First Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED 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 A BILL FOR AN ACT Concerning multistate prescription drug purchasing, and, in connection therewith, establishing the Colorado cares prescription drug 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 ("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 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 state's best interests to join a multistate prescription drug purchasing pool to obtain prescription drugs for medicaid recipients at the lowest possible cost. (2) The state department shall apply for the necessary federal authorization to enter into a multistate drug purchasing pool for the benefit of the state's medicaid recipients. (3) 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. (4) (a) In addition to the rule-making authority granted in section 25.5-1-108, the executive director shall 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. The state department shall have one or more public meetings during the rule-making process required by this section. (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 (4) is repealed. (5) 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. Article 1 of title 25.5, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read: PART 4 THE COLORADO CARES PRESCRIPTION DRUG PROGRAM 25.5-1-401. Short title. This part 4 shall be known and may be cited as "Colorado Cares Rx". 25.5-1-402. 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 denying residents access to necessary medical care, 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 prohibits people from insuring themselves in order to fully cover their prescription drug needs. This restriction on an individual's ability to purchase adequate coverage may threaten the individual's health and safety. (2) The general assembly, therefore, declares that it is necessary to provide a mechanism for individuals to purchase lower-cost prescription drugs through the implementation of Colorado cares Rx in order to protect the health status of uninsured and underinsured individuals and older Coloradans. 25.5-1-403. Definitions. As used in this part 4, unless the context otherwise requires: (1) "Eligible person" means a person who: (a) Is a resident of the state of Colorado; (b) Is at or below three hundred fifty percent of the federal poverty level; and (c) Does not have all of his or her prescription drugs paid for through health insurance. (2) "Program" means Colorado cares Rx. 25.5-1-404. Program. (1) There is hereby established the Colorado cares Rx program in the state department. The state department shall contract with one or more entities capable of administering a preferred drug list and a supplemental rebate program for the implementation and administration of the program. The program shall 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 multistate drug purchasing pool authorized by section 25.5-1-113. A contracted entity may charge an annual fee to eligible persons not to exceed twenty-five dollars for the administration of the program. (2) The state department shall apply for the necessary federal authorization to implement the program. 25.5-1-405. Report. 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 part 4. SECTION 3. Article 60 of title 24, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PART to read: PART 31 MULTISTATE PRESCRIPTION DRUG PURCHASING AGREEMENTS 24-60-3101. Multistate prescription drug purchasing - authorization. A state agency may 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. 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.