PRINTER'S NO. 3493
No. 2598 Session of 1996
INTRODUCED BY READSHAW, BLAUM, DeWEESE, ITKIN, COY, BELARDI,
EVANS, MUNDY, TRICH, STURLA, BEBKO-JONES, GEORGE, McCALL,
LAUGHLIN, GORDNER, GAMBLE, RIEGER, CURRY, TIGUE, KUKOVICH,
CALTAGIRONE, JAROLIN, WALKO, MELIO, STABACK, SEMMEL,
ROBINSON, LEH, DONATUCCI, CAPPABIANCA, HALUSKA, CORRIGAN,
COWELL, HERMAN, MICOZZIE, BELFANTI, LEVDANSKY, FAJT, SURRA,
TRAVAGLIO, SANTONI, BUXTON, VEON, B. SMITH, JOSEPHS,
PETRARCA, STEELMAN, GIGLIOTTI, FARMER, SCRIMENTI, PISTELLA,
McGEEHAN, ROBERTS, BARD, LUCYK, YOUNGBLOOD, ARGALL, BOSCOLA,
ROONEY, MERRY, REBER, TANGRETTI, CAWLEY, DALEY, KREBS,
TRELLO, DERMODY, M. COHEN AND RUBLEY, MAY 7, 1996
REFERRED TO COMMITTEE ON AGING AND YOUTH, MAY 7, 1996
AN ACT
1 Amending the act of August 14, 1991 (P.L.342, No.36), entitled
2 "An act providing for the preservation of the State Lottery
3 Fund; further providing for pharmaceutical assistance for the
4 elderly; further providing for transportation assistance to
5 the elderly; providing for pharmaceutical purchasing;
6 conferring powers and duties upon the Department of Aging,
7 the Department of Revenue and the Department of
8 Transportation; imposing penalties; and making repeals,"
9 further defining "maximum annual income"; adding definitions;
10 and providing for the use of brand name drugs and for
11 rebates.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. The definition of "maximum annual income" in
15 section 302 of the act of August 14, 1991 (P.L.342, No.36),
16 known as the Lottery Fund Preservation Act, is amended and the
17 section is amended by adding definitions to read:
18 Section 302. Definitions.
1 The following words and phrases when used in this chapter
2 shall have the meanings given to them in this section unless the
3 context clearly indicates otherwise:
4 * * *
5 "Area Agency on Aging." An agency designated by the
6 Department of Aging to administer and develop an area plan for a
7 comprehensive and coordinated system of services for older
8 people within the boundaries of a defined planning and service
9 area.
10 * * *
11 "Maximum annual income." Annual income as determined by the
12 department.
13 (1) Except as provided in paragraph (2), such amount
14 shall not exceed $13,000 in the case of single persons nor
15 $16,200 in the case of the combined annual income of married
16 persons.
17 (2) If this chapter takes effect before September 1,
18 1991, the following shall apply:
19 (i) Before September 1, 1991, such amount shall not
20 exceed $12,000 in the case of single persons nor $15,000
21 in the case of the combined annual income of married
22 persons.
23 (ii) After August 31, 1991, such amount [shall] not
24 to exceed [$13,000] $15,000 in the case of single persons
25 nor [$16,200] $18,200 in the case of the combined annual
26 income of married persons.
27 * * *
28 "PACE pharmacist." A pharmacist employed by a pharmacy that
29 is enrolled as a provider in the PACE Program or the General
30 Assistance Program.
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1 "Prescription Evaluation Program (PEP)." Program operated by
2 the Area Agency on Aging in cooperation with PACE pharmacists
3 through grants administered by the Department of Aging designed
4 to educate seniors on their prescription drug regimens.
5 * * *
6 Section 2. Sections 303(h)(6), (9) and (10) and 307 of the
7 act, amended December 9, 1992, (P.L.792, No.128), are amended to
8 read:
9 Section 303. Responsibilities of department.
10 * * *
11 (h) Program criteria.--The program shall include the
12 following criteria:
13 * * *
14 (6) The program shall consist of payments to pharmacies
15 on behalf of eligible claimants for the average wholesale
16 cost of drugs, insulin, insulin syringes and insulin needles
17 which exceed the copayment plus a dispensing fee of at least
18 [$2.75] $3.25 or the dispensing fee established by the
19 department by regulation, whichever is greater. In addition
20 to current dispensing responsibilities, pharmacists shall be
21 available to evaluate the prescription regiment of seniors
22 upon request as well as in cooperation with any Area Agency
23 on Aging as prescribed in the Prescription Evaluation Program
24 (PEP) under section 307(b). This evaluation shall include
25 the following:
26 (i) A pharmacist shall conduct a prospective drug
27 review of the patient profile, maintained in the
28 pharmacist's pharmacy in accordance with subparagraph
29 (iii) before filing or delivering a new prescription to
30 an individual in order to attempt to identify any
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1 potential drug therapy problems due to therapeutic
2 duplication, drug-interactions, incorrect drug dosage or
3 duration of drug treatment, drug allergy interactions and
4 clinical misuse.
5 (ii) In performing a prospective drug review, an
6 offer to counsel or discuss matters which the pharmacist,
7 in the exercise of the pharmacist's professional
8 judgment, deems significant shall be made to each person
9 or caregiver who presents a prescription. The offer to
10 counsel may be made by the pharmacist in person, by a
11 designee or by toll-free telephone. If personal contact
12 is not made between the pharmacist or a designee and the
13 patient or caregiver, a written offer to counsel
14 accompanying the prescription shall be made. If a person
15 indicates that he wants counseling on his entire drug
16 regimen, the pharmacist shall counsel the person, in
17 person, upon request or according to a scheduled
18 appointment within a reasonable time period. The
19 following are examples of matters which a pharmacist, in
20 the exercise of his professional judgment, might deem
21 significant:
22 (A) The name and description of the medications.
23 (B) The route, dosage form, dosage route of
24 administration and duration of drug therapy.
25 (C) Special directions and precautions for
26 preparation, administration and use by the patient.
27 (D) Common severe side effects or adverse side
28 effects or interactions and therapeutic
29 contradictions that may be encountered, including
30 their avoidance and the action required if they
19960H2598B3493 - 4 -
1 occur.
2 (E) Techniques for self-monitoring drug therapy.
3 (F) Proper storage.
4 (G) Prescription refill information.
5 (H) Action to be taken in the event of a missed
6 dose.
7 (iii) The pharmacist shall make a reasonable effort
8 to obtain, record and maintain the following information
9 about each patient:
10 (A) The name, address, telephone number, date of
11 birth and gender.
12 (B) Individual history if significant, including
13 known drug allergies and drug reactions, and a
14 comprehensive list of their medications and relevant
15 devices.
16 (C) Pharmacist comments relative to the
17 individual's drug therapy.
18 (D) The patient profile may be maintained
19 electronically or manually.
20 (E) The pharmacist is not required to provided
21 consultation in regard to significant matters under
22 subparagraph (ii) or obtain information about the
23 patient for the patient profile under this subsection
24 when a patient or caregiver of the patient refuses
25 the offer to consult or refuses to divulge
26 information for the patient profile.
27 * * *
28 (9) Notwithstanding any other statute or regulation, if
29 an A-rated generic therapeutically equivalent drug is
30 available for dispensing to a claimant, the provider shall
19960H2598B3493 - 5 -
1 dispense the A-rated generic therapeutically equivalent drug
2 to the claimant. The department shall not reimburse providers
3 for brand name products except in the following
4 circumstances:
5 (i) There is no A-rated generic therapeutically
6 equivalent drug available on the market. This
7 subparagraph does not apply to the lack of availability
8 of an A-rated generic therapeutically equivalent drug in
9 the providing pharmacy, unless it can be shown to the
10 department that the provider made reasonable attempts to
11 obtain the A-rated generic therapeutically equivalent
12 drug or that there was an unforeseeable demand and
13 depletion of the supply of the A-rated generic
14 therapeutically equivalent drug. In either case, the
15 department shall reimburse the provider for the average
16 wholesale cost plus a dispensing fee based on the least
17 expensive A-rated generic therapeutically equivalent drug
18 for the brand drug dispensed.
19 (ii) An A-rated generic therapeutically equivalent
20 drug is deemed by the department, in consultation with a
21 utilization review committee, to have too narrow a
22 therapeutic index for safe and effective dispensing in
23 the community setting. The department shall notify
24 providing pharmacies of A-rated generic therapeutically
25 equivalent drugs that are identified pursuant to this
26 subparagraph on a regular basis.
27 (iii) The Department of Health has determined that a
28 drug shall not be recognized as an A-rated generic
29 therapeutically equivalent drug for purpose of
30 substitution under section 5(b) of the act of November
19960H2598B3493 - 6 -
1 24, 1976 (P.L.1163, No.259), referred to as the Generic
2 Equivalent Drug Law.
3 (iv) At the time of dispensing, the provider has a
4 prescription on which the brand name drug dispensed is
5 billed to the program by the provider at a usual and
6 customary charge which is equal to or less than the least
7 expensive usual and customary charge of any A-rated
8 generic therapeutically equivalent drug reasonably
9 available on the market to the provider.
10 [(v) At the time of dispensing, the provider has a
11 prescription on which the prescriber has handwritten
12 "brand necessary" or "brand medically necessary" on the
13 prescription.]
14 (10) If a claimant chooses not to accept the A-rated
15 generic therapeutically equivalent drug required by paragraph
16 (9), the claimant shall be liable for the copayment and 70%
17 of the average wholesale cost of the brand name drug. This
18 paragraph shall not apply if the prescriber can demonstrate
19 in writing on a form provided by the department that:
20 (i) The claimant is in danger of an adverse reaction
21 from use of the generic therapeutically equivalent drug
22 required under paragraph (9).
23 (ii) Use of the prescribed brand name drug would
24 eliminate the danger of the adverse reaction.
25 * * *
26 Section 307. [Prescription drug education program.] Consumer
27 education.
28 (a) Prescription drug education program.--The department, in
29 cooperation with the Department of Health, shall develop and
30 implement a Statewide prescription drug education program
19960H2598B3493 - 7 -
1 designed to inform older adults of the dangers of prescription
2 drug abuse and misuse. The prescription drug education program
3 shall include, but not be limited to, information concerning the
4 following:
5 (1) The hazards of prescription drug overdose.
6 (2) The potential dangers of mixing prescription drugs.
7 (3) The danger of retaining unused prescription drugs
8 after the need to take them no longer exists.
9 (4) The necessity to carefully question physicians and
10 pharmacists concerning the effects of taking prescription
11 drugs, including the differences between brand name drugs and
12 generically equivalent drugs.
13 (5) The advisability of maintaining a prescription drug
14 profile or other record of prescription drug dosage and
15 frequency of dosage.
16 (6) The desirability of advising family members of the
17 types and proper dosage of prescription drugs which are being
18 taken.
19 (7) The dangers of taking prescription drugs in excess
20 of prescribed dosages.
21 (8) The need to obtain complete, detailed directions
22 from the physician or pharmacist concerning the time period a
23 prescription drug should be taken.
24 (b) Prescription Evaluation Program (PEP) grants.--In order
25 to further the education efforts specified in subsection (a),
26 the department shall administer a grant program for the
27 development and implementation of any Prescription Evaluation
28 Program (PEP) to be operated in cooperation with PACE
29 pharmacists. Upon the request of an Area Agency on Aging, PACE
30 pharmacists will participate in programs to counsel seniors
19960H2598B3493 - 8 -
1 about the prescription drugs they are currently taking. The
2 evaluations made at Prescription Evaluation Program (PEP) events
3 shall include a review of the patient's drug regiment in an
4 attempt to identify potential drug therapy problems due to
5 therapeutic duplication, drug interactions, incorrect drug
6 dosage or duration of drug treatment, drug-allergy interactions,
7 incorrect drug dosage and clinical abuse or misuse. PACE
8 pharmacists shall maintain patient profiles, electronically or
9 manually as described in section 303(h)(6)(iii) as records of
10 their participation in any evaluation program. Under
11 Prescription Evaluation Program (PEP), each senior citizen shall
12 be guaranteed at least one review of their prescriptions per
13 year. Grant funds will be managed and administered in accordance
14 with subsection (c).
15 (c) Grants.--
16 (1) Grant application forms shall be developed by the
17 department and distributed to all Area Agencies on Aging.
18 Applications shall include information on proposed
19 Prescription Evaluation Program (PEP) events, event locations
20 and cost estimates.
21 (2) Grants will be made to any Area Agency on Aging and
22 are not to exceed $10,000 per agency. Any Area Agency on
23 Aging shall, at least quarterly, hold Prescription Evaluation
24 Programs (PEP) across the service area. Funds are to be used
25 for costs incurred in development and implementation of
26 Prescription Evaluation Programs (PEP) which may include, but
27 are not limited to, the purchasing of necessary materials,
28 outreach and advertising of the programs.
29 (3) Prescription Evaluation Program (PEP) grants shall
30 be funded through an annual appropriation of $1,000,000 from
19960H2598B3493 - 9 -
1 the fund. Unallocated funds shall be returned to the fund at
2 the end of each fiscal year.
3 Section 3. The definition of "Producer Price Index for
4 Pharmaceuticals" in section 602 of the act, added December 9,
5 1992 (P.L.792, No.128), is amended and the section is amended by
6 adding definitions to read:
7 Section 602. Definitions.
8 The following words and phrases when used in this chapter
9 shall have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 * * *
12 "Best price."
13 (1) For current covered prescription drugs, the lesser
14 of:
15 (i) the lowest price available for the drug in this
16 Commonwealth from the manufacturer to any wholesaler,
17 retailer, provider, private entity or governmental entity
18 doing business in this Commonwealth during the quarter;
19 or
20 (ii) the lowest price available for the drug, as of
21 July 1, 1995, in this Commonwealth from the manufacturer
22 to any wholesaler, retailer, provider, private entity or
23 governmental entity doing business in this Commonwealth
24 increased by the Consumer Price Index-Urban from July
25 1995 to the month before the beginning of the calendar
26 quarter involved.
27 (2) For new drugs approved for marketing after July 1,
28 1995, the lesser of:
29 (i) the lowest price available for the drug in this
30 Commonwealth from the manufacturer to any wholesaler,
19960H2598B3493 - 10 -
1 retailer, provider, private entity or governmental entity
2 doing business in this Commonwealth during the quarter;
3 or
4 (ii) the lowest price available for the drug, during
5 the first month in which the drug was marketed, in this
6 Commonwealth from the manufacturer to any wholesaler,
7 retailer, provider, private entity or governmental entity
8 doing business in this Commonwealth, increased by the
9 percentage increase in the Consumer Price Index-Urban
10 from the first day of the first month of marketing to the
11 beginning of the calendar quarter involved.
12 (3) The term excludes any price less than 8% of the
13 average manufacturer price in the same quarter for which the
14 average manufacturer price is computed.
15 (4) The term includes Federal supply schedule prices.
16 (5) Best price shall be determined on a unit basis and
17 shall be adjusted by the manufacturer if cumulative
18 discounts, rebates or other arrangements subsequently adjust
19 the prices actually realized. For capitated sales, the
20 allocation of the discount shall be made proportionally to
21 the dollar value of the units of each drug sold under the
22 capitated arrangement.
23 * * *
24 "Consumer Price Index-Urban." The index of consumer prices
25 developed and updated by the Bureau of Labor Statistics of the
26 United States Department of Labor.
27 * * *
28 ["Producer Price Index for Pharmaceuticals." The
29 prescription drug producer price index compiled by the Bureau of
30 Labor Statistics of the United States Department of Labor for
19960H2598B3493 - 11 -
1 measuring average changes in selling prices received by domestic
2 drug manufacturers.]
3 * * *
4 Section 4. Sections 604(c), 605(a) and 605.1(a) of the act,
5 added December 9, 1992 (P.L.792, No.128), are amended to read:
6 Section 604. Terms of rebate agreement.
7 * * *
8 (c) Manufacturer provision of price information.--
9 (1) Each manufacturer with an agreement in effect under
10 this chapter shall report [the average manufacturer price for
11 all covered prescription drugs produced by that manufacturer]
12 to the department not later than 30 days after the last day
13 of each quarter[.] all of the following:
14 (i) The average manufacturer price.
15 (ii) For single-source drugs and innovator multiple
16 source drugs:
17 (A) the manufacturer's best price for covered
18 prescription drugs for the quarter; and
19 (B) the best price in effect on July 1, 1995.
20 (iii) For new drugs, the best price in effect during
21 the first month of marketing the new drug.
22 * * *
23 Section 605. Amount of rebate.
24 (a) Single-source drugs and innovator multiple-source
25 drugs.--With respect to single-source drugs and innovator
26 multiple-source drugs, each manufacturer shall remit a rebate to
27 the Commonwealth. Except as otherwise provided in this section,
28 the amount of the rebate to the Commonwealth per calendar
29 quarter with respect to each dosage form and strength of single-
30 source drugs and innovator multiple-source drugs shall be [as
19960H2598B3493 - 12 -
1 follows:] equal to the product of the total number of units of
2 each dosage form and strength reimbursed by the PACE Program and
3 the General Assistance Program in the quarter and the following:
4 (1) For quarters beginning after [December 31, 1990, and
5 ending before October 1, 1992,] April 1996 [the product of
6 the total number of units of each dosage form and strength
7 reimbursed by the PACE Program and the General Assistance
8 Program in the quarter and the difference between the average
9 manufacturer price and 87.5% of that price, after deducting
10 customary prompt payment discounts, for the quarter.] the
11 greater of the following:
12 (i) The difference between the average manufacturer
13 price and 85% of that price after deducting customary
14 prompt payment discounts for the quarter.
15 (ii) The difference between the average manufacturer
16 price for a drug and the best price. For calendar
17 quarters beginning after April 1, 1996, and ending before
18 January 1, 1997, the rebate under this subparagraph shall
19 not exceed 25% of the average manufacturer price. For
20 calendar quarters beginning after December 31, 1996, and
21 ending before January 1, 1998, the rebate under this
22 subparagraph shall not exceed 50% of the average
23 manufacturer price.
24 * * *
25 Section 605.1. Excessive pharmaceutical price inflation
26 discount.
27 (a) General rule.--A discount shall be provided to the
28 department for all covered prescription drugs. The discount
29 shall be calculated as follows:
30 (1) For each quarter for which a rebate under section
19960H2598B3493 - 13 -
1 605(a) and (b) is to be paid after December 31, 1991, the
2 average manufacturer price for each dosage form and strength
3 of a covered prescription drug shall be compared to the
4 average manufacturer price for the same form and strength in
5 the previous calendar year, and a percentage increase shall
6 be calculated.
7 (2) For each quarter under paragraph (1), the average
8 percentage increase in the [Producer Price Index for
9 Pharmaceuticals] Consumer Price Index-Urban over the same
10 quarter in the previous calendar year shall be calculated.
11 (3) If the calculation under paragraph (1) is greater
12 than the calculation under paragraph (2), the discount amount
13 for each quarter shall be equal to the product of:
14 (i) the difference between the calculations under
15 paragraphs (1) and (2); and
16 (ii) the total number of units of each dosage form
17 and strength reimbursed by the PACE Program and General
18 Assistance Program and the average manufacturer price
19 reported by the manufacturer under section 604(c)(1).
20 * * *
21 Section 5. This act shall take effect in 60 days.
E1L72JLW/19960H2598B3493 - 14 -