72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
 
SA to SB 875
 
LC 3503/SB 875-8
 
                      SENATE AMENDMENTS TO
                         SENATE BILL 875
 
                  By COMMITTEE ON HEALTH POLICY
 
                             June 23
 
  In line 2 of the printed bill, before the period insert ';
appropriating money; and declaring an emergency'.
  Delete lines 4 through 17 and insert:
  '  { +  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 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 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 $___ for the
purpose of carrying out sections 1 to 4 of this 2003 Act. + }
  '  { +  SECTION 7. + }  { + Not later than September 30, 2004,
the Oregon Department of Administrative Services shall report to
the appropriate interim legislative committee on the
implementation of the Oregon Prescription Drug Program, including
but not limited to:
  ' (1) The number of individuals and entities enrolled in the
program and the number of persons for whom the department is
purchasing prescription drugs;
  ' (2) How participation in the program has affected
prescription drug prices for participants;
  ' (3) The rules adopted by the department to implement the
program;
  ' (4) The feasibility and advisability of expanding the
program; and
  ' (5) A plan to expand the program if the department determines
that expansion is feasible and advisable. + }
  '  { +  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. + } ' .
                         ----------