91st General Assembly
Summary of HB3036
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House Sponsors:
FRANKS-CROTTY-HOFFMAN-DAVIS,MONIQUE-SHARP, FOWLER, FLOWERS, 
   MCCARTHY, BROSNAHAN, REITZ, DART, LYONS,JOSEPH, MCGUIRE, 
   SCOTT, HARTKE, MCKEON, BOLAND, SILVA, 
   BRUNSVOLD, SMITH,MICHAEL, SLONE, MURPHY, BUGIELSKI, PUGH, 
   JONES,LOU, DAVIS,STEVE, STROGER, BRADLEY, LOPEZ, GASH, 
   YOUNGE, OSTERMAN, HAMOS, ACEVEDO, BURKE, DELGADO, 
   GIGLIO, FEIGENHOLTZ, GILES, LANG, TURNER,ART, CURRY,JULIE, 
   FRITCHEY, GRANBERG, HOWARD, JONES,SHIRLEY, KENNER, 
   NOVAK, MORROW, MAUTINO AND CAPPARELLI.

Senate Sponsors:
HALVORSON-OBAMA-WALSH,L-LIGHTFORD-SMITH

Short description: 
PRESCRIPTION DRUG DISCOUNT ACT                                             

Synopsis of Bill as introduced:
        Creates the Senior Citizen  Prescription  Drug  Discount  Program      
   Act.   Provides  that  the  Department  of  Revenue  shall  (i) enroll      
   eligible senior citizens into  the  Program  to  qualify  them  for  a      
   discount  on  the  purchase  of  prescription  drugs  at an authorized      
   pharmacy, (ii) enter into rebate agreements with  drug  manufacturers,      
   and  (iii)  reimburse  pharmacies  for the cost of providing discounts      
   using the proceeds from the manufacturer rebate agreements.   Provides      
   that eligible seniors are Illinois residents 65 years of age or older.      
   Provides that any person who is eligible for pharmaceutical assistance      
   under the Senior Citizens and Disabled Persons Property Tax Relief and      
   Pharmaceutical  Assistance Act is eligible for this Program.  Sets out      
   provisions for the  administration  of  the  Act  and  authorizes  the      
   Department  to  promulgate rules to administer the Act.  Provides that      
   rebates paid by drug manufactures to the Department be deposited  into      
   the  Senior Citizen Prescription Drug Discount Program Fund to be used      
   to administer the Act.  Amends the State Finance  Act  to  create  the      
   Fund.  Effective July 1, 2000.                                              
        HOUSE AMENDMENT NO. 1.                                                 
        Deletes everything.  Reinserts the  provisions  of  the  bill  as      
   introduced  with  the following changes:  provides that the Department      
   of Revenue shall  compensate  authorized  pharmacies  subject  to  the      
   requirements of the State Prompt Payment Act and may adjust the amount      
   of  compensation  to authorized pharmacies based upon the availability      
   of funds in the Senior  Citizen  Prescription  Drug  Discount  Program      
   Fund;  requires  drug  manufacturers  to  enter into rebate agreements      
   under the Program for all prescription drugs sold in Illinois; removes      
   language setting negotiating strategies for the  Department;  provides      
   that  the  Department shall deposit the enrollment fees collected into      
   the  Senior  Citizen  Prescription  Drug  Discount  Program  Fund  and      
   separately account for the fees; changes the size  of  a  prescription      
   covered  from  one  lasting  34  days  to one lasting 90 days; removes      
   language about assignment of benefits under  the  Program;  and  makes      
   other changes.  Effective July 1, 2000.                                     
          STATE MANDATES NOTE, H-AM 1                                          
          (Department of Commerce and Community Affairs)                       
          HB 3036 (H-am 1) does not create a State mandate.                    
          HOME RULE NOTE, H-AM 1                                               
          (Department of Commerce and Community Affairs)                       
          HB 3036 (H-am 1) does not pre-empt home rule authority.              
          FISCAL NOTE, H-AM 1 (Department of Revenue)                          
          Implementation of HB 3036 will require at least 210 additional       
          employees and, including salaries, benefits and related equip-       
          ment, with corresponding costs for Systems and Programming sup-      
          port, is estimated to cost $13.65 million. Based on current          
          estimates, the $25 fee charged to participants should offset         
          the calculated implementation costs. The Department cannot           
          determine the overall shared impact to the State, or to the          
          manufacturers, but it is believed that HB 3036 will have a           
          potentially significant fiscal impact to the State. Under the        
          bill, the Department is clearly liable for reimbursement pay-        
          ments to pharmacies, at the expense of the Illinois taxpayers,       
          even before the requisite manufacturer rebates may be received       
          to cover the costs incurred by the pharmacies. With the total        
          program cost estimated at $706.5 million, the State's potential      
          interim liability is likely to be significant.                       
          PENSION NOTE, H-AM 3 (Pension Laws Commission)                       
          The legislation would not affect the accrued liabilities or          
          annual cost of any Illinois public pension fund or retirement        
          system.                                                              
          STATE DEBT NOTE, H-AM 3 (Ill. Economic and Fiscal Commission)        
          HB 3036, as amended, would not change the amount of authoriza-       
          tion for any type of State-issued or State-supported bond and,       
          therefore, would not affect the level of State indebtedness.         
          CORRECTIONAL NOTE, H-AM 3 (Department of Corrections)                
          There would be no corrections population or fiscal impact.           
          STATE MANDATES NOTE, H-AM 3                                          
          (Department of Commerce and Community Affairs)                       
          Same as previous mandate note, H-am 1.                               
          HOME RULE NOTE, H-AM 3                                               
          (Department of Commerce and Community Affairs)                       
          Same as previous home rule note, H-am 1.                             
          BALANCED BUDGET NOTE, H-AM 3 (Bureau of the Budget)                  
          Since this bill is not a supplemental appropriation bill, the        
          Balanced Budget Note Act is inapplicable.                            
          JUDICIAL NOTE, H-AM 3 (Administrative Office of Ill. Courts)         
          This legislation would neither increase or decrease the number       
          of judges needed in the State.                                       
        HOUSE AMENDMENT NO. 3.                                                 
        Deletes everything.  Reinserts the provisions of House  Amendment      
   No.  1  with  the  following  changes:  (1) provides that the discount      
   program begins January 1, 2001 and that, for drugs not listed  on  the      
   Federal  Supply Schedule, the eligible seniors shall pay the AWP minus      
   35%; (2) provides that the compensation  paid  by  the  Department  of      
   Revenue  to  authorized  pharmacies  shall  be from the Senior Citizen      
   Prescription Drug Discount Program Fund and that the amount paid shall      
   be the difference between the amount paid by eligible seniors and  the      
   AWP minus 10% (now, the amount above the Federal Supply Schedule price      
   charged to a participant in the Program up to the AWP minus 10%);  (3)      
   instead  of  requiring  rebate  agreements  for all manufacturers with      
   prescription drugs sold in Illinois, requires a rebate agreement under      
   this Program for those that already have an agreement with  any  payor      
   of prescription drug benefits that results in a reduction in price for      
   prescription  drugs sold by an authorized pharmacy; (4) provides that,      
   within 30 days after the effective date of this amendatory Act of  the      
   91st  General  Assembly,  the  State  Comptroller shall direct and the      
   State Treasurer shall transfer $27,000,000 from  the  General  Revenue      
   Fund  to the Senior Citizen Prescription Drug Discount Program Fund to      
   facilitate the payment of  reimbursements  to  authorized  pharmacies,      
   with  repayment,  subject  to  the  obligation to reimburse authorized      
   pharmacies, beginning July 1, 2001, with 7.5% interest per annum;  (5)      
   provides  that  the Department may reduce the annual enrollment fee by      
   rule if the revenue from the enrollment fees is in excess of the costs      
   to carry out the Program, rather than that the Department  may  reduce      
   the   dispensing   fee   if  annual  enrollment  fees  exceed  Program      
   administration costs; and (6) makes other changes.  Effective July  1,      
   2000.                                                                       
          FISCAL NOTE, H-AM 3 (Department of Revenue)                          
          The estimated administrative costs of HB 3036, as amended,           
          based on 210 additional employees, would be $13.65 million. The      
          fee charged to participants in the program should offset these       
          estimated administrative costs. The transfer of $27 million          
          from GRF to the Senior Citizen Prescription Drug Discount            
          Program Fund is to be paid back to GRF, with interest at 7.5%,       
          over the program's first year; this transfer creates an initial      
          fiscal impact to GRF of $27 million. The Department is required      
          to pay pharmacy claims for excess charges; these claims are to       
          be paid from the proceeds of drug manufacturer rebates. The          
          repayment schedule will not result in a cost to the State as         
          long as the initial $27 million transfer and the manufacturer        
          rebates keep pace with the claims for payment from member            
          pharmacies. The Department believes the State is liable for          
          payment of all valid claims filed. The maximum total cost of         
          the rebate program is estimated to be $706.5 million. If             
          rebate funds are not sufficient to keep pace with pharmacy           
          claims and the initial $27 million transfer has been exhausted,      
          HB 3036, as amended, will have a potentially significant fiscal      
          impact to the State.                                                 
          HOUSING AFFORDABILITY NOTE, H-AM 3                                   
          (Ill. Housing Development Authority)                                 
          There is no fiscal impact on a single-family residence.              
 
Last action on Bill: SESSION SINE DIE

   Last action date: 01-01-09

           Location: House

 Amendments to Bill: AMENDMENTS ADOPTED: HOUSE -   2     SENATE -   0


   END OF INQUIRY 
                                                                               



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