Print Friendly SENATE BILL NO. 1089 – Idaho Prescription Drug Program
SENATE BILL NO. 1089
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S1089.................................................by HEALTH AND WELFARE
IDAHO PRESCRIPTION DRUG PROGRAM - Adds to existing law to establish the
Idaho Prescription Drug Program; to set program goals; to define terms; to
provide for rebate agreements; to set forth rebate amounts; to provide for
discounted prices for qualified applicants; to provide for operation of the
program; to provide for action regarding nonparticipating manufacturers and
labelers; to establish a dedicated fund; to provide for annual summary
reports; to set forth duties of the department; to provide for third-party
contracting; to provide for the coordination of medical assistance
programs; to authorize rules; and to authorize the Department of Health and
Welfare to seek necessary federal waivers.
02/03 Senate intro - 1st rdg - to printing
02/04 Rpt prt - to Health/Wel
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE SENATE
SENATE BILL NO. 1089
BY HEALTH AND WELFARE COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO PRESCRIPTION DRUG PROGRAM; AMENDING TITLE 56, IDAHO
3 CODE, BY THE ADDITION OF A NEW CHAPTER 14, TITLE 56, IDAHO CODE, TO ESTAB-
4 LISH THE IDAHO PRESCRIPTION DRUG PROGRAM, TO SET PROGRAM GOALS, TO DEFINE
5 TERMS, TO PROVIDE FOR REBATE AGREEMENTS, TO SET FORTH REBATE AMOUNTS, TO
6 PROVIDE FOR DISCOUNTED PRICES FOR QUALIFIED APPLICANTS, TO PROVIDE FOR
7 OPERATION OF THE PROGRAM, TO PROVIDE FOR ACTION REGARDING NONPARTICIPATING
8 MANUFACTURERS AND LABELERS, TO ESTABLISH A DEDICATED FUND, TO PROVIDE FOR
9 ANNUAL SUMMARY REPORTS, TO SET FORTH DUTIES OF THE DEPARTMENT, TO PROVIDE
10 FOR THIRD-PARTY CONTRACTING, TO PROVIDE FOR THE COORDINATION OF MEDICAL
11 ASSISTANCE PROGRAMS, TO AUTHORIZE RULES AND TO AUTHORIZE THE DEPARTMENT TO
12 SEEK NECESSARY FEDERAL WAIVERS.
13 Be It Enacted by the Legislature of the State of Idaho:
14 SECTION 1. That Title 56, Idaho Code, be, and the same is hereby amended
15 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
16 ter 14, Title 56, Idaho Code, and to read as follows:
17 CHAPTER 14
18 IDAHO PRESCRIPTION DRUG PROGRAM
19 56-1401. PROGRAM ESTABLISHMENT. The "Idaho Prescription Drug Program
20 (Affordable Rx Idaho)," referred to in this chapter as the "program," is
21 hereby established to reduce prescription drug prices for low-income residents
22 and to improve the quality of health care for residents of the state. The pro-
23 gram shall be administered by the department of health and welfare and shall
24 utilize manufacturer rebates and pharmacy discounts to reduce prescription
25 drug prices.
26 56-1402. PROGRAM GOALS. The legislature finds that affordability is crit-
27 ical in providing access to prescription drugs for Idaho residents. This chap-
28 ter is enacted by the legislature to enable the state to take steps to make
29 prescription drugs more affordable for qualified low-income Idaho residents,
30 thereby increasing the overall health of Idaho residents, promoting healthy
31 communities and protecting the public health and welfare, and to integrate the
32 program as part of any statewide program for the uninsured. It is not the
33 intention of the legislature to discourage employers from offering or paying
34 for prescription drug benefits for their employees or to replace employer-
35 sponsored prescription drug benefit plans that provide benefits comparable to
36 those made available to qualified low-income Idaho residents under this chap-
38 56-1403. DEFINITIONS. As used in this chapter, unless the context other-
39 wise indicates, the following terms have the following meanings:
40 (1) "Average wholesale price" means the wholesale price charged on a spe-
1 cific commodity that is assigned by the drug manufacturer and is listed in a
2 nationally recognized drug pricing file.
3 (2) "Covered drugs" means drugs that are included in the Idaho medicaid
4 enhanced prior authorization program established and revised by the department
5 pursuant to its authority to operate the Idaho medicaid pharmacy benefit man-
6 agement program.
7 (3) "Department" means the Idaho department of health and welfare.
8 (4) "Director" means the director of the Idaho department of health and
10 (5) "Initial discounted price" for a drug means the price, including any
11 dispensing fee, the department pays Idaho medicaid participating retail phar-
12 macies for that drug for Idaho medicaid members.
13 (6) "Labeler" means an entity or person that receives prescription drugs
14 from a manufacturer or wholesaler and repackages those drugs for later retail
15 sale and that has a labeler code from the federal food and drug administra-
17 (7) "Participating retail pharmacy" or "retail pharmacy" means a retail
18 pharmacy located in Idaho, or another business licensed to dispense prescrip-
19 tion drugs in Idaho, that participates in the program.
20 (8) "Qualified applicant" means a resident of this state:
21 (a) Who has an individual or family income equal to or less than two hun-
22 dred fifty percent (250%) of the federal poverty level; and
23 (b) Who is not covered or has not voluntarily terminated coverage in a
24 health care insurance prescription drug benefit plan within ninety (90)
25 days prior to submitting the program application.
26 (9) "Secondary discounted price" means the initial discounted price minus
27 any further discounts paid for out of the fund by the department to the par-
28 ticipating retail pharmacy.
29 56-1404. REBATE AGREEMENT. A drug manufacturer or labeler that sells pre-
30 scription drugs in this state through a publicly supported pharmaceutical
31 assistance program shall enter into negotiations for a rebate agreement with
32 the department for the program established in this chapter. The rebate agree-
33 ment shall require the manufacturer or labeler to make rebate payments to the
34 state each calendar quarter or according to a schedule established by the
36 56-1405. REBATE AMOUNT. (1) The director shall negotiate the amount of
37 the rebate required from a manufacturer or labeler in accordance with this
39 (2) The director shall take into consideration the rebate calculated
40 under the medicaid rebate program pursuant to 42 U.S.C. section 1396r-8, the
41 average wholesale price of prescription drugs, and any other information on
42 prescription drug prices and price discounts.
43 (3) The director shall use the director's best efforts to obtain an ini-
44 tial rebate amount equal to or greater than the rebate calculated under the
45 Idaho medicaid program pursuant to 42 U.S.C. section 1396r-8.
46 (4) With respect to the rebate taking effect no later than January 1,
47 2008, the director shall use the director's best efforts to obtain an amount
48 equal to or greater than the amount of any discount, rebate or price reduction
49 for prescription drugs provided to the state of Idaho or the federal govern-
51 56-1406. DISCOUNTED PRICES FOR QUALIFIED APPLICANTS. (1) Each participat-
52 ing retail pharmacy shall sell covered drugs to qualified applicants at the
1 lower of the initial discounted price and the secondary discounted price as
2 such prices are determined by the department pursuant to this subsection.
3 (2) The department shall establish discounted prices for drugs covered by
4 a rebate agreement and shall promote the use of therapeutically interchange-
5 able and reduced-cost drugs, taking into consideration reduced prices for
6 state and federally capped drug programs, dispensing fees, administrative
7 overhead and incentive payments.
8 (3) Beginning January 1, 2008, a participating retail pharmacy shall
9 offer the initial discounted price and the secondary discounted price, if
11 (4) The department shall have the authority to require a qualified appli-
12 cant to pay a program application fee not to exceed ten dollars ($10.00) for
13 each individual applicant and fifteen dollars ($15.00) for each application
14 that includes a spouse and/or minor child.
15 56-1407. OPERATION OF PROGRAM. (1) The requirements of this section apply
16 to participating retail pharmacies.
17 (2) The department shall not impose transaction charges under the program
18 on retail pharmacies that submit claims or receive payments under the program.
19 (3) A participating retail pharmacy shall submit claims to the department
20 to verify the amount charged to qualified applicants under section 56-1406,
21 Idaho Code.
22 (4) On a weekly or biweekly basis, the department shall reimburse a par-
23 ticipating retail pharmacy for the difference between the initial discounted
24 price and the secondary discounted price provided to qualified applicants
25 under section 56-1406, Idaho Code.
26 (5) The department shall conduct ongoing quality assurance activities
27 similar to those used in the Idaho medicaid program.
28 56-1408. ACTION WITH REGARD TO NONPARTICIPATING MANUFACTURERS AND
29 LABELERS. The names of manufacturers and labelers who do and do not enter into
30 rebate agreements pursuant to this chapter are public information. The depart-
31 ment shall release this information to health care providers and the public on
32 a regular basis and shall publicize participation by manufacturers and
33 labelers that is of particular benefit to the public.
34 56-1409. DEDICATED FUND. The "Idaho Prescription Drug Program (Affordable
35 Rx Idaho) Dedicated Fund," referred to in this chapter as the "fund," is
36 hereby established to receive revenue from manufacturers and labelers who pay
37 rebates as provided in section 56-1405, Idaho Code, and any appropriations or
38 allocations designated for the fund. The purposes of the fund are to reimburse
39 retail pharmacies for discounted prices provided to qualified applicants pur-
40 suant to section 56-1406, Idaho Code, and to reimburse the department for con-
41 tracted services including pharmacy claims processing fees, administrative
42 costs, and other reasonable program costs. The fund is a nonlapsing dedicated
43 fund. Interest on fund balances accrues to the fund. Surplus funds in the fund
44 must be used for the benefit of the program.
45 56-1410. ANNUAL SUMMARY REPORT. The department shall report the enroll-
46 ment and financial status of the program to the legislature by the second week
47 in January of each year.
48 56-1411. DUTIES OF THE DEPARTMENT. The department shall establish simpli-
49 fied procedures for determining eligibility and issuing Idaho prescription
50 drug program (Affordable Rx Idaho) enrollment cards to qualified applicants
1 and shall undertake outreach efforts to build public awareness of the program
2 and maximize enrollment of qualified applicants. The department may adopt and
3 implement the prior authorization requirements of the Idaho medicaid program,
4 as permitted by law, to the extent the department determines it is appropriate
5 to do so in order to encourage manufacturer and labeler participation in the
6 program. The department may adjust the requirements and terms of the program
7 to accommodate any new federally funded prescription drug programs.
8 56-1412. CONTRACTING. The department may contract with a third party or
9 parties to administer any or all components of the program including, but not
10 limited to, outreach, eligibility, claims, administration, and rebate recovery
11 and redistribution.
12 56-1413. MEDICAL ASSISTANCE PROGRAMS. The department shall administer the
13 program in a manner that is advantageous to the program and to the enrollees
14 in the program. In implementing this chapter the department may coordinate
15 this program with any other program and may take actions to enhance effi-
16 ciency, reduce the cost of prescription drugs and maximize the benefits to the
17 programs and enrollees, including providing the benefits of this program to
18 enrollees in other programs.
19 56-1414. RULES. The department may adopt rules to implement the provi-
20 sions of this chapter in accordance with the provisions of the Idaho adminis-
21 trative procedure act.
22 56-1415. WAIVERS. The department may seek any waivers of federal law,
23 rule or regulation necessary to implement the provisions of this chapter.
STATEMENT OF PURPOSE
This legislation creates a prescription purchase program
known as Affordable Rx Idaho. This program is available to
Idaho residents, who do not qualify for Medicaid, and who have
an income level equal to or less that 250% of federal poverty
level. It does not apply to Idaho residents who are currently
covered by a health insurance prescription drug benefit plan
or who have voluntarily terminated coverage from such a plan
within 90 days of application for the Affordable Rx Idaho
The applicant will be required to pay for prescription
medications but will be able to purchase the medications at a
reduced price. This program should reduce the utilization of
visits to the hospital emergency rooms and utilization of
other more costly health care resources for this part of
This legislation would be implemented in two phases. The
first phase would begin January 1, 2007 (fiscal year 2007).
The second phase would begin July 1, 2007 (fiscal year 2008).
The projected cost of the program for fiscal year 2007 would
be $475,000. The projected cost for fiscal year 2008 would be
The program cost for the first year ($475,000 – fiscal
year 2007) would be offset by revenues from the application
fees received in the projected sum of $300,000(30,000
applications at $10 each equals $300,000). This would result
in a net fiscal impact to the State of $175,000 for fiscal
The cost of the program in fiscal year 2008 would be
covered by both the application fees and manufacturer rebates
recovered by the Department of Health and Welfare in the
operation of the program. The fiscal impact is based upon the
experience of similar prescription purchase programs in other
Contact: Steve J. Tobiason, #342-4545
Joe Gallegos, AARP, #855-4005
STATEMENT OF PURPOSE/FISCAL NOTE S 1089