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 1970
Senate Bill 567
Sponsored by Senator CORCORAN
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.
Creates Oregon Prescription Drug Purchasing Corporation for
purpose of purchasing prescription drugs in bulk for public
bodies.
Requires pharmacy benefit management companies to act solely in
interest of health benefit plans and enrollees and to notify
insurer of conflicts of interest.
Declares emergency, effective July 1, 2003.
A BILL FOR AN ACT
Relating to prescription drugs; appropriating money; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + (1) The Oregon Prescription Drug Purchasing
Corporation is created as an independent public corporation. The
corporation shall be governed by a board of five directors
appointed by the Governor. Three members shall be chosen to
represent the public. Of the remaining two members, one shall be
a physician licensed to practice in this state and one shall be a
pharmacist licensed to practice in this state. Members of the
board are subject to confirmation by the Senate pursuant to
section 4, Article III of the Oregon Constitution.
(2) No member of the board of directors may have any pecuniary
interest, other than an incidental interest that is disclosed and
made a matter of public record at the time of appointment to the
board, in any corporation or other business entity engaged
directly or indirectly in the manufacture, supply or purchase of
prescription drugs.
(3) The term of office of a member is four years, but a member
serves at the pleasure of the Governor. Before the expiration of
the term of a member, the Governor shall appoint a successor. A
member is eligible for reappointment. If there is a vacancy for
any cause, the Governor shall make an appointment to become
immediately effective for the unexpired term.
(4) A member of the board of directors is not entitled to
compensation but may be reimbursed for actual and necessary
travel and other expenses incurred by a member in the performance
of the member's official duties, in the manner and amounts
provided for ORS 292.495.
(5) The board of directors shall select one of its members as
chairperson and another as vice chairperson, for such terms and
with such duties and powers as the board of directors considers
necessary for the performance of the functions of those offices.
A majority of the members of the board of directors constitutes a
quorum for the transaction of business.
(6) The board of directors shall meet at least once every three
months at a time and place determined by the board of directors.
The board shall meet at such other times and places specified by
the call of the chairperson or of a majority of the members of
the board of directors.
(7) The board of directors shall establish the policies for the
operation of the Oregon Prescription Drug Purchasing Corporation,
consistent with all applicable provisions of law.
(8) The board shall file with the Legislative Assembly and the
Governor, not later than April 15 of each year, a report covering
the activities and operations of the Oregon Prescription Drug
Purchasing Corporation for the preceding year. + }
SECTION 2. { + (1) The purpose of the Oregon Prescription Drug
Purchasing Corporation is to purchase prescription drugs in bulk
for public bodies that directly or indirectly purchase
prescription drugs.
(2) The corporation shall:
(a) Negotiate price discounts on prescription drugs with
prescription drug suppliers;
(b) Purchase prescription drugs for agencies within the
executive department that provide prescription drugs;
(c) Establish a system for distributing the prescription drugs
purchased by the corporation; and
(d) Cooperate with other states in purchasing prescription
drugs in bulk.
(3) The corporation may also purchase and distribute
prescription drugs for the following groups:
(a) Enrollees in the Medicare program who do not have
prescription drug coverage;
(b) Persons who purchase or receive health care services
through the health benefits program of the Public Employees'
Benefit Board;
(c) Any other individuals on whose behalf the state funds or
subsidizes, in whole or in part, the purchase of prescription
drugs or prescription drug coverage;
(d) Residents of Oregon with limited or no insurance coverage
for prescription drugs; and
(e) Local government bodies or special government bodies that
purchase prescription drugs, upon request, through the
corporation. + }
SECTION 3. { + (1) The Oregon Prescription Drug Purchasing
Corporation is under the direct supervision of a manager
appointed by the board of directors of the corporation. The
manager serves at the pleasure of the board of directors.
(2) The manager has such powers as are necessary to carry out
the functions of the corporation, subject to policy direction by
the board of directors.
(3) The manager may employ, terminate and supervise the
employment of such personnel as may be required in the
administration of the corporation. + }
SECTION 4. { + The Oregon Prescription Drug Purchasing
Corporation Fund is established, in the State Treasury separate
and distinct from the General Fund. Interest earned by the Oregon
Prescription Drug Purchasing Corporation Fund shall be credited
to the fund. The moneys in the Oregon Prescription Drug
Purchasing Corporation Fund are continuously appropriated to the
Oregon Prescription Drug Purchasing Corporation for the purposes
of carrying out sections 1, 2 and 3 of this 2003 Act. + }
SECTION 5. { + There is appropriated to the Oregon
Prescription Drug Purchasing Corporation, for the biennium
beginning July 1, 2003, out of the General Fund, the amount of
$___ for the purpose of carrying out sections 1, 2 and 3 of this
2003 Act. + }
SECTION 6. { + (1) As used in this section:
(a) 'Enrollee' has the meaning given that term in ORS 743.730.
(b) 'Health benefit plan' has the meaning given that term in
ORS 743.730.
(c) 'Insurer' has the meaning given that term in ORS 731.106.
(d) 'Pharmacy benefit management company' means an entity that
administers prescription drug benefits on behalf of an insurer
offering a health benefit plan by:
(A) Processing and adjudicating prescription drug claims and
issuing payments to pharmacists for prescription drugs dispensed
to enrollees;
(B) Contracting with or managing a network of pharmacies to
obtain discounted prescription drug prices and dispensing fees;
(C) Developing and managing prescription drug formularies;
(D) Negotiating discounts and rebates with pharmaceutical
manufacturers; and
(E) Developing disease management protocols and providing
disease management services to enrollees.
(2) A pharmacy benefit management company that contracts with
an insurer offering a health benefit plan must:
(a) Act solely for the benefit and interest of the health
benefit plan and the enrollees of the plan and for the purpose of
providing prescription drug benefits to enrollees;
(b) Use that degree of care, skill and diligence that is used
by a fiduciary in the same or similar circumstances; and
(c) Notify the insurer in writing of any proposed or ongoing
activity that involves a conflict of interest between the
pharmacy benefit management company and the health benefit plan
or the enrollees. + }
SECTION 7. { + 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. + }
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