72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 3799
 
                         House Bill 3664
 
Sponsored by Representative KRUSE, Senator WINTERS
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Requires practitioner prescribing legend drug for person
receiving medical assistance to write certain information on
prescription. Requires enrollee of medical assistance program who
is enrolling or reenrolling in fee-for-service payment system to
designate primary pharmacy or pharmacy network. Requires
Department of Human Services to adopt rules governing purchase of
legend drugs at pharmacy other than designated primary pharmacy
or pharmacy network and changes in pharmacy or pharmacy network.
Directs Department of Human Services to take specified actions to
determine amounts of and to collect rebates from pharmaceutical
manufacturers. Specifies Medicaid reimbursement rate to be paid
by department for certain prescriptions for biennium beginning
July 1, 2003.
  Declares emergency, effective on passage.
 
                        A BILL FOR AN ACT
Relating to Oregon Health Plan prescription coverage; creating
  new provisions; amending ORS 414.325; and declaring an
  emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 414.325 is amended to read:
  414.325. (1) As used in this section  { - , - }  { + :
  (a) + } 'Legend drug' means any drug requiring a prescription
by a practitioner  { - , as defined in ORS 689.005 - } .   { +
  (b) 'Pharmacy network' means a group of pharmacies using a
shared database or employing other electronic means to access
prescription information from multiple points of service of
persons enrolled in the Oregon Health Plan.
  (c) 'Practitioner' means a person licensed and operating within
the scope of such license to prescribe, dispense, conduct
research with respect to or administer drugs in the course of
professional practice or research:
  (A) In this state; or
  (B) In another state or territory of the United States not
residing in Oregon and registered under the federal Controlled
Substances Act. + }
  (2) A licensed practitioner may prescribe such drugs under this
chapter as the practitioner in the exercise of professional
judgment considers appropriate for the diagnosis or treatment of
the patient in the practitioner's care and within the scope of
practice. Prescriptions shall be dispensed in the generic form
pursuant to ORS 689.515, 689.854 and 689.857 and pursuant to
rules of the Department of Human Services unless the practitioner
prescribes otherwise and an exception is granted by the
department.
  (3) The department shall pay only for drugs in the generic form
if the federal Food and Drug Administration has approved a
generic version of a particular brand name drug that is
chemically identical to the brand name drug according to federal
Food and Drug Administration rating standards, unless an
exception has been granted by the department.
  (4) An exception must be applied for and granted before the
department is required to pay for minor tranquilizers and
amphetamines and amphetamine derivatives, as defined by rule of
the department.
  (5) Notwithstanding subsections (1) to (4) of this section, the
department is authorized to:
  (a) Withhold payment for a legend drug when federal financial
participation is not available;   { - and - }
  (b) Require prior authorization of payment for drugs that the
department has determined should be limited to those conditions
generally recognized as appropriate by the medical
profession { + ; and
  (c) Require prior authorization of payment for drugs for
individuals whose prescription drug use exceeded 15 drugs in the
preceding six-month period + }.
  (6) Notwithstanding subsection (3) of this section, the
department may not limit legend drugs when used as approved by
the federal Food and Drug Administration to treat mental illness,
HIV and AIDS, and cancer.  { +
  (7) If a practitioner prescribes a legend drug under this
chapter, the practitioner must write on the prescription:
  (a) The diagnosis code for the condition on the prioritized
list of services covered for payment for which the legend drug is
being prescribed; and
  (b) The practitioner's state medical assistance program
provider number.
  (8) At the time of enrolling or reenrolling in a
fee-for-service payment system within the Oregon Health Plan, a
person shall designate the primary pharmacy or pharmacy network
that will dispense to the person legend drugs covered by the
medical assistance program.
  (9) The department shall adopt rules that:
  (a) Allow a person enrolled in the Oregon Health Plan to obtain
a legend drug at a pharmacy other than a designated primary
pharmacy or pharmacy network;
  (b) Allow a person enrolled in the Oregon Health Plan to change
the designation of a primary pharmacy or pharmacy network;
  (c) Establish procedures to ensure that a primary pharmacy or
pharmacy network will receive notice if a person enrolled in the
Oregon Health Plan obtains a legend drug at another pharmacy; and
  (d) Allow payment at the point of sale to a pharmacy other than
a primary pharmacy or pharmacy network for a legend drug obtained
by a person enrolled in the Oregon Health Plan. + }
  SECTION 2. ORS 414.325, as amended by section 6, chapter 897,
Oregon Laws 2001, is amended to read:
  414.325. (1) As used in this section  { - , - }  { + :
  (a) + } 'Legend drug' means any drug requiring a prescription
by a practitioner  { - , as defined in ORS 689.005 - } .
   { +  (b) 'Pharmacy network' means a group of pharmacies using
a shared database or employing other electronic means to access
prescription information from multiple points of service of
persons enrolled in the Oregon Health Plan.
  (c) 'Practitioner' means a person licensed and operating within
the scope of such license to prescribe, dispense, conduct
research with respect to or administer drugs in the course of
professional practice or research:
  (A) In this state; or
  (B) In another state or territory of the United States not
residing in Oregon and registered under the federal Controlled
Substances Act. + }
  (2) A licensed practitioner may prescribe such drugs under this
chapter as the practitioner in the exercise of professional
judgment considers appropriate for the diagnosis or treatment of
the patient in the practitioner's care and within the scope of
practice. Prescriptions shall be dispensed in the generic form
pursuant to ORS 689.515, 689.854 and 689.857 and pursuant to
rules of the Department of Human Services unless the practitioner
prescribes otherwise and an exception is granted by the
department.
  (3)   { - Except as provided in subsections (4) and (5) of this
section, - }  The department shall place no limit on the type of
legend drug that may be prescribed by a practitioner, but the
department shall pay only for drugs in the generic form unless an
exception has been granted by the department.
  (4)   { - Notwithstanding subsection (3) of this section, - }
An exception must be applied for and granted before the
department is required to pay for minor tranquilizers and
amphetamines and amphetamine derivatives, as defined by rule of
the department.
    { - (5)(a) - }   { + (5) + } Notwithstanding subsections (1)
to (4) of this section   { - and except as provided in paragraph
(b) of this subsection - } , the department is authorized to:
    { - (A) - }   { + (a) + } Withhold payment for a legend drug
when federal financial participation is not available;
 { - and - }
    { - (B) - }   { + (b) + } Require prior authorization of
payment for drugs that the department has determined should be
limited to those conditions generally recognized as appropriate
by the medical profession { + ; and
  (c) Require prior authorization of payment for drugs for
individuals whose prescription drug use exceeded 15 drugs in the
preceding six-month period + }.
    { - (b) - }   { + (6) Notwithstanding subsection (5) of this
section, + } the department may not require prior authorization
for therapeutic classes of nonsedating antihistamines and nasal
inhalers, as defined by rule by the department, when prescribed
by an allergist for treatment of any of the following conditions,
as described by the Health Services Commission on the funded
portion of its prioritized list of services:
    { - (A) - }   { + (a) + } Asthma;
    { - (B) - }   { + (b) + } Sinusitis;
    { - (C) - }   { + (c) + } Rhinitis; or
    { - (D) - }   { + (d) + } Allergies.
   { +  (7) If a practitioner prescribes a legend drug under this
chapter, the practitioner must write on the prescription:
  (a) The diagnosis code for the condition on the prioritized
list of services covered for payment for which the legend drug is
being prescribed; and
  (b) The practitioner's state medical assistance program
provider number.
  (8) At the time of enrolling or reenrolling in a
fee-for-service payment system within the Oregon Health Plan, a
person shall designate the primary pharmacy or pharmacy network
that will dispense to the person legend drugs covered by the
medical assistance program.
  (9) The department shall adopt rules that:
  (a) Allow a person enrolled in the Oregon Health Plan to obtain
a legend drug at a pharmacy other than a designated primary
pharmacy or pharmacy network;
  (b) Allow a person enrolled in the Oregon Health Plan to change
the designation of a primary pharmacy or pharmacy network;
 
  (c) Establish procedures to ensure that a primary pharmacy or
pharmacy network will receive notice if a person enrolled in the
Oregon Health Plan obtains a legend drug at another pharmacy; and
  (d) Allow payment at the point of sale to a pharmacy other than
a primary pharmacy or pharmacy network for a legend drug obtained
by a person enrolled in the Oregon Health Plan. + }
  SECTION 3.  { + The Department of Human Services shall:
  (1) Expedite the resolution of rebate disputes between
pharmaceutical manufacturers that participate in the federal
Medicaid Drug Rebate Program and the department; and
  (2) Make significant efforts to adjudicate and collect the
total amount of outstanding balances owed to the department by
pharmaceutical manufacturers for unpaid drug rebates. + }
  SECTION 4.  { + The Department of Human Services shall seek
agreements with manufacturers of generic drugs prescribed for
persons enrolled in the Oregon Health Plan to provide rebates of
at least 15.1 percent of the average manufacturer price for the
manufacturer's generic products. The agreements shall require
that if a generic drug manufacturer pays federal rebates for
Medicaid-reimbursed drugs at a level below 15.1 percent, the
manufacturer must provide a supplemental rebate to the department
in the amount necessary to achieve at least a 15.1 percent rebate
level. + }
  SECTION 5.  { + (1) As used in this section, 'capitated
services' means those services covered under the Oregon Health
Plan that a contractor agrees to provide for a capitation
payment.
  (2) The Department of Human Services shall adopt rules to
exclude from capitated services prescription drugs prescribed for
specified health conditions. + }
  SECTION 6.  { + The Department of Human Services shall adopt
rules that establish a maximum allowable cost for a
multiple-source prescription drug that is available from at least
three manufacturers or labelers. + }
  SECTION 7.  { + For the biennium beginning July 1, 2003, the
Department of Human Services shall pay a Medicaid reimbursement
rate of 89 percent of the average wholesale price plus $3.91 per
prescription for those prescriptions that are reimbursed at a
percentage of average wholesale price to pharmacies that:
  (1) Do not provide retail prescription services; and
  (2) Serve Medicaid clients in a nursing facility or a community
based care living facility. + }
  SECTION 8.  { + Section 7 of this 2003 Act is repealed on
January 2, 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 on its
passage. + }
                         ----------