Second Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06-0711.01 Michele Hanigsberg HOUSE BILL 06-1252 HOUSE SPONSORSHIP Frangas, and Madden SENATE SPONSORSHIP Hagedorn, House Committees Senate Committees Health and Human Services A BILL FOR AN ACT Concerning the creation of programs to maximize prescription drug discounts for Colorado citizens. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Establishes the Colorado cares Rx program ("program") in the department of public health and environment ("department") to allow an eligible person, any political subdivision of the state, and any business to purchase prescription drugs at the discounted rate negotiated by the entity administering the program. Defines the eligibility criteria for the program. Requires the department to contract with one or more entities to implement and administer the program. Creates the Colorado Rx clearinghouse ("clearinghouse") to provide access to medically necessary prescription drugs through patient assistance programs sponsored by pharmaceutical drug manufacturers, drug wholesalers, or retail pharmacies and the program. Requires the department to contract with the university of Colorado health sciences center, which in turn shall contract with a nonprofit corporation for the development, administration, and implementation of the clearinghouse. Establishes the requirements of the administering entity in developing and administering the clearinghouse and in serving rural and underserved communities. Specifies that the clearinghouse shall also provide assistance to an individual in obtaining medicare prescription drug benefits for which the individual is eligible. Prohibits the clearinghouse from purchasing prescription drugs for individuals eligible for clearinghouse services. Requires the departments of public health and environment, health care policy and financing, human services, and corrections to maximize prescription drug discounts within the programs administered by the departments through the utilization of the federal 340B drug pricing program in order to receive the maximum state budget savings. Authorizes and encourages a human services referral service provider to provide referral information regarding the clearinghouse. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Title 25, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW ARTICLE to read: ARTICLE 36 Prescription Drug Programs PART 1 THE COLORADO CARES PRESCRIPTION DRUG PROGRAM 25-36-101. Short title. This part 1 shall be known and may be cited as "Colorado Cares Rx". 25-36-102. Legislative declaration. (1) The general assembly finds that: (a) Uninsured, underinsured, and older Coloradans 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 play 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 persons from insuring themselves in order to fully cover their prescription drug needs. This restriction on a person's ability to purchase adequate coverage may threaten the person's health and safety. (2) The general assembly, therefore, declares that it is necessary to provide a mechanism for persons to purchase lower-cost prescription drugs through the implementation of "Colorado Cares Rx" in order to protect the health status of uninsured, underinsured, and older Coloradans. 25-36-103. Definitions. As used in this part 1, unless the context otherwise requires: (1) "Department" means the department of public health and environment. (2) "Eligible entity" means a city, county, city and county, or political subdivision of the state of Colorado or a business entity that is authorized to conduct and is conducting business in the state of Colorado. (3) "Eligible person" means a person who: (a) Is a resident of the state of Colorado; and (b) Is not eligible for medical assistance pursuant to article 4 of title 26, C.R.S., or the children's basic health plan pursuant to article 19 of title 26, C.R.S. (4) "Program" means Colorado cares Rx. 25-36-104. Program. (1) (a) There is hereby established the Colorado cares Rx program in the department. The department shall contract with one or more entities capable of implementing and administering the prescription drug benefits under the program. A contracted entity may utilize one or more of the following: (I) A multistate drug-purchasing agreement that does not include prescription drug purchases for the state's medical assistance program, article 4 of title 26, C.R.S.; (II) Contracts for negotiated prescription drug prices with prescription drug manufacturers, wholesalers, and retailers; (III) Any other method for lawfully obtaining lower-cost prescription drugs for eligible persons. (b) An eligible person or eligible entity may purchase prescription drugs from a contracted entity at a discounted price negotiated by the contracted entity. Any rebates negotiated by the contracted entity shall be used to lower the prices of the prescription drugs available to an eligible person or an eligible entity under the program. The contracted entity is authorized to charge an annual administrative fee not to exceed twenty-five dollars to eligible persons, to charge an annual administrative fee to eligible entities, and to determine the amount of any dispensing fees under the program. 25-36-105. Report. On or before July 1, 2007, the department shall report to the joint budget committee of the general assembly on the implementation of the requirements of this part 1. PART 2 PHARMACEUTICAL CLEARINGHOUSE 25-36-201. Definitions. As used in this part 2, unless the context otherwise requires: (1) "Department" means the department of public health and environment. (2) "State board" means the state board of health. 25-36-202. Pharmaceutical clearinghouse - administration - rules - report. (1) Beginning January 1, 2007, there is hereby created the Colorado Rx clearinghouse, referred to in this section as the "clearinghouse", to improve the health status of Coloradans who lack prescription drug coverage by providing access to medically necessary prescription drugs through: (a) Patient assistance programs sponsored by pharmaceutical drug manufacturers, drug wholesalers, or retail pharmacies; and (b) The Colorado cares Rx program established in part 1 of this article. (2) (a) The department shall enter into an agreement with the university of Colorado health sciences center, which in turn shall contract with a nonprofit corporation or corporations to develop, administer, and implement the clearinghouse. The administering entity selected shall serve rural and underserved communities and minority populations and shall have as its mission to improve the quality and accessibility of education for Colorado health care personnel in order to enhance the delivery of health care services throughout the state. (b) In developing and administering the clearinghouse, the administering entity shall: (I) Utilize an information system covering patient assistance programs that includes available databases related to such information; (II) Provide outreach and educational programs to the health care community about the clearinghouse; and (III) Track and evaluate the operations of the clearinghouse, including, at a minimum, determining the number of persons served by the clearinghouse and the savings derived from using the clearinghouse. (3) (a) The clearinghouse shall provide the following services: (I) Determine the patient assistance programs for which a person may be eligible based on the criteria established for each program by the pharmaceutical drug manufacturer, drug wholesaler, or retail pharmacy; (II) Inform the person of the names of the local pharmacies that administer the programs for which the person may be eligible; (III) Determine whether the person is eligible for the Colorado cares Rx program established in part 1 of this article; and (IV) Assist the person in obtaining medicare prescription drug benefits for which the person is eligible. (b) A person shall be eligible for the clearinghouse services only if the person is not eligible for medical assistance pursuant to article 4 of title 26, C.R.S., or the children's basic health plan pursuant to article 19 of title 26, C.R.S. (c) The clearinghouse shall not purchase prescription drugs for persons eligible for clearinghouse services. (4) The state board may promulgate any rules necessary for the implementation of the clearinghouse. (5) The department may accept gifts, grants, and donations for the administration of this part 2. Any gifts, grants, or donations received by the department shall be transmitted to the state treasurer, who shall credit the same to the Colorado Rx clearinghouse cash fund, which is hereby established and referred to in this section as the "fund". Moneys in the fund shall be annually appropriated by the general assembly for the direct and indirect costs of implementing this part 2. Any moneys in the fund not expended for the purpose of this part 2 may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of moneys in the fund shall be credited to the fund. Any moneys remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be transferred to the general fund or any other fund. SECTION 2. Part 1 of article 1 of title 25, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 25-1-126. Department - prescription drug discounts - federal 340B drug pricing program. The department shall maximize prescription drug discounts within the programs administered by the department through the use of the federal 340B drug pricing program pursuant to 42 U.S.C. sec. 256b to produce maximum state budget savings, except when a prescription drug may be purchased at a lower price. SECTION 3. Part 1 of article 1 of title 25.5, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 25.5-1-114. State department - prescription drug discounts - federal 340B drug pricing program. The state department shall maximize prescription drug discounts within the programs administered by the state department through the use of the federal 340B drug pricing program pursuant to 42 U.S.C. sec. 256b to produce maximum state budget savings, except when a prescription drug may be purchased at a lower price. SECTION 4. Part 1 of article 1 of title 26, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 26-1-134. State department - prescription drug discounts - federal 340B drug pricing program. The state department shall maximize prescription drug discounts within the programs administered by the state department through the use of the federal 340B drug pricing program pursuant to 42 U.S.C. sec. 256b to produce maximum state budget savings, except when a prescription drug may be purchased at a lower price. SECTION 5. Part 1 of article 1 of title 17, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 17-1-103.3. Executive director - prescription drug discounts - federal 340B drug pricing program. The executive director shall maximize prescription drug discounts within the programs administered by the executive director through the use of the federal 340B drug pricing program pursuant to 42 U.S.C. sec. 256b to produce maximum state budget savings, except when a prescription drug may be purchased at a lower price. SECTION 6. Part 2 of article 11 of title 29, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 29-11-204. Human services referral service - pharmaceutical programs - information. In addition to any authority conferred by law, a human services referral service provider is authorized and encouraged to provide referral information regarding the pharmaceutical clearinghouse created in part 2 of article 36 of title 25, C.R.S. SECTION 7. 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.