COMMITTEE SUBSTITUTE
FOR
H. B. 3164
(By Mr. Speaker, Mr. Thompson, and Delegate Armstead)
[By Request of the Executive]
(Originating in the Committee on Finance)
[February 23, 2007]
A BILL to repeal §5-16-7b of the Code of West Virginia, 1931, as
amended;
to repeal §5-16C-1, §5-16C-2, §5-16C-3, §5-16C-4,
§5-16C-5, §5-16C-6, §5-16C-7, §5-16C-8, §5-16C-9, and
§5-16C-10 of said code;
to repeal §5A-3-1a of said code;
to
repeal §5A-3C-1, §5A-3C-2, §5A-3C-3, §5A-3C-4, §5A-3C-5,
§5A-3C-6, §5A-3C-7, §5A-3C-8, §5A-3C-9, §5A-3C-10, §5A-3C-11,
§5A-3C-12, §5A-3C-13, §5A-3C-14, §5A-3C-15, §5A-3C-16 and
§5A-3C-17 of said code;
and to amend said code by adding
thereto a new article, designated §16-43-1, §16-43-2, §16-43-
3, §16-43-4, §16-43-5, §16-43-6, §16-43-7, §16-43-8, §16-43-9,
§16-43-10, §16-43-11, §16-43-12, §16-43-13, §16-43-14, §16-43-
15, §16-43-16, §16-43-17 and §16-43-18, all relating generally
to pharmaceutical availability and affordability; legislative
findings; defining certain terms; creating the position of the
Pharmaceutical Advocate
; continuing the West Virginia
Pharmaceutical Cost Management Council; establishing powers
and duties; exempting the Pharmaceutical Advocate from state purchasing requirements; authorizing the Pharmaceutical
Advocate to take advantage of acts of Congress, accept gifts,
grants and matching funds; continuing interim agency
management ability; requiring manufacturers and labelers to
report certain marketing, advertising, and promotional costs
to the Pharmaceutical Advocate; requiring participation by all
state agencies who are payors for prescription drugs;
providing authority for the secretary of each department to
cooperate with the Pharmaceutical Advocate in the purchase of
prescription drugs; authorizing the Pharmaceutical Advocate to
establish programs permitting participation in a preferred
drug list by private individuals, commercial insurance
carriers and self-insured companies; providing some
protections for pharmacists; establishing criminal and civil
penalties for restraint of trade and providing for rule-making
authority.
Be it enacted by the Legislature of West Virginia:
That §5-16-7b of the Code of West Virginia, 1931, as amended,
be repealed; that §5-16C-1, §5-16C-2, §5-16C-3, §5-16C-4, §5-16C-5,
§5-16C-6, §5-16C-7, §5-16C-8, §5-16C-9, and §5-16C-10 of said code
be repealed;
that
§5A-3-1a of said code be repealed;
that
§5A-3C-1, §5A-3C-2, §5A-3C-3, §5A-3C-4, §5A-3C-5, §5A-3C-6,
§5A-3C-7, §5A-3C-8, §5A-3C-9, §5A-3C-10, §5A-3C-11, §5A-3C-12,
§5A-3C-13, §5A-3C-14, §5A-3C-15, §5A-3C-16 and §5A-3C-17 of said
code be repealed;
and that said code be amended by adding thereto
a new article, designated §16-43-1, §16-43-2, §16-43-3, §16-43-4, §16-43-5, §16-43-6, §16-43-7, §16-43-8, §16-43-9, §16-43-10, §16-
43-11, §16-43-12, §16-43-13, §16-43-14, §16-43-15, §16-43-16, §16-
43-17,
and §16-43-18 all to read as follows:
ARTICLE 3C. PHARMACEUTICAL AVAILABILITY AND AFFORDABILITY ACT OF
2007.
§16-43-1. Title.
The provisions of this article shall be known as and referred
to as the "Pharmaceutical Availability and Affordability Act of
2007."
§16-43-2. Legislative findings and declarations.
The Legislature hereby finds and declares:
(1) That the rising cost of prescription drugs is one of the
most critical issues facing the current health care system in the
State of West Virginia;
(2) That these rising costs have imposed a significant
hardship on those individuals who have limited budgets, are
uninsured, or who have prescription coverage that is unable to
effectively control costs;
(3) That the average cost per prescription for seniors rose
significantly between one thousand nine hundred ninety-two and two
thousand seven, and is expected to continue to increase
significantly at least through two thousand ten;
(4) That State government agencies could achieve significant
savings through the coordinated purchase of prescription drugs;
(5) That there is an increasing need for the citizens of West Virginia to have affordable access to prescription drugs;
(6) That in two thousand four, the Legislature established the
Pharmaceutical Cost Management Council and directed the Council to
recommend measures to decrease the rising costs of prescription
drugs;
(7) That the Pharmaceutical Cost Management Council
subsequently recommended that the position of Pharmaceutical
Advocate be created to coordinate all Executive Branch entities'
activities, practices, and policies relating to prescription drugs;
(8) That pursuant to Executive Order No. 18-04, the position
of Pharmaceutical Advocate was created within the Office of the
Governor;
(9) That a number of recent federal and state initiatives also
have attempted to address the rising costs of pharmaceutical drugs
and increase the accessibility of citizens to such vital drugs,
including:
(A) the expansion of primary care clinics offering
pharmaceuticals under a 340b Drug Pricing Program pursuant to the
Veterans Health Care Act of 1992, Pub. L. No. 102-585, 106 Stat.
4943 (1992);
(B) the creation of the Medicaid Preferred Drug List pursuant
to section fifteen, article five, chapter nine of this code;
(C) the enactment of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Pub. L. No. 108-173,
117 Stat. 2066 (2003);
(D) the consolidation of certain prescription drug purchasing agreements between state agencies; and
(E) the Public Employees Insurance Agency's development of a
340b Drug Pricing Program pilot project; and
(9) That in addition to any savings that may be realized by
such recent initiatives, the Legislature's attempt to lower the
cost of prescription drugs would be furthered by codifying the
position of Pharmaceutical Advocate and investing said position
with certain statutory powers originally granted the Pharmaceutical
Cost Management Council and the Public Employees Insurance Agency,
thereby creating a single, identifiable leader in the State's
effort to bring affordable prescription drugs to her people.
§16-43-3. Definitions.
In this article:
(1) "Drug manufacturer" or "pharmaceutical manufacturer" means
an entity engaged in: (A) The production, preparation, propagation,
compounding, conversion or processing of prescription drug products
by extraction from substances of natural origin, or independently
by means of chemical synthesis or by a combination of extraction
and chemical synthesis; or (B) in the packaging, repackaging,
labeling, relabeling or distribution of prescription drug products.
"Drug manufacturer" or "pharmaceutical manufacturer" does not
include a wholesale distributor of drugs or a retail pharmacy
licensed under state law.
(2) "Labeler" means an entity or person that has a labeler
code from the Food and Drug Administration pursuant to 21 C.F.R.
§207.20 (1999) and receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for retail sale.
(3) "Marketing, advertising, and promotional costs" means
those costs subject to the reporting requirements of section
fifteen of this article;
(4)"Office of the Pharmaceutical Advocate" or "office" means
the office created pursuant to section four of this article.
(5) "Person" means any natural person or persons or any
corporation, partnership, company, trust or association of persons.
(6) "Pharmaceutical Advocate" or "advocate" means the position
created pursuant to section four of this article.
(7) "Pharmacy benefit management contract" means a contract
entered into with
an entity that procures prescription drugs at a
negotiated rate under a contract and which may serve as a third
party prescription drug benefit administrator.
(8) "Prescription drug purchasing agreement" means a written
agreement to pool all parties' prescription drug buying power in
order to negotiate the best possible prices.
(9) "Prescription drugs" mean substances recognized as drugs
in the official "United States Pharmacopoeia, Official Homeopathic
Pharmacopoeia of the United States or National Formulary," or any
supplement thereto, dispensed pursuant to a prescription issued by
an authorized health care practitioner, for use in the diagnosis,
cure, mitigation, treatment or prevention of disease in a human, as
well as prescription drug delivery systems, testing kits and
related supplies.
(10) "Sole source" means a pharmaceutical that provides a unique and powerful advantage available in the market to a broad
group of patients established under federal law.
(11) "State payors" means
the Public Employees Insurance
Agency, the Children's Health Insurance Program, the Division of
Corrections, the Division of Juvenile Services, the Regional Jail
and Correctional Facility Authority, state colleges and
universities, public hospitals, state or local institutions such as
nursing homes, veterans' homes, the Division of Rehabilitation,
public health departments, the Bureau of Medical Services, the
State Police, or any other state program which is a payor for
prescription drugs.
(12)"Unrestricted grants" means any gift, payment, or other
economic benefit to an educational institution, professional
association, health care facility, or governmental entity which
does not impose any restrictions on the use of the grant, such as
favorable treatment of a certain product or an ability of the
marketer to control or influence the planning, content, or
execution of the educational activity.
(13) "West Virginia Pharmaceutical Cost Management Council" or
"council" means the council continued pursuant to section ten of
this article.
§16-43-4. Creation of Office of Pharmaceutical Advocate;
appointment of Advocate; term of office, reports;
qualifications; oath.
(a) There is hereby created the Office of Pharmaceutical Advocate.
(b) The office shall be under the supervision of the
Pharmaceutical Advocate. The advocate shall be appointed by the
Governor, with the advice and consent of the Senate, and shall hold
office subject to the will and pleasure of the Governor. The
advocate shall be selected with consideration to training and
experience in issues relating to health care and prescription drug
costs.
(c) The advocate shall devote his or her entire time to the
duties of his or her office and may not be a candidate for, nor
hold, any other public office or trust nor be a member of a
political committee.
(d) The advocate, before entering upon the duties of office,
shall take and subscribe to the oath prescribed in section five,
article IV of the Constitution of West Virginia. The executed oath
shall be filed with the Secretary of State.
(e) The advocate shall report directly to the Governor or the
Governor's designee.
(f) All employees of the office shall be covered by the policy
and procedures of the classified-exempt service protection policies
of the Division of Personnel.
§16-43-5. Participation by state payors.
(
a) Notwithstanding any provision of this code to the
contrary, the advocate shall be the sole source for the management,
negotiation, and purchase of all prescription drugs for all state
payors:
Provided, That the Bureau for Medical Services and the Children's Health Insurance Program may be temporarily exempt from
the requirements of this section, pending any necessary approval by
the United State Department of Health and Human Services' Center
for Medicare and Medicaid Services: Provided further, That any
contract or agreement negotiated and executed by the advocate on
behalf of the Bureau of Medical Services shall contain all terms
and conditions necessary to comply with the provisions of Title XIX
of the Social Security Act, 42 U.S.C. §1396 et seq., dealing with
pharmacy services offered to recipients under the medical
assistance plan of West Virginia.
(b) All state payors shall cooperate with the advocate to meet
the requirements of this article: Provided, That no action of the
advocate shall encumber greater than five percent of the state
share of the annual funds appropriated to any one department,
agency, division, or board without prior approval of the secretary,
executive director, commissioner, or other chief officer with
authority over that department, agency, division, or board.
Intergovernmental agreements shall be developed to establish the
responsibilities of each entity in dealing with the provision of
pharmaceuticals. The advocate shall further report to the Medicaid
Advisory Council, the PEIA Finance Board and other governmental
boards, plans of the Advocate that have a direct impact on the
pharmaceutical benefits for which the board, council or other
oversight body has responsibility.
(c) For the purpose of implementing this article, the advocate
shall have the authority to negotiate pharmaceutical prices to be paid by all state payors, which shall have the authority to
participate in any program developed by the advocate, including but
not limited to, a uniform preferred drug list.
§16-43-6. Powers and duties, annual report.
(a)The office shall have the following powers and duties:
(1) To purchase or enter into contracts or agreements pursuant
to the provisions of section seven of this article;
(2) To sue and be sued, to plead and be impleaded;
(3) To evaluate, renegotiate, and amend existing contracts
relating to state purchase of prescription drugs to achieve cost
savings, including but not limited to pharmacy benefit management
contracts
: Provided, That in renegotiating existing contracts
involving a department, agency, division, or board, the advocate
shall include the secretary of the department or the executive
director, commissioner or other chief officer of the agency,
division, commission or board which is the party to the contract in
all negotiations;
(4) To negotiate and execute pharmacy benefit management
contracts for the purpose of managing rising costs for this state
and all parties which have executed prescription drug purchasing
agreements with the state or any state payor;
(5) To ensure disclosure by drug manufacturers and labelers of
expenditures for marketing, advertising and promotional costs in
accordance with the provisions of section fifteen of this article;
(6) To make recommendations to the Governor and the
Legislature regarding strategies that could more effectively control the costs of prescription drugs in West Virginia;
(7) To issue grants to achieve the goals of this article,
including the initiation, evaluation and promotion of strategies
that may result in reduced costs of prescription drugs; and
(8)To evaluate, develop, and implement other programs,
projects and initiatives to achieve the purposes of this article,
including, but not limited to:
(A) A streamlined prior authorization process for state
insurers; and
(B) Patient assistance programs in their current forms, as
well as new programs, such as central fill pharmacy/bulk
replenishment models;
(b) On or before the first day of January of each year, the
advocate shall submit an annual report to the Governor and the
Legislature Oversight Commission on Health and Human Resources
Accountability on the condition, operation, and functioning of the
office.
§16-43-7. Authorization to execute prescription drug purchasing
agreements.
(a) The advocate may execute, subject to the review and advice
of the West Virginia Pharmaceutical Cost Management Council in
accordance with the provisions of subsection (b) of this section
and as permitted by applicable federal law, prescription drug
purchasing agreements on behalf of the state and all state payors
with:
(1) The governments of other states and jurisdictions and
their individual departments, agencies, authorities, institutions,
programs, quasi-public corporations and political subdivisions;
(2) Cooperative purchasing agreements, alliances or consortia
in accordance with the provisions of section twelve of this
article
; and
(3) Entities in the private sector, including, commercial
insurance carriers, self-funded benefit plans and not-for-profit
health care organizations: Provided, That the advocate may also
execute agreements with private entities which are designed to
permit the combined purchasing of health care services, health care
management services, pharmacy benefits management services or
pharmaceutical products: Provided however, That no private entity
may be compelled to participate in any prescription drug purchasing
pool established under this article.
(b) The council shall review any proposed contract authorized
by this article before it is executed by the advocate and advise
the advocate as to whether the contract furthers the purposes of
this article and effectively manages the costs for the state payors
involved: Provided, That the council shall complete its review of
any proposed contract within fifteen days of receipt of the
contract for review: Provided further, That if any information
relied on by the council during the course of deliberations on any
proposed contract involves matters of commercial competition, the
council may conduct such deliberations in executive session in
accordance with the provisions of section four, article nine-a, chapter six of this code until the commercial competition has been
finalized and completed
.
(c) The advocate may not execute any agreement that grants the
state's credit for the purchase of prescription drugs by any entity
other than this state.
(d) The Advocate shall conduct a cost of dispensing survey
annually and based on the results shall adjust the dispensing fee
the Advocate establishes to be paid pharmacies by all state
agencies and other third party payors, including those in the
private sector that contract with the Advocate's office.
(e) If networks of pharmacies are established by the Advocate,
access standards must be developed to ensure the public that they
have convenient access to the lower cost prescription drugs.
(f) Any pharmacy willing to abide by the conditions of
bilaterally negotiated and executed pharmacy benefit management
contracts has the right to participate.
§16-43-8.
Audit required; reports.
On an annual basis, the advocate shall cause to be conducted
an audit by an independent certified public accountant of all
books, accounts, and records relating to all expenditures made
pursuant to any prescription drug purchasing agreement or pharmacy
benefit management contract executed under the provisions of this
article. The advocate shall submit the audit to the Joint Committee
on Government and Finance and the Legislative Oversight Commission
on Health and Human Resources Accountability on or before the
thirty-first day of December of each year.
§16-43-9. Exemption from Purchasing Division requirements.
The provisions of article three, chapter five-a of this code
shall not apply to any agreement or contract executed under the
provisions of this article: Provided, That any contract or
agreement executed under the provisions of this article shall be
approved as to form by the Attorney General.
§16-43-10. Continuation of the West Virginia Pharmaceutical
Cost Management Council; appointment of members;
chairperson; reimbursement for expenses.
(a) The West Virginia Pharmaceutical Cost Management Council
is hereby continued.
(b) The council shall be comprised of the advocate, who shall
act as chairperson,, and thirteen members from the public who shall
be appointed by the Governor with the advice and consent of the
Senate. One public member shall represent low income citizens, one
public member shall have experience in the financing, development
or management of a health insurance company which provides
pharmaceutical coverage, one public member shall represent an
organization of senior citizens with at least ten thousand members
within the state, one public member shall be a licensed pharmacist
employed by a community retail pharmacy, one public member shall be
a representative of a pharmaceutical manufacturer with substantial
operations located in West Virginia that has at least seven hundred
fifty employees, one public member shall be a primary care
physician, one public member shall represent those who will benefit from the establishment of the Office of the Pharmaceutical
Advocate, one public member shall represent the West Virginia
Chamber of Commerce, one public member shall represent the largest
education employee organization in the state, one public member
shall represent the largest labor organization in the state, one
public member shall represent higher education with expertise in
health care, one public member shall represent a faith based
organization with an interest in health advocacy and two ex-officio
members shall be the Speaker of the House or his or her designee
and the President of the Senate or his or her designee.
(c) Eight members of the council constitute a quorum.
(d) The members shall elect a vice chairperson and secretary
annually, and other officers as the members determine necessary.
(e) Meetings of the council shall be held at least once per
calendar quarter or at such other times as designated by the
chairperson or when a majority of the members so request.
(f) The members of the council shall not receive compensation
by reason of their membership on the council but shall be
reimbursed for reasonable expenses incurred in the performance of
their official duties.
(g) Members serving on the effective date of this article may
continue on the council until their terms expire. Appointed
members shall serve for a term of two years. Any member whose term
has expired shall serve until his or her successor is appointed and
has qualified. Any person appointed to fill a vacancy shall serve
only for the unexpired term.
(h) A majority vote of the members present is required for any
final determination by the council.
(i) The office shall furnish to the council such secretarial,
clerical, technical, research, and other services as are necessary
to the conduct of the business of the council.
(j) Members of the council appointed by the Governor may
pursue and engage in any business, occupation or gainful employment
that is not in conflict with the duties of the council.
§16-43-11. General duties of the West Virginia Pharmaceutical
Cost Management Council.
The council has general responsibility to review and provide
advice to the advocate regarding:
(1) The hiring of professional, clerical, technical and
administrative personnel as may be necessary to carry out the
provisions of this article;
(2) The execution of any proposed contract authorized by this
article in accordance with the provisions of subsection (b),
section seven of this article; and
(3) The review, analysis, and assessment of any issue,
project, or program requested by the advocate or decided by the
members of the council.
§16-43-12. Multistate alliances or consortia; discussion groups;
agreements.
(a) The advocate may
participate in a cooperative purchasing
agreement, alliance, or consortium for the purchase of prescription drugs with agencies of other states, other public bodies, or other
state agencies, if available and financially advantageous.
Nothing
in this article shall prohibit the payment of any administrative
fee necessary to participate in such a cooperative purchasing
agreement, alliance, or consortium.
(b) If the advocate participates in any cooperative purchasing
agreement, alliance, or consortium which is comprised of at least
five million covered lives, the cooperative purchasing agreement,
alliance, or consortium may employ either the Federal supply
schedule or an agreed-upon pricing schedule that, in the judgment
of the advocate and the other participating entities, will maximize
savings to the broadest percentage of the population of this state:
Provided, That any pharmaceutical manufacturer that deals with such
cooperative purchasing agreements, alliances, or consortia may
request a waiver from such pricing schedule in West Virginia for a
particular drug that should be granted if the advocate finds that
the
development, production, distribution costs, other reasonable
costs and reasonable profits excluding marketing, advertising and
promotional costs not essential to bringing the product to market
are more than the schedule price of the pharmaceutical or in those
cases in which the pharmaceutical in question has a sole source
.
The Advocate
shall determine fees to be paid by the applicant at
the time of the waiver application and proof required to be
submitted at the time of the waiver request to support the validity
of the request.
§16-43-13. Authorization to take advantage of Acts of Congress, accept gifts, grants and matching funds.
The Office of the Pharmaceutical Advocate is authorized to
take full advantage of the benefits and provisions of any Acts of
Congress and to accept any and all gifts, grants and matching funds
whether in the form of money or services.
§16-43-14. State payors' interim authority.
Nothing contained in this article limits the authority of
state payors to enter into contracts or arrangements or to
otherwise manage their pharmacy programs until such time as the
programs created or authorized pursuant to this article are
implemented.
§16-43-15. Advertising, marketing, and promotional costs;
reporting of same.
(a) To assist the state in its role as a purchaser of
prescription drugs and an administrator of prescription drug
programs, and to enable the state to determine the scope of
prescription drug advertising, marketing, and promotional costs and
their effect on the cost, utilization and delivery of health care
services, all drug manufacturers and/or labelers of prescription
drugs dispensed in this state shall report advertising, marketing,
and promotional costs for prescription drugs as provided in this
section.
(b) On the first day of July of each calendar year beginning
in the year two thousand seven, a drug manufacturer or labeler of
prescription drugs dispensed in this state shall file a report with the office, in a form and manner as proscribed by the advocate,
setting forth its advertising, marketing, and promotional costs for
activities conducted within this State during the preceding twelve
months.
(c) The annual report filed under subsection (b) of this
section shall include the following information in a form that
provides the value, nature, purpose and recipient of the expense:
(1) All expenses associated with the advertising, marketing
and direct promotion of prescription drugs through radio,
television, magazines, newspapers, direct mail, telephone
communications, personal contacts, the Internet and any other means
as determined by the Advocate, as they pertain to residents of this
state;
(2) With regard to all persons and entities licensed to
provide health care in this state, including health care
professionals and persons employed by them in this state, carriers
licensed pursuant to chapter thirty-three of this code, health
plans and benefits managers, pharmacies, hospitals, nursing
facilities, clinics, and other entities licensed to provide health
care in this state, the following information:
(A) Except for unrestricted grants for continuing medical
education programs;
(B) All expenses associated with food, entertainment, gifts
and anything provided to a health care professional;
(C) All expenses associated with trips and travel; and
(D) All expenses associated with product samples, except for samples that will be distributed free of charge to patients; and
(3) The aggregate cost of all employees or contractors of the
drug manufacturer or labeler who directly or indirectly engage in
activities listed in subdivisions (1) and (2) of this subsection,
including all forms of payment to such employees or contractors.
All costs reported under this subdivision shall reflect only that
portion of payment to employees or contractors that pertains to
activities within the state or to recipients of the advertising,
marketing, or promotional activities who are residents of or are
employed in the state.
(d) The following are exempt from disclosure requirements:
(1) All free samples of prescription drugs intended to be
distributed free of charge to patients;
(2) All payments of reasonable compensation and reimbursement
of expenses in connection with a bona fide clinical trial. As used
in this subdivision, "clinical trial" means a clinical trial
approved by an institutional review board in compliance with Title
21 of the United States Code and 21 C.F.R. §56.101 et seq. and 45
C.F.R. §46.101 et seq. and conducted in connection with a research
study where the principal purpose is scientific research; and
(3) All scholarship or other support for medical students,
residents and fellows to attend significant educational, scientific
or policy-making conference of a national, regional or specialty
medical or other professional association if the recipient of the
scholarship or other support is selected by the association; and
(e) The advocate is authorized to establish the documentation, level of detail and specificity of data, form and manner of
reporting required as he or she, with the advice of the council,
determines necessary to effectuate the purpose of this section.
The advocate shall include in the annual report required pursuant
to subsection (b), section six of this article, in an aggregate
form, the information provided in the required reporting.
(f)
Notwithstanding any provision of law to the contrary, the
reports submitted to the advocate pursuant to this section are
confidential and exempt from disclosure under the provisions of
article one, chapter twenty-nine-b of this code.
Data compiled in
aggregate form by the advocate for the purposes of preparing and
submitting the annual report required by subsection (b), section
six of this article, is a public record as defined in section two,
article one, chapter twenty-nine-b of this code: Provided, That any
trade secrets, as defined in section four, article one, chapter
twenty-nine-b of this code, or any other trade information
protected from disclosure under state or federal law, shall be
exempt from disclosure.
(g) The advocate may bring an action for injunctive relief,
costs, and attorney fees and to impose on a pharmaceutical
manufacturing company that fails to disclose the information
required in this section a civil penalty of no more than ten
thousand dollars per violation. Each unlawful failure to disclose
shall constitute a separate violation.
§16-43-16. Restraint of trade; civil and criminal violations
defined.
(a) The following are considered to restrain trade or commerce
unreasonably and are unlawful:
(1) A contract, combination or conspiracy between two or more
persons:
(A) For the purpose or with the intent to fix, control or
maintain the market price, rate or fee of pharmaceuticals; or
(B) Allocate or divide customers or markets, functional or
geographic, for any pharmaceutical;
(2) The establishment, maintenance or use of a monopoly or an
attempt to establish a monopoly of trade or commerce, any part of
which is within this state, by any persons for the purpose of or
with the intent to exclude competition or control, fix or maintain
pharmaceutical prices; or
(3) Fixing, controlling, maintaining limiting or discontinuing
the production, manufacture, sale or supply of any pharmaceutical
for the purpose or with the effect of fixing, controlling or
maintaining the market price of the pharmaceutical.
(b) Any person violating the provisions of this section is
guilty of a felony and, upon conviction thereof, shall be confined
in a state correctional facility for not less than one nor more
than ten years, or fined in an amount consistent with the Clayton
Act 15 U.S.C. §15 et seq., which may include treble damages, or
both fined and confined.
(c) Any person violating the provisions of this section is
liable for a civil penalty and fine in an amount consistent with
the Clayton Act 15 U.S.C. §15 et seq., which may include treble damages, for each violation.
(d) The county prosecuting attorney shall investigate
suspected violations of, and institute criminal proceedings
pursuant to, the provisions of this section.
(e) The Attorney General or special counsel appointed by the
Governor, in his or her discretion, shall represent the state in
all civil proceedings brought on behalf of the state to enforce the
provisions of this section. After payment of all attorney fees and
costs, no less than fifty percent of all judgments or settlements
shall be placed in the General Revenue Fund of the state.
§16-43-17. Participation by private individuals, commercial
insurance carriers, self-insured companies and
others in negotiated drug pricing program.
The advocate shall have the authority to establish programs
and procedures necessary to allow private individuals, commercial
insurance carriers, self-insured companies and private and
not-for-profit health care providers to participate in prescription
drug purchasing agreements executed under this article.
§16-43-18. Rulemaking.
The advocate, in consultation with the council, shall propose
rules for legislative approval in accordance with article three,
chapter twenty-nine-a of this code to implement the provisions of
this article. This authority shall include emergency rule-making
authority pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code. These rules may
include, but are not limited to:
(1) The development of criteria to establish a purchasing
consortium. These criteria shall include, but are not limited to:
membership eligibility, which shall include state entities that are
payors for prescription drugs and may include private individuals
and commercial insurance carriers, self-funded benefit plans, and
private and not-for-profit health care providers; consortium
operation and functionality; and the manner and procedure for the
consortium to either bid or negotiate pricing with pharmaceutical
manufacturers for obtaining lower priced pharmaceuticals;
(2) The development of virtual wholesale program to allow the
state to act as a pharmaceutical drug wholesaler and ensure that
prices obtained by a buying consortium operated by the advocate
would be made available for purchase by local pharmacies if the
pharmaceutical advocate finds it necessary;
(4) The extension of practices and procedures necessary to
allow the participation of private individuals, commercial
insurance carriers, self-insured companies and private and
not-for-profit health care providers in prescription drug
purchasing agreements executed under this article; and
(5) Other legislative rules considered necessary by the
advocate to carry out the duties and responsibilities prescribed to
the advocate or the office in this article.
Strike-throughs indicate language that is to be stricken from
the present law and underscoring indicates new language that would
be added.
§§16-43-1 through -17 are new; therefore, strike-throughs and
underscoring have been omitted.
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