once.
    17     (e)  Exception.--Subsection (d) shall not apply to an          <--
    18  eligible claimant who submits to the department, in a form
    19  acceptable to the department, a written statement asserting the
    20  eligible claimant's right to fill prescriptions at the pharmacy
    21  chosen by the eligible claimant.
    22     (f) (E)  Rebates.--A mail order contract must include a        <--
    23  rebate from the prescription drug manufacturer. The rebate must
    24  be at least as much as follows:
    25         (1)  For a brand-name drug, the sum of subparagraphs (i)
    26     and (ii):
    27             (i)  A dispensing fee of at least $6.
    28             (ii)  The difference between:
    29                 (A)  the average wholesale price; and
    30                 (B)  20% of that price.
    20030H0888B1889                 - 16 -     

     1         (2)  For a generic drug, the sum of subparagraphs (i) and
     2     (ii):
     3             (i)  A dispensing fee of at least $6.
     4             (ii)  The difference between:
     5                 (A)  the average wholesale price; and
     6                 (B)  50% of that price.
     7     (g) (F)  Negotiated payments.--The department shall not        <--
     8  discriminate against a pharmacy that agrees to accept negotiated
     9  payment levels with the same terms and conditions and to adhere
    10  to quality standards established by the PACE and PACENET
    11  programs.
    12  Section 313 314.  Indication of price.                            <--
    13     The retail price of the prescription shall be indicated on
    14  the label of the prescription container or furnished by separate
    15  receipt.
    16  Section 314 315.  Reimbursement.                                  <--
    17     (a)  Indication.--The department shall indicate third-party
    18  coverage for each eligible claimant.
    19     (b)  Result.--For-profit third-party insurers and not-for-
    20  profit prescription plans shall be responsible for any payments
    21  made to a providing pharmacy on behalf of a claimant covered by
    22  such a third party.
    23  Section 315 316.  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.
    20030H0888B1889                 - 17 -     

     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 316 317.  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
    20030H0888B1889                 - 18 -     

     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 317 318.  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 318 319.  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 $14,500 and not more than $20,000 $22,450 in    <--
    23  the case of a single person and of not less than $20,001 $17,770  <--
    24  and not more than $23,200 $30,300 in the case of the combined     <--
    25  income of persons married to each other shall be eligible for
    26  enhanced pharmaceutical assistance under this section. A person
    27  may, in reporting income to the department, round the amount of
    28  each source of income and the income total to the nearest whole
    29  dollar, whereby any amount which is less than 50¢ is eliminated.
    30     (c)  Requirements.--Upon enrollment in PACENET, eligible
    20030H0888B1889                 - 19 -     

     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 $40 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 SHALL approve  <--
     8  an 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     (D)  COPAYMENT.--THE COPAYMENT AMOUNT FOR GENERIC OR MULTI-    <--
    15  SOURCE DRUGS SHALL BE LESS THAN THE COPAYMENT AMOUNT FOR SINGLE-
    16  SOURCE DRUGS.
    17  Section 319 320.  Board.                                          <--
    18     (a)  General.--The Pharmaceutical Assistance Review Board is
    19  continued to ensure that the program is providing and continues
    20  to provide the assistance intended in a fiscally responsible
    21  manner without excessively hampering the pharmacy industry.
    22     (b)  Membership.--The board shall be comprised of the
    23  following eight persons:
    24         (1)  The Secretary of Aging, who shall serve as its
    25     chairman.
    26         (2)  The Secretary of Revenue.
    27         (3)  The Secretary of Health.
    28         (4)  Five public members, one appointed by the President
    29     pro tempore of the Senate, one appointed by the Minority
    30     Leader of the Senate, one appointed by the Speaker of the
    20030H0888B1889                 - 20 -     

     1     House of Representatives, one appointed by the Minority
     2     Leader of the House of Representatives and one appointed by
     3     the Governor. Those appointed by the legislative officers
     4     shall include two senior citizens who have not been a part of
     5     the pharmacy industry to serve as consumer advocates, one
     6     representative of the pharmacy industry and one practicing
     7     Pennsylvania pharmacist. The individual appointed by the
     8     Governor must be a physician. A public member who misses two
     9     consecutive meetings without good cause acceptable to the
    10     chairman shall be replaced by the appointing authority.
    11     (c)  Annual review.--Using the annual report submitted by the
    12  department pursuant to section 2102 of the act of August 26,
    13  1971 (P.L.351, No.91), known as the State Lottery Law, and other
    14  appropriate data sources, the board shall conduct an annual
    15  review. The board shall develop recommendations concerning any
    16  changes in the level of copayment, deductible or in the level of
    17  fees paid to participating pharmacists. The board shall review
    18  the department's therapeutic drug utilization review program on
    19  an ongoing basis. The board may also recommend other changes in
    20  the structure of the program and direct the department to enter
    21  into discussions with the private contractor concerning
    22  amendments to the contract, or the department may enter into
    23  such discussion if it deems necessary. The copayment or
    24  deductible schedule shall only be adjusted on an annual basis.
    25     (d)  Meetings.--The board shall meet at least two times per
    26  year.
    27  Section 320 321.  Penalties.                                      <--
    28     (a)  General.--It shall be unlawful for any person to:
    29         (1)  Submit a false or fraudulent claim or application
    30     under this subchapter, including, but not limited to:
    20030H0888B1889                 - 21 -     

     1             (i)  aiding or abetting another in the submission of
     2         a false or fraudulent claim or application;
     3             (ii)  receiving benefits or reimbursement under a
     4         Federal, state or a private program for prescription
     5         assistance and claiming or receiving duplicative benefits
     6         hereunder;
     7             (iii)  soliciting, receiving, offering or paying any
     8         kickback, bribe or rebate, in cash or in kind, from or to
     9         any person in connection with the furnishing of services
    10         under this subchapter;
    11             (iv)  engaging in a pattern of submitting claims that
    12         repeatedly uses incorrect National Drug Code numbers for
    13         the purpose of obtaining wrongful enhanced reimbursement;
    14         or
    15             (v)  otherwise violating any provision of this
    16         subchapter.
    17         (2)  Charge a copay if the amount of the copay exceeds
    18     the actual cost of the drug purchased.
    19     (b)  Civil penalty.--In addition to any appropriate criminal
    20  penalty for prohibited acts under this subchapter whether or not
    21  that act constitutes a crime under 18 Pa.C.S. (relating to
    22  crimes and offenses), a provider who violates this section may
    23  be liable for a civil penalty, which shall be collected by the
    24  department, in an amount not less than $500 and not more than
    25  $10,000 for each violation of this chapter. Each violation
    26  constitutes a separate offense. If the department collects three
    27  or more civil penalties against the same provider, the provider
    28  shall be ineligible to participate in either PACE or PACENET for
    29  a period of one year. If more than three civil penalties are
    30  collected from any provider, the department may determine that
    20030H0888B1889                 - 22 -     

     1  the provider is permanently ineligible to participate in PACE or
     2  PACENET.
     3     (c)  Suspension.--The license of any provider who has been
     4  found guilty under this subchapter shall be suspended for a
     5  period of one year. The license of any provider who has
     6  committed three or more violations of this subchapter may be
     7  suspended for a period of one year.
     8     (d)  Reparation.--Any provider, recipient or other person who
     9  is found guilty of a crime for violating this subchapter shall
    10  repay three times the value of the material gain received. In
    11  addition to the civil penalty authorized pursuant to subsection
    12  (b), the department may require the provider, recipient or other
    13  person to repay up to three times the value of any material gain
    14  to PACE or PACENET.
    15  Section 321 322.  Prescription Drug Education Program.            <--
    16     The department, in cooperation with the Department of Health,
    17  shall develop and implement a Statewide prescription drug
    18  education program designed to inform older adults of the dangers
    19  of prescription drug abuse and misuse. The prescription dug
    20  education program shall include, but not be limited to,
    21  information concerning the following:
    22         (1)  The hazards of prescription drug overdose.
    23         (2)  The potential dangers of mixing prescription drugs.
    24         (3)  The danger of retaining unused prescription drugs
    25     after the need to take them no longer exists.
    26         (4)  The necessity to carefully question physicians and
    27     pharmacists concerning the effects of taking prescription
    28     drugs.
    29         (5)  The advisability of maintaining a prescription drug
    30     profile or other record of prescription drug dosage and
    20030H0888B1889                 - 23 -     

     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 322 323.  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
    20030H0888B1889                 - 24 -     

     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,
    20030H0888B1889                 - 25 -     

     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     (g)  Contract.--The department shall contract for the audit
    25  as follows:
    26         (1)  The auditor shall earn a basic fee not to exceed
    27     $200,000. This fee shall be credited to the department if the
    28     auditor is compensated under paragraph (2) in the amount of
    29     at least $600,000.
    30         (2)  The auditor shall earn 30% of the funds collected by
    20030H0888B1889                 - 26 -     

     1     the department as a result of the audit.
     2                            SUBCHAPTER B
     3                 PRUDENT PHARMACEUTICAL PURCHASING
     4  Section 341.  Definitions.
     5     The following words and phrases when used in this subchapter
     6  shall have the meanings given to them in this section unless the
     7  context clearly indicates otherwise:
     8     "Covered prescription drug."  A legend drug, insulin, an
     9  insulin syringe or an insulin needle eligible for payment by the
    10  Commonwealth under PACE, PACENET or designated pharmaceutical
    11  programs.
    12     "Designated pharmaceutical programs."  The general assistance
    13  program and the Special Pharmaceutical Benefit Program in the
    14  Department of Public Welfare and the End Stage Renal Dialysis
    15  Program in the Department of Health.
    16     "PACE."  The program under Subchapter A.
    17     "PACENET."  The program established under section 318 319.     <--
    18  Section 342.  Rebate agreement.
    19     PACE, PACENET and designated pharmaceutical programs shall
    20  reimburse for any covered prescription drug with a rebate
    21  agreement drafted on the same basis as provided in section 1927
    22  of Title XIX of the Social Security Act (49 Stat. 620, 42 U.S.C.
    23  § 1396 r-8).
    24  Section 343.  Disposition of funds.
    25     (a)  PACE and PACENET.--Money received under this subchapter
    26  in connection with PACE and PACENET shall be deposited in the
    27  Pharmaceutical Assistance Contract for the Elderly Fund.
    28     (b)  Pharmaceutical programs.--Money received under this
    29  subchapter in connection with designated pharmaceutical programs
    30  shall be treated as a refund of expenditures to the
    20030H0888B1889                 - 27 -     

     1  appropriation which originally provided the funding for the
     2  pharmaceutical purchase.
     3                            SUBCHAPTER C                            <--
     4          PHARMACY BEST PRACTICES AND COST CONTROL PROGRAM
     5  Section 361.  Definitions.
     6     The following words and phrases when used in this subchapter
     7  shall have the meanings given to them in this section unless the
     8  context clearly indicates otherwise:
     9     "Committee."  The Pharmacy Best Practices and Cost Control
    10  Advisory Committee established in section 362.
    11     "Department."  The Department of Aging of the Commonwealth.
    12     "Program."  The Pharmacy Best Practices and Cost Control
    13  Program established in section 363.
    14     "Secretary."  The Secretary of Aging of the Commonwealth.
    15  § 362.  Advisory committee.
    16     (a)  Establishment.--The Pharmacy Best Practices and Cost
    17  Control Advisory Committee is established in the department.
    18     (b)  Members.--The committee is comprised of the following:
    19         (1)  The secretary or a designee, who shall serve as
    20     chairperson.
    21         (2)  Four members appointed by the Governor. Members
    22     under this paragraph must possess expertise in medicine or
    23     pharmacy.
    24         (3)  One member appointed by the President pro tempore of
    25     the Senate and one member appointed by the Minority Leader of
    26     the Senate.
    27         (4)  One member appointed by the Speaker of the House of
    28     Representatives and one member appointed by the Minority
    29     Leader of the House of Representatives.
    30     (c)  Terms.--Terms are as follows:
    20030H0888B1889                 - 28 -     

     1         (1)  The secretary shall serve ex officio.
     2         (2)  A member under subsection (b)(2) shall serve a term
     3     of six years.
     4         (3)  A member under subsection (b)(3) shall serve a term
     5     of four years but may be removed at the pleasure of the
     6     appointing authority.
     7         (4)  A member under subsection (b)(4) shall serve a term
     8     of two years but may be removed at the pleasure of the
     9     appointing authority.
    10         (5)  An appointment to fill a vacancy shall be for the
    11     period of the unexpired term or until a successor is
    12     appointed and qualified.
    13     (d)  Quorum.--A majority of the members of the committee
    14  constitutes a quorum.
    15     (e)  Compensation.--Members shall receive no payment for
    16  their services. Members who are not employees of State
    17  government shall be reimbursed for necessary and reasonable
    18  expenses incurred in the course of their official duties.
    19  Section 363.  Program.
    20     (a)  Establishment.--The secretary shall establish a Pharmacy
    21  Best Practices and Cost Control Program for PACE and PACENET
    22  enrollees designed to reduce the cost of providing prescription
    23  drugs, while maintaining high quality in prescription drug
    24  therapies. The program shall be implemented consistent with
    25  section 1927 of the Social Security Act (49 Stat. 620, 42 U.S.C.
    26  § 1396r-8). The program shall include all of the following:
    27         (1)  A preferred list of covered prescription drugs which
    28     identifies preferred choices within selected therapeutic
    29     classes for particular diseases and conditions, including
    30     generic alternatives. Therapeutic classes and drugs to be
    20030H0888B1889                 - 29 -     

     1     preferred in the classes shall be selected by the department
     2     upon recommendations by the committee.
     3         (2)  Utilization review procedures, including a prior
     4     authorization review process which meets the requirements of
     5     section 1927(d)(5) of the Social Security Act (42 U.S.C. §
     6     1396r-8(d)(5)).
     7         (3)  A supplemental rebate program or any other strategy
     8     designed to negotiate with pharmaceutical manufacturers to
     9     lower the cost of prescription drugs for the department's
    10     Medicaid program.
    11         (4)  Education programs, including a counterdetailing
    12     program, designed to provide information and education on the
    13     therapeutic and cost-effective utilization of prescription
    14     drugs to physicians, pharmacists and other health care
    15     professionals authorized to prescribe and dispense
    16     prescription drugs.
    17         (5)  Any other cost containment activity adopted by the
    18     department which is designed to reduce the cost of providing
    19     prescription drugs while maintaining high quality in
    20     prescription drug therapies.
    21     (b)  Pooling.--The secretary shall evaluate the benefits of
    22  participating, but is not required to participate, in joint
    23  prescription drug purchasing agreements or pooling arrangements
    24  with other states. Such actions shall include:
    25         (1)  The execution of any lawful joint purchasing or
    26     pooling agreements with other participating states which the
    27     secretary determines will lower the Medicaid cost of
    28     prescription drugs while maintaining high quality in
    29     prescription drug therapies.
    30         (2)  Renegotiation and amendment of existing contracts to
    20030H0888B1889                 - 30 -     

     1     which the department is a party if renegotiation and
     2     amendment will be of economic benefit to the department.
     3     (c)  Reports.--The secretary shall report quarterly to the
     4  committee on the department's progress in securing participation
     5  in joint purchasing or pooling agreements.
     6     (d)  Authorized coverage.--The program shall authorize
     7  pharmacy benefit coverage when a patient's health care provider
     8  prescribes a prescription drug not on the preferred drug list or
     9  a prescription drug which is not the list's preferred choice
    10  under the same terms as coverage for preferred choice drugs if
    11  any of the following apply:
    12         (1)  The preferred choice has not been effective or, with
    13     reasonable certainty, is not expected to be effective in
    14     treating the patient's condition.
    15         (2)  The preferred choice causes or is reasonably
    16     expected to cause adverse or harmful reactions in the
    17     patient.
    18         (3)  Other clinical criteria recommended by the committee
    19     and approved by the department is complied with.
    20         (4)  If the prescriber does not wish substitution to take
    21     place, the prescriber shall write "brand necessary" or "no
    22     substitution" in the prescriber's own handwriting on the
    23     prescription blank, together with a written statement that
    24     the generic or therapeutic equivalent has not been effective,
    25     or with reasonable certainty is not expected to be effective,
    26     in treating the patient's medical condition or causes or is
    27     reasonably expected to cause adverse or harmful reactions in
    28     the patient. In the case of an unwritten prescription, there
    29     shall be no substitution if the prescriber expressly
    30     indicates to the pharmacist that the brand name drug is
    20030H0888B1889                 - 31 -     

     1     necessary and substitution is not allowed because the generic
     2     or therapeutic equivalent has not been effective, or with
     3     reasonable certainty is not expected to be effective, in
     4     treating the patient's medical condition or causes or is
     5     reasonably expected to cause adverse or harmful reactions in
     6     the patient.
     7     (e)  Exclusions.--The department, with recommendations from
     8  the committee, shall determine diseases and therapeutic classes
     9  relating to treatment for diseases excluded from the program as
    10  to Medicaid enrollees already taking specified drugs at the time
    11  the program is implemented.
    12     (f)  Response.--The program's prescriber-indicated prior
    13  authorization process shall ensure that there will be a response
    14  to a request for prior authorization by telephone or other
    15  telecommunication device within 24 hours after receipt of the
    16  request for prior authorization and that a 72-hour supply of the
    17  drug prescribed will be provided in an emergency or when the
    18  program does not provide a response within 24 hours. The prior
    19  authorization process shall be designed to minimize
    20  administrative burdens on prescribers, pharmacists and
    21  consumers.
    22     (g)  Procedure.--The program shall establish procedures for
    23  the timely review of prescription drugs newly approved by the
    24  Food and Drug Administration, including procedures for the
    25  review of newly approved prescription drugs in emergency
    26  circumstances.
    27     (h)  Reports.--The department shall submit annual reports on
    28  the programs under subsection (a) and (b) to the Aging and Youth
    29  Committee, the Appropriations Committee and the Public Health
    30  and Welfare Committee of the Senate and the Aging and Older
    20030H0888B1889                 - 32 -     

     1  Adult Services Committee, the Appropriations Committee and the
     2  Health and Human Services Committee of the House of
     3  Representatives. The reports shall include classes of drugs,
     4  exceptions, cost effectiveness, movement of market share and
     5  increased utilization of generic drugs.
     6                           SUBCHAPTER D C                           <--
     7              PHARMACEUTICAL ASSISTANCE CLEARINGHOUSE
     8  Section 371 361.  Definitions.                                    <--
     9     The following words and phrases when used in this subchapter
    10  shall have the meanings given to them in this section unless the
    11  context clearly indicates otherwise:
    12     "Clearinghouse."  The Pharmaceutical Assistance Clearinghouse
    13  established in section 372 362.                                   <--
    14     "Department."  The Department of Aging of the Commonwealth.
    15     "Patient assistance program."  A program offered by a
    16  pharmaceutical manufacturer under which the manufacturer
    17  provides prescription medications at no charge or at a
    18  substantially reduced cost. The term does not include the
    19  provision of a drug as part of a clinical trial.
    20  Section 372 362.  Pharmaceutical Assistance Clearinghouse.        <--
    21     (a)  Establishment.--Within 120 days of the effective date of
    22  this subchapter, the department shall establish the
    23  Pharmaceutical Assistance Clearinghouse. Each pharmaceutical
    24  manufacturer that does business in this Commonwealth and offers
    25  a patient assistance program shall inform the department of all
    26  of the following:
    27         (1)  The existence of the patient assistance program.
    28         (2)  The eligibility requirements for the patient
    29     assistance program.
    30         (3)  The drugs covered by the patient assistance program.
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     1         (4)  Information, such as a telephone number, which may
     2     be used to apply for the patient assistance program.
     3     (b)  Information.--The clearinghouse shall maintain the
     4  information submitted by pharmaceutical manufacturers and make
     5  it available to the public.
     6     (c)  Staff.--The department shall ensure that the
     7  clearinghouse is staffed at least during normal business hours.
     8  The department shall contract for the services of a school of
     9  pharmacy to staff the clearinghouse.
    10  Section 373 363.  Toll-free telephone number.                     <--
    11     The department shall establish a toll-free telephone number
    12  through which the members of the public may obtain information
    13  from the clearinghouse about available patient assistance
    14  programs.
    15  Section 374 364.  Assistance available.                           <--
    16     (a)  Direct.--
    17         (1)  The clearinghouse shall assist any individual in
    18     determining whether a patient assistance program is offered
    19     for a particular drug and whether the individual may be
    20     eligible to obtain the drug through a patient assistance
    21     program.
    22         (2)  The clearinghouse may assist an individual who
    23     wishes to apply for a patient assistance program by assisting
    24     with the preparation of an application and coordinating
    25     communications between the individual's physician and a
    26     pharmaceutical manufacturer on behalf of the individual for
    27     the purpose of obtaining approval to participate in the
    28     patient assistance program.
    29     (b)  Referrals.--The clearinghouse shall make referrals to
    30  any publicly funded program for which it deems a patient
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     1  eligible.
     2  Section 375 365.  Reporting.                                      <--
     3     The department shall report annually to the Governor and the
     4  General Assembly on the activities of the clearinghouse. The
     5  report shall include:
     6         (1)  The number of individuals who have been assisted by
     7     the clearinghouse.
     8         (2)  The number and benefits of patient assistance
     9     programs listed with the clearinghouse.
    10         (3)  The number of patients referred to publicly funded
    11     programs under section 374(b) 364(B). Programs under this      <--
    12     paragraph include the Pharmaceutical Assistance Contract for
    13     the Elderly Program, medical assistance and programs of the
    14     Department of Veterans Affairs.
    15         (4)  Other information deemed relevant by the department.
    16                             CHAPTER 51
    17                      MISCELLANEOUS PROVISIONS
    18  Section 5101.  Federal programs.
    19     If the Federal Government enacts programs similar to PACE or
    20  PACENET, the State programs shall be construed to only
    21  supplement the Federal programs and all persons qualified for
    22  coverage under the Federal program shall utilize that Federal
    23  program before utilizing any State program.
    24  Section 5102.  Repeals.
    25     (a)  Specific.--Chapters 5 and 7 of the act of August 26,
    26  1971 (P.L.351, No.91), known as the State Lottery Law, are
    27  repealed.
    28     (b)  General.--All other acts and parts of acts are repealed
    29  insofar as they are inconsistent with this act.
    30  Section 5103.  Effective date.
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     1     This act shall take effect immediately.




















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