HOUSE Amended 2nd Reading May 4, 2005 SENATE Amended 3rd Reading May 3, 2005 SENATE Amended 2nd Reading May 2, 2005First Regular Session Sixty-fifth General Assembly STATE OF COLORADO REVISED This Version Includes All Amendments Adopted on Second Reading in the Second House LLS NO. 05-0178.01 Michele Hanigsberg SENATE BILL 05-102 SENATE SPONSORSHIP Hagedorn, Fitz-Gerald, Groff, Grossman, Hanna, Johnson, Kester, Sandoval, Shaffer, Takis, Tochtrop, Williams, and Windels HOUSE SPONSORSHIP Madden, Buescher, Butcher, Cerbo, Green, and Pommer Senate Committees House Committees Health and Human Services Health and Human Services Appropriations Appropriations A BILL FOR AN ACT Concerning multistate prescription drug purchasing, and making an appropriation. 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 ("department") to apply for the necessary federal authorization to enter into a multistate drug purchasing pool ("purchasing pool") for the benefit of the state's medicaid recipients. Requires the department to contract, through a competitive bidding process, with one or more entities for purposes of the purchasing pool. Requires the medical services board to promulgate rules that establish a preferred drug list that meets the federal requirements for allowing the state to enter into a multistate drug purchasing pool for medicaid recipients unless a bill establishing a preferred drug list is enacted in the first regular session of the 65th general assembly and becomes law. Sets out a time line for the implementation of the purchasing pool. Contains a reporting requirement. Establishes Colorado cares Rx ("program") in the department to allow an eligible person to purchase prescription drugs at the discounted rate the state's medical assistance program is able to obtain for the prescription drugs through the purchasing pool. Defines the eligibility criteria for the program. Requires the department's contract with one or more entities to implement and administer the program. Allows a state agency to enter into a multistate purchasing agreement for the purchase of prescription drugs if the multistate purchasing agreement would allow the state agency to realize savings in a program that the agency administers. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Part 1 of article 1 of title 25.5, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 25.5-1-113. Multistate prescription drug purchasing pool - federal authorization - contracting - implementation - rules - repeal. (1) (a) The general assembly finds that: (I) The state of Colorado pays a substantial amount for prescription drugs under the state's medicaid program. This expenditure is one of the fastest growing obligations in the state's medicaid program. (II) Every year there has been an increase in the state's medicaid enrollment and this increase has multiplied in times of economic decline. (III) The ever-increasing costs of providing prescription drugs to medicaid recipients coupled with the state's revenue restrictions demand that the state attempt to decrease expenditures through available discounts wherever possible. (b) The general assembly, therefore, declares that it is in the best interests of the state to join a multistate prescription drug purchasing pool to obtain prescription drugs for medicaid recipients at the lowest possible cost. (2) As used in this section, unless the context otherwise requires, "biological products or biologics" means a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, analogous product, or arsphenamine, a derivative of arsphenamine, or any other trivalent organic arsenic compound, applicable to the prevention, treatment, or cure of a disease or condition of human beings. (3) The state department shall apply for the necessary federal authorization to enter into a multistate prescription drug purchasing pool for the benefit of the state's medicaid recipients. (4) The state department shall contract, through a competitive bidding process, with one or more entities capable of administering a preferred drug list and a supplemental rebate program in order to combine the purchasing power of the state's medical assistance program with other states' medicaid programs to obtain prescription drugs at discounted rates. The state department shall have the contract in place on or before February 1, 2006. (5) (a) (I) In addition to the rule-making authority granted in section 25.5-1-108, the executive director shall promulgate rules to establish a preferred drug list that meets the federal requirements for allowing the state to enter into a multistate prescription drug purchasing pool for medicaid recipients. (II) Any preferred drug list established pursuant to paragraph (a) of this subsection (5) shall exempt from the prior authorization process: (A) Antiretroviral medications for AIDS or HIV; (B) Medications for the treatment of biologically based mental illness as defined in section 10-16-104 (5.5), C.R.S.; (C) Biologics, including treatments for cancer and cancer-supportive care and dialysis and dialysis-supportive care; (D) All medications, without restriction, for the treatment of mental illness; (E) Medications for the treatment of cardiovascular disease. (III) The executive director shall consider the differences in drug metabolism in minority populations when considering which drugs to include on the preferred drug list and which drugs to exempt from the prior authorization process. (IV) The state department shall have one or more public meetings during the rule-making process required by this subsection (5). (b) If a bill establishing a preferred drug list is enacted at the first regular session of the sixty-fifth general assembly and becomes law, this subsection (5) is repealed. (6) The state department may purchase prescription drugs outside of any multistate purchasing agreement authorized by this section if the state department is able to purchase the prescription drugs for a lower price than is available under the multistate purchasing agreement. (7) On or before July 1, 2006, the state department shall report to the joint budget committee of the general assembly on the implementation of the requirements of this section. SECTION 2. Appropriation. (1) In addition to any other appropriation, there is hereby appropriated, to the department of health care policy and financing, executive director's office, for the fiscal year beginning July 1, 2005, the sum of three hundred seven thousand three hundred seventy-six dollars ($307,376) and 1.0 FTE, or so much thereof as may be necessary, for the implementation of this act. Of said sum, one hundred fifty-three thousand six hundred eighty-eight dollars ($153,688) shall be from the general fund and one hundred fifty-three thousand six hundred eighty-eight dollars ($153,688) shall be from federal funds. (2) It is the intent of the general assembly that the general fund appropriation in subsection (1) of this section shall be derived from savings generated from the implementation of the provisions of House Bill 05-1243, as enacted during the First Regular Session of the Sixty-fifth General Assembly. SECTION 3. Effective date. (1) This act shall take effect upon passage only if: (a) House Bill 05-1243 is enacted at the First Regular Session of the Sixty-Fifth General Assembly and becomes law; and (b) The final fiscal estimate for House Bill 05-1243, as determined from the appropriations enacted in said bill, shows a net reduction in the amount of general fund revenues appropriated for the state fiscal year 2005-06, that is equal to or greater than the amount of the general fund appropriation made for the implementation of this act for the state fiscal year 2005-06, as reflected in section 2 of this act; and (c) The staff director of the joint budget committee files written notice with the revisor of statutes no later than July 15, 2005, that the requirement set forth in paragraph (b) of this subsection (1) has been met. 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.