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 3503
A-Engrossed
Senate Bill 875
Ordered by the the Senate June 23
Including Senate Amendments dated June 23
Sponsored by Senator MORRISETTE, Representative GREENLICK;
Senators MINNIS, SCHRADER
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.
{ + Establishes Oregon Prescription Drug Program in Oregon
Department of Administrative Services. Designates purposes and
participants of program. Prohibits state agency that implements
medical assistance program from participating. Requires
participants to apply annually to participate in program. + }
{ - Directs Oregon Department of Administrative Services to
adopt preferred drug list for state agencies that directly or
indirectly purchase prescription drugs. - } Directs Office for
Oregon Health Policy and Research to recommend preferred drug
list to department.
{ + Creates Prescription Drug Purchasing Fund.
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) 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. + }
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