----------------------------------------------------- ¦ REFERENCE TITLE: fair drug pricing ¦ ----------------------------------------------------- ¦ ¦ ¦ ¦ ¦ ¦ ¦ State of Arizona ¦ ¦ House of Representatives ¦ ¦ Forty-fourth Legislature ¦ ¦ Second Regular Session ¦ ¦ 2000 ¦ ¦ ¦ ----------------------------------------------------- ¦ HB 2719 ¦ ----------------------------------------------------- ¦ Introduced by ¦ ¦ Representatives Cardamone, Valadez, Miranda: Clark ¦ -----------------------------------------------------
AN ACT
AMENDING TITLE 41, ARIZONA REVISED STATUTES, BY ADDING CHAPTER 35; RELATING TO FAIR PRICING FOR PRESCRIPTION DRUGS.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 41, Arizona Revised Statutes, is amended by adding chapter 35, to read:
CHAPTER 35
FAIR PRICING FOR PRESCRIPTION DRUGS
ARTICLE 1. GENERAL PROVISIONS
41-3801. Prescription drug fair pricing board; membership; compensation
A. THE PRESCRIPTION DRUG FAIR PRICING BOARD IS ESTABLISHED CONSISTING OF THE FOLLOWING MEMBERS:
1. ONE PUBLIC MEMBER WHO IS APPOINTED BY THE PRESIDENT OF THE SENATE AND WHO REPRESENTS SENIOR CITIZENS.
2. ONE PUBLIC MEMBER WHO IS APPOINTED BY THE PRESIDENT OF THE SENATE AND WHO REPRESENTS DISABLED CITIZENS.
3. ONE PUBLIC MEMBER WHO IS APPOINTED BY THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND WHO REPRESENTS LOW-INCOME CITIZENS.
4. ONE PUBLIC MEMBER WHO IS APPOINTED BY THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND WHO REPRESENTS CHILDREN.
5. TWO PHYSICIANS WHO ARE LICENSED PURSUANT TO TITLE 32, CHAPTER 13 OR 17. THE GOVERNOR SHALL APPOINT THESE MEMBERS.
6. TWO PHARMACISTS WHO HAVE BEEN LICENSED PURSUANT TO TITLE 32, CHAPTER 18 FOR AT LEAST FIVE YEARS AND WHO ARE NOT MEMBERS OF THE BOARD OF PHARMACY. THE GOVERNOR SHALL APPOINT THESE MEMBERS.
7. THE DIRECTOR OF THE DEPARTMENT OF HEALTH SERVICES OR THE DIRECTOR'S DESIGNEE. THE DIRECTOR SERVES AS AN ADVISORY MEMBER AND IS NOT COUNTED FOR THE PURPOSE OF DETERMINING THE PRESENCE OF A QUORUM.
B. PUBLIC MEMBERS SERVE THREE YEAR TERMS AND MAY BE REAPPOINTED.
C. BOARD MEMBERS ARE NOT ELIGIBLE TO RECEIVE COMPENSATION, BUT PUBLIC MEMBERS ARE ELIGIBLE TO RECEIVE REIMBURSEMENT OF EXPENSES PURSUANT TO TITLE 38, CHAPTER 4, ARTICLE 2.
D. THE BOARD SHALL MEET AT LEAST ONCE EACH MONTH. THE BOARD SHALL SELECT A CHAIRPERSON EACH YEAR AT ITS JANUARY MEETING.
E. THE DEPARTMENT OF HEALTH SERVICES SHALL PROVIDE THE BOARD WITH ADMINISTRATIVE SUPPORT AND MEETING ROOM SPACE.
41-3802. Prescription pricing
THE BOARD SHALL ESTABLISH THE MAXIMUM PRICE FOR PRESCRIPTION DRUGS PURSUANT TO THE FOLLOWING:
1. THE MAXIMUM PRICE FOR A PRESCRIPTION DRUG SOLD IN THIS STATE BY A MANUFACTURER SHALL BE THE LOWER OF THE PRICE LISTED IN EITHER:
(a) THE FEDERAL SUPPLY SCHEDULE FOR PHARMACEUTICALS AND DRUGS MAINTAINED BY THE UNITED STATES DEPARTMENT OF VETERANS AFFAIRS.
(b) THE DRUG FORMULARY MAINTAINED BY THE CANADIAN PROVINCE OF QUEBEC.
2. THE MAXIMUM PRICE FOR A PRESCRIPTION DRUG SOLD IN THIS STATE BY A WHOLESALER IS THE MAXIMUM MANUFACTURER PRICE AS DETERMINED PURSUANT TO PARAGRAPH 1 PLUS ANY USUAL AND CUSTOMARY WHOLESALE MARKUP.
3. THE MAXIMUM PRICE FOR A PRESCRIPTION DRUG SOLD IN THIS STATE BY A RETAILER IS THE MAXIMUM WHOLESALE PRICE AS DETERMINED PURSUANT TO PARAGRAPH 2 PLUS ANY USUAL AND CUSTOMARY RETAIL MARKUP.
41-3803. Prescription drug survey
A. THE BOARD SHALL CONDUCT A SEMIANNUAL SURVEY OF PRESCRIPTION PRICES. THE SURVEY SHALL INCLUDE THE FOLLOWING:
1. THE CURRENT MANUFACTURER, WHOLESALE AND RETAIL MAXIMUM PRICES OF PRESCRIPTION DRUGS IN THIS STATE AS ESTABLISHED BY THE BOARD.
2. THE MANUFACTURER, WHOLESALE AND RETAIL MAXIMUM PRICES FOR PRESCRIPTION DRUGS FOR THE PREVIOUS FIVE YEARS AS SHOWN AT SIX MONTH INTERVALS.
3. THE FEDERAL SUPPLY SCHEDULE FOR PHARMACEUTICALS AND DRUGS MAINTAINED BY THE UNITED STATES DEPARTMENT OF VETERANS AFFAIRS.
4. THE DRUG FORMULARY MAINTAINED BY THE CANADIAN PROVINCE OF QUEBEC.
5. ANY OTHER INFORMATION CONCERNING PRESCRIPTION DRUG PRICES IN THIS STATE THAT THE BOARD CONSIDERS APPROPRIATE, INCLUDING RELEVANT INFORMATION REGARDING PRESCRIPTION DRUG POLICIES AND PRICING OF THE MEXICAN STATE OF SONORA.
B. THE BOARD SHALL SUBMIT A COPY OF THE SURVEY RESULTS TO THE GOVERNOR, THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND SHALL PROVIDE A COPY OF THESE RESULTS TO THE SECRETARY OF STATE AND THE DIRECTOR OF THE DEPARTMENT OF LIBRARY, ARCHIVES AND PUBLIC RECORDS.
C. THE BOARD SHALL MAKE THE RESULTS OF EACH SURVEY AVAILABLE TO THE PUBLIC THROUGH AN INTERNET WEB SITE.
41-3804. Appeals
A. A MANUFACTURER OF PRESCRIPTION DRUGS MAY APPEAL THE MAXIMUM PRICE OF A PRESCRIPTION DRUG TO THE BOARD.
B. IN REVIEWING A MAXIMUM PRICE PURSUANT TO AN APPEAL, THE BOARD SHALL CONSIDER THE COST OF PRODUCTION, THE PROFIT THROUGH SALE AND THE PRICE CHARGED IN OTHER MARKETS FOR PRESCRIPTION DRUGS.
C. IF A MANUFACTURER OF PRESCRIPTION DRUGS APPEALS A PRICE SET BY THE BOARD, THE MANUFACTURER SHALL FULLY DISCLOSE TO THE BOARD INFORMATION REGARDING THE PRODUCTION COSTS OF THE DRUG AND ANY OTHER INFORMATION PERTINENT TO THE APPEAL AND AS REQUESTED BY THE BOARD.
D. THE FILING OF AN APPEAL DOES NOT DELAY THE IMPLEMENTATION OF THE MAXIMUM PRICE OF THE PRESCRIPTION DRUG IMPOSED BY THE BOARD.
41-3805. Violations; enforcement
A. THE ATTORNEY GENERAL SHALL INVESTIGATE ANY VIOLATION BY A MANUFACTURER OR WHOLESALER OF PRESCRIPTION DRUGS SOLD IN THIS STATE OF ANY OF THE FOLLOWING:
1. A VIOLATION OF THIS CHAPTER.
2. A VIOLATION OF ANY OTHER STATE OR LOCAL LAW THAT PROHIBITS DISCRIMINATORY REBATES OR DISCOUNTS OR OTHER METHODS OF ESTABLISHING PRICES FOR PRESCRIPTION DRUGS.
3. A VIOLATION OF ANY OTHER STATE OR LOCAL LAW THAT PROHIBITS THE RETURN OF PART OF THE COST OF A DRUG PURSUANT TO A CONFIDENTIAL AGREEMENT OR THROUGH COERCION.
4. A VIOLATION OF ANY OTHER STATE OR LOCAL LAW THAT PROHIBITS A DRUG MANUFACTURER OR WHOLESALER FROM INTERFERING WITH HEALTH CARE PROVIDERS OR RETAIL PHARMACIES OR THE PATIENTS OF HEALTH CARE PROVIDERS OR RETAIL PHARMACIES.
B. IF THE ATTORNEY GENERAL DETERMINES THAT A VIOLATION OF SUBSECTION A OR ANY SIMILAR FEDERAL LAW HAS OCCURRED, IN ADDITION TO ANY OTHER PENALTIES, THE ATTORNEY GENERAL MAY RECOMMEND THAT THE BOARD OF PHARMACY REVOKE, SUSPEND OR RESTRICT A DRUG MANUFACTURER'S PERMIT. THE BOARD OF PHARMACY SHALL NOT TAKE DISCIPLINARY ACTION IF THAT ACTION WOULD RESTRICT THE SUPPLY OF PRESCRIPTION DRUGS IN THIS STATE.
C. THE ATTORNEY GENERAL SHALL INITIATE AN INVESTIGATION ON THE WRITTEN REQUEST OF AT LEAST FIFTY RESIDENTS OF THIS STATE WHO ALLEGE EXCESSIVE MANUFACTURER, WHOLESALE OR RETAIL PRESCRIPTION DRUG PRICES.
41-3806. Agreements with other entities
THE BOARD MAY ENTER INTO AGREEMENTS WITH OTHER STATES, CANADIAN PROVINCES OR MEXICAN STATES FOR THE PURPOSE OF MAINTAINING FAIR AND UNIFORM PRESCRIPTION DRUG PRICES AND ENSURING MAXIMUM ACCESS TO AFFORDABLE PRESCRIPTION DRUGS.
41-3807. Prescription drug savings; transfer to fund
THE BOARD, WITH THE ASSISTANCE OF THE AUDITOR GENERAL, SHALL ANNUALLY DETERMINE THE AMOUNT OF THE DECREASE IN THE PREVIOUS FISCAL YEAR IN THE COSTS OF THE PRESCRIPTION DRUG INSURANCE PLAN PROVIDED TO STATE EMPLOYEES AND RETIREES AND THAT IS THE DIRECT RESULT OF THE IMPLEMENTATION OF THIS CHAPTER. THE LEGISLATURE SHALL TRANSFER MONIES EQUAL TO THIS AMOUNT TO A FUND ESTABLISHED TO RECEIVE MONIES RELATING TO THE TOBACCO LITIGATION MASTER SETTLEMENT AGREEMENT.
41-3808. Emergency measures
THE BOARD SHALL DRAFT A PLAN THAT INCLUDES EMERGENCY MEASURES THAT THE GOVERNOR MAY IMPLEMENT IF THE BOARD DETERMINES THAT THERE IS A SEVERE LIMITATION OR SHORTAGE OF OR LOSS OF ACCESS TO PRESCRIPTION DRUGS IN THIS STATE THAT WOULD THREATEN OR ENDANGER THE PUBLIC'S HEALTH.
41-3809. Rules
THE BOARD SHALL ADOPT RULES TO ENFORCE THIS CHAPTER.
41-3810. Program termination
THE PROGRAM ESTABLISHED BY THIS CHAPTER ENDS ON JULY 1, 2010 PURSUANT TO SECTION 41-3102.