FISCAL NOTE

Date Requested: January 17, 2019
Time Requested: 04:09 PM
Agency: Health and Human Resources, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
2040 Introduced HB2428
CBD Subject: Health


FUND(S):

0403 - DIV OF HUMAN SERVICES GENERAL ADMINISTRATION FUND; 8722 - CONS FEDERAL FUNDS DIV HUMAN SERVICES GEN ADMN FD

Sources of Revenue:

General Fund

Legislation creates:





Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The purpose of this bill is to permit the state to designate a state agency to become a drug wholesaler to import pharmaceuticals from Canada to provide cheaper drugs to West Virginians. The Department believes there will be extensive costs with the requirements of this bill such as becoming wholesaler, contracting with distributors, meeting with different groups, outreach, operating hotline, conducting audits, reporting, testing of the imported drugs for purity and potency, and other activities deemed necessary. However the Department cannot reasonably quantify those amounts at this time as several of the requirements do not meet prescription guidelines for purchase or distribution, or are unclear.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2019
Increase/Decrease
(use"-")
2020
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):






Memorandum


1. While the bill requires the Department to contract with only Canadian suppliers for the drug importation program, the bill does not have a requirement for rebates from the Canadian supplier which are required per Section 5A-3-1a of the West Virginia Code. 2. Section 16-53-1 of the bill requires the Bureau for Medical Services to import drugs from licensed, regulated Canadian supplier. This requirement would require contacting pharmaceutical suppliers in the country as this would be non-competitive. 3. The bill requires certification and approval by the United States Department of Health and Human Services (USDHHS) before implementing the program. It is uncertain that USDHHS would approve such a program as the drugs would not be FDA approved. If the program is not approved, there would be no Federal participation. 4. Purchasing drugs from Canada would mean distributing drugs in the state without a thorough review of the manufacturer and supply chain. While the drugs would be regulated by Canadian law, ensuring quality, performance, safety, or potency would be unlikely. 5. The bill requires wholesalers to bill health plans, however wholesalers distribute to pharmacies and not health plans and are not licensed to distribute to patients. Unlikely wholesalers would distribute to pharmacies at no charge.



    Person submitting Fiscal Note: Bill J. Crouch
    Email Address: Bill.J.Crouch@wv.gov