AB355: Bill Text

1. DHFS may require prior authorization for the purchase of any prescription drug that is not on PDL I; or

2. DHFS may monitor the prescribing practices of doctors, advanced practice nurses, and dentists to identify those practitioners who routinely prescribe drugs that are not on PDL I without medical justification and request that the applicable examining board, such as the Medical Examining Board, require the practitioner to participate in an education program on using the PDL.

Under the bill, manufacturers pay the supplemental rebates on drugs purchased under the state-supported health care assistance programs to DHFS. DHFS must allocate the supplemental rebate receipts to each of the state-supported health care assistance programs in the proportion in which they were earned.

PDL II. The bill allows DHFS to phase in use of PDL II by enrollees in the Prescription Drug Assistance Program and beneficiaries of health care plans for government employees, private employees, and persons who purchase health insurance coverage individually. To earn the rebates offered by manufacturers whose drugs are included on PDL II, the provider or purchaser of a health care plan must adopt policies that encourage use of the PDL, such as prior authorization requirements or higher copayments for drugs that are not on the PDL, or mandatory PDL education for practitioners who prescribe drugs that are not on the PDL without medical justification.

The state may adopt policies to encourage use of PDL II by nonrepresented state employees at any time. The state may not require represented state employees to adhere to policies to encourage use of PDL II unless the employees agree to such policies through collective bargaining.

A local government, private employer, or entity that negotiates health care coverage for a group of individuals is not eligible to earn the rebates under PDL II unless DHFS approves the policies that the local government, private employer, or entity has adopted to encourage use of the PDL. A local governmental unit may not adopt policies that encourage use of the PDL by represented employees, unless those employees agree to the policies through collective bargaining.

Under the bill, manufacturers pay the supplemental rebates on drugs purchased under health care plans for state employees and under the Prescription Drug Assistance Program to the state. DHFS must designate the recipients of rebates paid under health care plans for local government employees, employees of private employers, and other private group plans.

Prescription Drug Assistance Program

The bill creates a program under which Wisconsin residents who do not have health insurance that covers prescription drugs (except a Medigap policy) may purchase prescription drugs for prices that are established by DHFS. DHFS must issue a Prescription Drug Assistance Program enrollment card to each person who applies for the program, meets the eligibility requirements, and pays an annual enrollment fee. A person who has a prescription drug card and a prescription order written by a practitioner who is licensed in Wisconsin is entitled to purchase prescription drugs from a participating pharmacy or pharmacist for the amounts established by DHFS. Any pharmacy or pharmacist that is licensed in any state within the United States and that agrees to sell drugs to program enrollees for the amounts established by DHFS may participate in the Prescription Drug Assistance Program.

If a program enrollee purchases a prescription drug that is included on PDL II (described above) and for which the manufacturer has entered into a rebate agreement with DHFS, a participating pharmacy or pharmacist may not charge the person an amount that is greater than the maximum price and dispensing fee established by DHFS minus the rebate. The drug manufacturer must pay DHFS the rebate amount on the drug, and DHFS must reimburse the pharmacy or pharmacist the rebate amount.

The bill appropriates child welfare income augmentation funds, subject to the approval of the Joint Committee on Finance, to make initial drug rebate reimbursements to participating pharmacies and pharmacists.

Prescription drug manufacturer gift reporting

The bill requires drug manufacturers to report annually to the Pharmacy Examining Board gifts that the manufacturers make to the following people in connection with marketing or promotional activities: practitioners who may prescribe drugs in Wisconsin; pharmacists; owners and operators of pharmacies; hospitals, nursing homes, or organizations that offer health benefit plans, or employees of hospitals, nursing homes, or such organizations. Manufacturers must report the value, nature, and purpose of any gift that is valued at $25 or more, except that manufacturers are not required to report the provision of free drug samples that are intended to be distributed to patients. A manufacturer who violates the reporting requirements is subject to a $10,000 forfeiture for each violation. The Pharmacy Examining Board must annually report to the legislature on gift disclosures made by drug manufacturers.

HIRSP

The bill also grants DHFS authority, independent of the PDL provisions, to negotiate rebate agreements with drug manufacturers on prescription drugs that are purchased under HIRSP.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB355, s. 1 Section 1. 20.435 (4) (jg) of the statutes is created to read:

AB355,5,3 20.435 (4) (jg) Prescription drug assistance; enrollment fees. All moneys received from the payment of enrollment fees under s. 49.692 (3), to be used for administration of the program under s. 49.692.

AB355, s. 2 Section 2. 20.435 (4) (jh) of the statutes is created to read:

AB355,5,8 20.435 (4) (jh) Health insurance risk-sharing plan; drug manufacturer rebates. All moneys received from rebate payments by manufacturers under s. 149.14 (4c) (c), to pay a portion of the operating costs of the health insurance risk-sharing plan under ch. 149.

AB355, s. 3 Section 3. 20.435 (4) (jt) of the statutes is created to read:

AB355,5,12 20.435 (4) (jt) Preferred drug lists. All moneys received from the payment of fees under ss. 49.69 (6) (d) and 448.075 (2) to be used for administration of the preferred drug lists created under s. 49.69 (4).

AB355, s. 4 Section 4. 20.435 (4) (jx) of the statutes is created to read:

AB355,5,24 20.435 (4) (jx) Supplemental rebates on prescription drugs. All moneys received from rebate payments by manufacturers and labelers under s. 49.69 (5) and (6) to provide Medical Assistance Program benefits administered under s. 49.45; to be used for the Badger Care health care program for low-income families under s. 49.665; to pay pharmacies and pharmacists under s. 49.688 (7) for prescription drug assistance for elderly persons; to assist victims of disease, as provided in ss. 49.68, 49.683, and 49.685; to pay a portion of the operating costs of the health insurance risk-sharing plan under ch. 149; to purchase primary health care services under s. 146.93; to reimburse pharmacies and pharmacists under s. 49.692 (6); and to be credited to the public employee trust fund. The amounts expended under this paragraph shall be allocated as provided under s. 49.69 (7).

AB355, s. 5 Section 5. 20.435 (8) (mb) of the statutes, as affected by 2001 Wisconsin Act 16, is amended to read:

AB355,6,12 20.435 (8) (mb) Income augmentation services receipts. All moneys that are received under 42 USC 670 to 679a, 42 USC 1395 to 1395ddd, and 42 USC 1396 to 1396v as the result of income augmentation activities for which the state has contracted and all moneys that are received under 42 USC 1396 to 1396v in reimbursement of the cost of providing targeted case management services to children whose care is not eligible for reimbursement under 42 USC 670 to 679a, to be used as provided in s. 46.46 and 2003 Wisconsin Act .... (this act), section 25 (3). All moneys received under this paragraph in excess of the moneys necessary to support the costs specified in s. 46.46 and 2003 Wisconsin Act .... (this act), section 25 (3 ), shall be deposited in the general fund as a nonappropriated receipt.

AB355, s. 6 Section 6 . 20.435 (8) (mb) of the statutes, as affected by 2001 Wisconsin Act 16 and 2003 Wisconsin Act .... (this act), is amended to read:

AB355,6,24 20.435 (8) (mb) Income augmentation services receipts. All moneys that are received under 42 USC 670 to 679a, 42 USC 1395 to 1395ddd, and 42 USC 1396 to 1396v as the result of income augmentation activities for which the state has contracted and all moneys that are received under 42 USC 1396 to 1396v in reimbursement of the cost of providing targeted case management services to children whose care is not eligible for reimbursement under 42 USC 670 to 679a, to be used as provided in s. 46.46 and 2003 Wisconsin Act .... (this act), section 25 (3). All moneys received under this paragraph in excess of the moneys necessary to support the costs specified in s. 46.46 and 2003 Wisconsin Act .... (this act), section 25 (3 ), shall be deposited in the general fund as a nonappropriated receipt.

AB355, s. 7 Section 7. 40.03 (6) (k) of the statutes is created to read:

AB355,7,7 40.03 (6) (k) Upon request of the secretary of the department of health and family services, shall adopt policies that encourage use of the preferred drug list created under s. 49.69 (4) (a) 2. for group health insurance plans offered to state employees, except that for state employees covered by a collective bargaining agreement under subch. I or V of ch. 111 the board may adopt such policies that encourage use of the preferred drug list only if permitted under the collective bargaining agreement.

AB355, s. 8 Section 8. 49.45 (49) of the statutes is repealed and recreated to read:

AB355,7,11 49.45 (49) Prescription drug prior authorization committee. (a) The secretary shall exercise his or her authority under s. 15.04 (1) (c) to create a prescription drug prior authorization committee to do all of the following:

AB355,7,13 1. Advise the department on issues related to prior authorization decisions made concerning prescription drugs on behalf of Medical Assistance recipients.

AB355,7,15 2. Determine the relative clinical efficacy and safety of prescription drugs for the purpose of creating preferred drug lists as required under s. 49.69 (2).

AB355,7,17 (b) The secretary shall appoint as members of the prescription drug prior authorization committee at least the following:

AB355,7,18 1. Two physicians, as defined in s. 448.01 (5), who are currently in practice.

AB355,7,19 2. Two pharmacists, as defined in s. 450.01 (15).

AB355,7,22 3. One advocate for recipients of Medical Assistance who has sufficient medical background, as determined by the department, to evaluate the relative and clinical efficacy and safety of a prescription drug.

AB355,8,2 4. For the purpose of making determinations under s. 49.69 (2) regarding the relative clinical efficacy and safety of prescription drugs within a particular therapeutic class, persons who have medical expertise with respect to the disease or medical condition that the prescription drugs are intended to treat.

AB355,8,12 (c) A member of the prescription drug prior authorization committee may not be employed by or be a party to a contract with a manufacturer, as defined in s. 450.01 (12), a distributor, as defined in s. 450.01 (9), or a labeler, as defined in s. 49.69 (1) (d). Each committee member shall disclose any potential conflicts of interest related to an issue on which the committee acts and shall disclose the receipt of grant funding within the previous 36 months from a manufacturer, distributor, or labeler or ownership of stock in a manufacturer, distributor, or labeler. A member may not vote on an item if the member or the member's employer has a conflict of interest in the outcome of the vote. A member who may not vote on an item due to conflict of interest may participate in discussions related to the item.

AB355,8,17 (d) Notwithstanding the requirement under s. 15.04 (1) (c) that members of committees serve without compensation, members of the prescription drug prior authorization committee who are not officers or employees of this state shall be paid $100 for each day on which they are actually and necessarily engaged in performance of their duties.

AB355,8,22 (e) The prescription drug prior authorization committee shall accept information or commentary from representatives of the pharmaceutical manufacturing industry and from consumer advocates in the committee's review of prior authorization policies and in its determinations regarding the relative clinical efficacy and safety of prescription drugs.

AB355, s. 9 Section 9. 49.68 (3) (b) of the statutes is amended to read:

AB355,9,15 49.68 (3) (b) From the appropriation accounts under ss. 20.435 (4) (e) and, (je), and (jx) the state shall pay the cost of medical treatment required as a direct result of chronic renal disease of certified patients from the date of certification, including the cost of administering recombinant human erythropoietin to appropriate patients, whether the treatment is rendered in an approved facility in the state or in a dialysis or transplantation center which is approved as such by a contiguous state, subject to the conditions specified under par. (d). Approved facilities may include a hospital in-center dialysis unit or a nonhospital dialysis center which is closely affiliated with a home dialysis program supervised by an approved facility. Aid shall also be provided for all reasonable expenses incurred by a potential living-related donor, including evaluation, hospitalization, surgical costs and postoperative follow-up to the extent that these costs are not reimbursable under the federal medicare program or other insurance. In addition, all expenses incurred in the procurement, transportation, and preservation of cadaveric donor kidneys shall be covered to the extent that these costs are not otherwise reimbursable. All donor-related costs are chargeable to the recipient and reimbursable under this subsection.

AB355, s. 10 Section 10. 49.683 (2) of the statutes is amended to read:

AB355,9,18 49.683 (2) Approved costs for medical care under sub. (1) shall be paid from the appropriation accounts under s. 20.435 (4) (e) and, (je), and (jx).

AB355, s. 11 Section 11. 49.685 (2) of the statutes is amended to read:

AB355,9,25 49.685 (2) Assistance program. From the appropriation accounts under s. 20.435 (4) (e) and, (je), and (jx) the department shall establish a program of financial assistance to persons suffering from hemophilia and other related congenital bleeding disorders. The program shall assist such persons to purchase the blood derivatives and supplies necessary for home care. The program shall be administered through the comprehensive hemophilia treatment centers.

AB355, s. 12 Section 12. 49.688 (7) (a) of the statutes is amended to read:

AB355,10,18 49.688 (7) (a) Except as provided in par. (b), from the appropriation accounts under s. 20.435 (4) (bv) and, (j), beginning on September 1, 2002, and (jx) the department shall, under a schedule that is identical to that used by the department for payment of pharmacy provider claims under medical assistance, provide to pharmacies and pharmacists payments for prescription drugs sold by the pharmacies or pharmacists to persons eligible under sub. (2) who have paid the deductible specified under sub. (3) (b) 1. or 2. or who, under sub. (3) (b) 1., are not required to pay a deductible. The payment for each prescription drug under this paragraph shall be at the program payment rate, minus any copayment paid by the person under sub. (5) (a) 2. or 4., and plus, if applicable, incentive payments that are similar to those provided under s. 49.45 (8v). The department shall devise and distribute a claim form for use by pharmacies and pharmacists under this paragraph and may limit payment under this paragraph to those prescription drugs for which payment claims are submitted by pharmacists or pharmacies directly to the department. The department may apply to the program under this section the same utilization and cost control procedures that apply under rules promulgated by the department to medical assistance under subch. IV of ch. 49.

AB355, s. 13 Section 13. 49.69 of the statutes is created to read:

AB355,10,21 49.69 Preferred drug lists; prescription drug cost containment. (1) In this section:

AB355,10,23 (a) "Committee" means the prescription drug prior authorization committee created under s. 49.45 (49).

AB355,10,24 (b) "Generic name" has the meaning given in s. 450.12 (1) (b).

AB355,11,2 (c) "Health care coverage plan for government employees" means a health care coverage plan offered by the state or by a local governmental unit to its employees.

AB355,11,6 (d) "Labeler" means a person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale, and has a labeler code issued by the federal food and drug administration under 21 CFR 207.20 (b).

AB355,11,10 (e) "Local governmental unit" means a political subdivision of this state, a special purpose district in this state, an instrumentality or corporation of the political subdivision or special purpose district or a combination or subunit of any of the foregoing.

AB355,11,12 (f) "Manufacturer" means a person engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drugs.

AB355,11,14 (g) "Off-list prescription drug" means a prescription drug that is not included on the applicable preferred drug list created under sub. (4).

AB355,11,15 (h) "Practitioner" has the meaning given in s. 450.01 (17).

AB355,11,16 (i) "Prescription drug" has the meaning given in s. 450.01 (20).

AB355,11,18 (j) "Prescription Drug Assistance Program" means the program under s. 49.692.

AB355,11,22 (k) "Private health care coverage plan" means a health care coverage plan offered by a private employer to its employees or a health care coverage plan, other than a health care coverage plan for government employees, that is negotiated on behalf of a group of individuals who individually purchase coverage under the plan.

AB355,11,25 (L) "Single-source prescription drug" means a prescription drug that is produced or distributed under an original new drug application approved by the federal food and drug administration under 21 USC 355.

AB355,12,3 (m) "State-supported health care assistance program" means the Medical Assistance Program or the program under s. 49.665, 49.68, 49.683, 49.685, 49.688, or 146.93 or ch. 149.

AB355,12,6 (n) "Therapeutic class" means a class of prescription drugs that are intended to treat the same disease or medical condition by substantially similar biochemical and physiological mechanisms.

AB355,12,12 (2) (a) By January 1, 2004, the committee shall determine the relative clinical efficacy and safety of the prescription drugs within each therapeutic class. The committee shall conduct an evidence-based analysis to determine the relative clinical efficacy and safety, including a review of relevant literature. The committee shall periodically review and amend its determinations of relative clinical efficacy and safety.

AB355,12,16 (b) Notwithstanding par. (a), the committee may adopt determinations of relative clinical efficacy and safety made by a similar governmental entity in another state, if the other entity uses standards for determining clinical efficacy and safety that are similar to the standards adopted by the committee.

AB355,12,21 (c) The committee shall make a determination regarding the relative clinical efficacy and safety of a new single-source prescription drug within 60 days after it is approved by the federal food and drug administration or, if the committee does not receive sufficient information to make a determination within 60 days after approval, within 60 days after receiving such information.

AB355,13,4 (3) (a) The department shall solicit bids or proposals from manufacturers and labelers to provide rebates on prescription drugs that are purchased under state-supported health care assistance programs. Any rebate offered by a manufacturer or labeler in response to a solicitation under this paragraph shall be in addition to any rebate that the manufacturer or labeler provides under 42 USC 1396r-8 and in addition to any rebate required under state law or provided under an agreement between the state and a manufacturer or labeler that is in effect on the effective date of the solicitation.

AB355,13,9 (b) Subject to sub. (8), the department shall solicit bids or proposals from manufacturers and labelers to provide rebates on prescription drugs that are purchased under the Prescription Drug Assistance Program, under health care coverage plans for government employees, or under private health care coverage plans.

AB355,13,11 (c) The department may join with similar governmental entities in other states to solicit rebates under this subsection.

AB355,13,13 (4) (a) Using the method prescribed under par. (b) the department shall create the following 2 preferred drug lists:

AB355,13,14 1. One preferred drug list for state-supported health care assistance programs.

AB355,13,17 2. A 2nd preferred drug list for the Prescription Drug Assistance Program, health care coverage plans for government employees, and private health care coverage plans.

AB355,13,24 (b) The department shall consider the relative clinical efficacy and safety and the cost of each prescription drug in a therapeutic class, and place the most cost-effective prescription drug or drugs in the class on a preferred drug list. In determining cost under this paragraph, the department shall consider any rebate offered under sub. (3) (a) or (b), whichever is applicable, any existing rebate agreement or requirement, dosing practices, and any other relevant cost information.

AB355,14,8 (c) Notwithstanding par. (b), the department shall include all prescription drugs that the committee determines are clinically effective and safe for treating acquired immunodeficiency syndrome or the human immunodeficiency virus on both preferred drug lists created under this subsection. The department shall also include all prescription drugs that bear generic names on the preferred drug lists unless the prescription drugs that bear generic names are unreasonably priced compared to other prescription drugs within a therapeutic class that are selected for a preferred drug list.

AB355,14,13 (5) By July 1, 2004, the department shall enter into agreements with the manufacturers or labelers of the prescription drugs on the preferred drug list under sub. (4) (a) 1. to pay the state the rebates proposed under sub. (3) (a) on prescription drugs that are purchased under state-supported health care assistance programs on or after July 1, 2004.

AB355,14,17 (6) (a) Subject to sub. (8), the department shall enter into agreements with the manufacturers or labelers of prescription drugs on the preferred drug list under sub. (4) (a) 2. to pay the rebates proposed under sub. (3) (b) on prescription drugs that are purchased under the following programs or plans:

AB355,14,18 1. The Prescription Drug Assistance Program.

AB355,14,20 2. Health care coverage plans offered by the state to state employees who are not subject to collective bargaining.

AB355,14,24 3. Health care coverage plans offered by the state to state employees who are subject to collective bargaining, if the employees agree through collective bargaining to subject their health care coverage to policies that encourage use of the preferred drug list under sub. (4) (a) 2.

AB355,15,4 4. Health care coverage plans offered by a local governmental unit to employees of the local governmental unit who are subject to collective bargaining, if the employees agree through collective bargaining to subject their health care coverage to policies that encourage use of the preferred drug list under sub. (4) (a) 2.

AB355,15,8 5. Health care coverage plans offered by a local governmental unit to its employees who are not subject to collective bargaining or private health care coverage plans, if the department approves the plan, or the employment contract that provides for the plan under par. (b).

AB355,15,14 (b) An entity that purchases or negotiates health insurance coverage for employees of a local governmental unit or that purchases or negotiates a private health care coverage plan may apply to the department to approve a health care coverage plan, or an employment contract that provides for health care coverage. The department shall approve the plan or contract if it includes policies to encourage use of the preferred drug list under sub. (4) (a) 2.

AB355,15,16 (c) For purposes of this section, all of the following constitute policies to encourage use of the preferred drug list under sub. (4) (a) 2.: