First Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 05-0827.03 Jerry Barry HOUSE BILL 05-1343 HOUSE SPONSORSHIP Cloer, Coleman, Balmer, Stengel, and Todd SENATE SPONSORSHIP (None), House Committees Senate Committees Health and Human Services A BILL FOR AN ACT Concerning programs to increase access to prescribed pharmaceuticals, and, in connection therewith, creating a pharmaceutical access program and a pharmaceutical assistance program, and funding the programs through savings generated by a state maximum allowable cost program. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Requires the department of health care policy and financing ("state department") to establish a state maximum allowable cost program for prescription drugs under the state medicaid program and design the program to reduce the cost of prescription drugs under the medicaid program by 3% in 2005-06 and 3% in 2006-07. Directs that the savings generated by the program be used to administer and pay for a state pharmaceutical access program and a pharmaceutical assistance program. Directs the state department to administer, within available appropriations, a Colorado state pharmaceutical access program for persons whose family income is up to three hundred percent of the federal poverty level and who are enrolled in the medicare Part D prescription drug benefit program. Directs the state department to establish the Colorado pharmaceutical assistance program to allow eligible persons to purchase prescription drugs at a discounted rate. Specifies eligibility. Authorizes the medical services board to adopt rules relating to the program. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. (1) The general assembly hereby finds and declares: (a) The cost of prescription drugs is one aspect of the increasing cost of medicaid; (b) In November of 2004, the office of the state auditor released a performance audit of the state's medicaid drug program; (c) One of the recommendations of the audit was that the department of health care policy and financing should evaluate and implement additional prescription drug price limits; and (d) The audit found that, if Colorado had adopted state maximum allowable cost lists from Arkansas and Washington, the state would have received approximately twelve million dollars in cost savings. (2) It is the intent of the general assembly that the establishment of a state maximum allowable cost will enable the department of health care policy and financing to establish and enforce prescription drug price limits to control the costs of prescription drugs in the medicaid program. SECTION 2. 26-4-406, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read: 26-4-406. Providers - drug reimbursement - state maximum allowable reimbursement. (3) On or before January 1, 2006, the state department shall establish a state maximum allowable cost program for prescription drugs under the medical assistance program, referred to in this subsection (3) as the state MAC program. The state MAC program shall be designed to reduce the cost of prescription drugs under the medical assistance program by at least three percent during the 2005-06 state fiscal year and by three percent during the 2006-07 state fiscal year. The savings shall be used to administer and pay for the Colorado pharmaceutical patient assistance program and the Colorado pharmaceutical assistance program established pursuant to part 6 of article 1 of title 25.5, C.R.S. SECTION 3. Article 1 of title 25.5, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read: PART 6 COLORADO STATE PHARMACEUTICAL ACCESS AND COLORADO PHARMACEUTICAL ASSISTANCE PROGRAMS 25.5-1-601. Legislative declaration. (1) The general assembly finds that: (a) Uninsured and underinsured residents of Colorado pay a disproportionately greater share of their income for prescription drugs. In many cases, current drug prices have the effect of limiting residents' access to lifesaving medicines, thereby threatening their health and safety. (b) Prescription drugs are playing an increasingly important role in improving or stabilizing a person's health status and in reducing overall health care costs; (c) Additionally, the new medicare prescription drug benefit, while providing a prescription drug benefit, may still leave some patients with out-of-pocket expenses that may threaten the individual's health and safety. (2) (a) The general assembly, therefore, declares that it is necessary to provide a mechanism for uninsured and underinsured individuals to purchase lower-cost prescription drugs through the implementation of a Colorado pharmaceutical assistance program. (b) The general assembly further declares that it is in the best interest of the state to provide for a state pharmaceutical access program to complement the federal medicare Part D program and assist Coloradans who are eligible for medicare in their purchases of prescription medicines. 25.5-1-602. Colorado state pharmaceutical access program - rules. (1) Subject to available appropriation, the state department shall administer the Colorado state pharmaceutical access program, referred in this section as the "state pharmaceutical access program", for the purpose of contributing to the cost of the premium of an eligible Coloradan and, optionally, to the cost of the deductible for the Part D medicare prescription drug benefit as established in Title I of the federal "Medicare Prescription Drug, Improvement, and Modernization Act of 2003", referred to in this section as the "medicare Part D program". (2) An individual is eligible for the state pharmaceutical access program if the individual: (a) Has a family income of up to three hundred percent of the federal poverty level set annually by the United States department of health and human services and is not eligible for federal low-income assistance under the medicare Part D program; and (b) Submits proof of enrollment in a prescription drug plan under the medicare Part D program. (3) The state board shall establish by rule eligibility based upon the applicant's family income within the range provided in subsection (2) of this section. The state board may adopt rules defining income for purposes of the state pharmaceutical access program. In establishing eligibility based upon income, the state board shall take into account the amount of funding available for the program. (4) The state board shall set an amount of benefit for the premium and may set a portion of the deductible by rule based on the numbers enrolled and the available appropriations. (5) The state department shall open the enrollment of the state pharmaceutical access program at the same time as enrollment commences for the medicare Part D program. 25.5-1-603. Colorado pharmaceutical assistance program - fees - rules. (1) Subject to available appropriation, there is hereby established, in the state department, the Colorado pharmaceutical assistance program, referred to in this section as the "program". The state department may contract with one or more entities for the implementation and administration of the program. The program shall allow an eligible person to purchase prescription drugs at a discounted rate. Any rebates or discounts negotiated by a contracted entity shall be used to lower the price of the prescription drugs available to an eligible person under the program. A contracted entity may charge an annual fee to eligible persons not to exceed twenty-five dollars for the administration of the program. (2) (a) The extent and the magnitude of the program shall be determined by the state department on the basis of the calculated need of the recipient population and available funds. The state department may accept, for the purposes of carrying out this program, federal funds appropriated under any federal law relating to the furnishing of free or low-cost drugs to disadvantaged, elderly, and disabled individuals and may take action that is necessary for the purposes of carrying out that federal law. The state department may accept from any other agency of government or from any individual, group, or corporation funds that may be available to carry out this part 6. (b) The state board may adopt rules relating to the conduct of this program. (c) Participation in the program by a pharmacy or a pharmaceutical manufacturer is voluntary. (3) To be eligible for the program, an individual shall: (a) Be a resident of the state of Colorado; (b) Reside in a household with an income level less than or equal to three hundred percent of the federal poverty level as adopted by the United States department of health and human services; and (c) Either lack prescription drug coverage or provide documentation that the individual has exceeded the coverage of the individual's prescription drug benefits. SECTION 4. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.