Chapter 714 Oregon Laws 2003
AN ACT
SB 875
Relating to prescription drugs; appropriating money; and declaring an emergency.
Be It Enacted by the People of the State of
Oregon:
SECTION
1. (1) As used in sections 1 to
4 of this 2003 Act:
(a)
“Pharmacy benefit manager” means an entity that, in addition to being a
prescription drug claims processor, negotiates and executes contracts with
pharmacies, manages preferred drug lists, negotiates rebates with prescription
drug manufacturers and serves as an intermediary between the Oregon
Prescription Drug Program, prescription drug manufacturers and pharmacies.
(b)
“Prescription drug claims processor” means an entity that processes and pays
prescription drug claims, adjudicates pharmacy claims, transmits prescription
drug prices and claims data between pharmacies and the Oregon Prescription Drug
Program and processes related payments to pharmacies.
(c)
“Program price” means the reimbursement rates and prescription drug prices
established by the administrator of the Oregon Prescription Drug Program.
(2)
The Oregon Prescription Drug Program is established in the Oregon Department of
Administrative Services. The purpose of the program is to:
(a)
Purchase prescription drugs or reimburse pharmacies for prescription drugs in
order to receive discounted prices and rebates;
(b)
Make prescription drugs available at the lowest possible cost to participants
in the program; and
(c)
Maintain a list of prescription drugs recommended as the most effective
prescription drugs available at the best possible prices.
(3)
The Director of the Oregon Department of Administrative Services shall appoint
an administrator of the Oregon Prescription Drug Program. The administrator
shall:
(a)
Negotiate price discounts and rebates on prescription drugs with prescription
drug manufacturers;
(b)
Purchase prescription drugs on behalf of individuals and entities that
participate in the program;
(c)
Contract with a prescription drug claims processor to adjudicate pharmacy
claims and transmit program prices to pharmacies;
(d)
Determine program prices and reimburse pharmacies for prescription drugs;
(e)
Adopt and implement a preferred drug list for the program;
(f)
Develop a system for allocating and distributing the operational costs of the
program and any rebates obtained to participants of the program; and
(g)
Cooperate with other states or regional consortia in the bulk purchase of
prescription drugs.
(4)
The following individuals or entities may participate in the program:
(a)
Public Employees’ Benefit Board;
(b)
Local governments as defined in ORS 174.116 and special government bodies as
defined in ORS 174.117 that directly or indirectly purchase prescription drugs;
(c)
Enrollees in the Senior Prescription Drug Assistance Program created under ORS
414.342;
(d)
Oregon Health and Science University established under ORS 353.020;
(e)
State agencies that directly or indirectly purchase prescription drugs,
including agencies that dispense prescription drugs directly to persons in
state-operated facilities; and
(f)
Residents of this state who:
(A)
Are more than 54 years of age;
(B)
Have a gross annual income that does not exceed 185 percent of the federal
poverty guidelines; and
(C)
Have not been covered under any private prescription drug benefit program for
the previous six months.
(5)
The state agency that receives federal Medicaid funds and is responsible for
implementing the state’s medical assistance program may not participate in the
program.
(6)
The administrator may establish different reimbursement rates or prescription
drug prices for pharmacies in rural areas to maintain statewide access to the
program.
(7)
The administrator shall establish the terms and conditions for a pharmacy to
enroll in the program. A licensed pharmacy that is willing to accept the terms
and conditions established by the administrator may apply to enroll in the
program.
(8)
Except as provided in subsection (9) of this section, the administrator may
not:
(a)
Contract with a pharmacy benefit manager;
(b)
Establish a state-managed wholesale or retail drug distribution or dispensing
system; or
(c)
Require pharmacies to maintain or allocate separate inventories for
prescription drugs dispensed through the program.
(9) The administrator shall contract with one or more entities to provide the functions of a prescription drug claims processor. The administrator may also contract with a pharmacy benefit manager to negotiate with prescription drug manufacturers on behalf of the administrator.
SECTION
2. (1) An individual or entity
described in section 1 (4) of this 2003 Act may apply to participate in the
Oregon Prescription Drug Program. Participants shall apply annually on an
application provided by the Oregon Department of Administrative Services. The department
may charge participants a nominal fee to participate in the program. The
department shall issue a prescription drug identification card annually to
participants of the program.
(2)
The department shall provide a mechanism to calculate and transmit the program
prices for prescription drugs to a pharmacy. The pharmacy shall charge the
participant the program price for a prescription drug.
(3)
A pharmacy may charge the participant the professional dispensing fee set by
the department.
(4) Prescription drug identification cards issued under this section must contain the information necessary for proper claims adjudication or transmission of price data.
SECTION 3. The Office for Oregon Health Policy and Research shall develop and recommend to the Oregon Department of Administrative Services a preferred drug list that identifies preferred choices of prescription drugs within therapeutic classes for particular diseases and conditions, including generic alternatives, for use in the Oregon Prescription Drug Program. The office shall conduct public hearings and use evidence-based evaluations on the effectiveness of similar prescription drugs to develop the preferred drug list.
SECTION 4. The Prescription Drug Purchasing Fund is established separate and distinct from the General Fund. The Prescription Drug Purchasing Fund shall consist of moneys appropriated to the fund by the Legislative Assembly and moneys received by the Oregon Department of Administrative Services for the purposes established in this section in the form of gifts, grants, bequests, endowments or donations. The moneys in the Prescription Drug Purchasing Fund are continuously appropriated to the Oregon Department of Administrative Services and shall be used to purchase prescription drugs, reimburse pharmacies for prescription drugs and reimburse the department for the costs of administering the Oregon Prescription Drug Program, including contracted services costs, computer costs, professional dispensing fees paid to retail pharmacies and other reasonable program costs. Interest earned on the fund shall be credited to the fund.
SECTION
5. The Oregon Department of
Administrative Services shall adopt rules to implement and administer sections
1 to 4 of this 2003 Act. The rules shall include but are not limited to
establishing procedures for:
(1)
Issuing prescription drug identification cards to individuals and entities that
participate in the Oregon Prescription Drug Program; and
(2) Enrolling pharmacies in the program.
SECTION 6. There is appropriated to the Oregon Department of Administrative Services, for the biennium beginning July 1, 2003, out of the General Fund, the amount of $198,398 for the purpose of carrying out sections 1 to 4 of this 2003 Act.
SECTION
7. (1) Not later than September
30, 2004, the Oregon Department of Administrative Services shall report to the
appropriate interim legislative committee and to the Emergency Board on the
department’s preparations to implement the Oregon Prescription Drug Program,
including but not limited to:
(a)
The number of individuals and entities that the department expects to enroll in
the program and the number of persons for whom the department expects to
purchase prescription drugs;
(b)
How the department expects the program to affect prescription drug prices for
participants;
(c)
The rules proposed or adopted by the department to implement the program;
(d)
The feasibility and advisability of expanding the program; and
(e)
A plan to expand the program if the department determines that expansion is
feasible and advisable.
(2) Subject to available funding for the program, not later than October 1, 2004, the department shall begin implementation of the program.
SECTION 8. If a rule adopted by the Oregon Department of Administrative Services under section 5 of this 2003 Act is not approved by the Seventy-third Legislative Assembly, the rule is repealed on January 1, 2006.
SECTION 9. This 2003 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2003 Act takes effect July 1, 2003.
Approved by the Governor August 29, 2003
Filed in the office of Secretary of State September 2, 2003
Effective date August 29, 2003
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