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|[ House Amendment 001 ]|
92_HB4000 LRB9213598DJgc 1 AN ACT in relation to public aid. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Public Aid Code is amended by 5 adding Sections 5-23 through 5-23.50 as follows: 6 (305 ILCS 5/5-23 new) 7 Sec. 5-23. Prescribed-drug spending-control program. 8 (a) Subject to appropriations, the Department of Public 9 Aid shall establish a Medicaid prescribed-drug 10 spending-control program that includes the components 11 described in Sections 5-23.5 through 5-23.50. 12 (b) The Department of Public Aid may contract all or any 13 part of the implementation of the Medicaid prescribed-drug 14 spending-control program to private organizations. 15 Notwithstanding any other provision of law, the Department, 16 at its discretion, may renew a contract or contracts for 17 fiscal intermediary services one or more times for periods 18 determined by the Department. All such renewals combined may 19 not exceed a total period longer than the term of the 20 original contract, however. 21 (305 ILCS 5/5-23.5 new) 22 Sec. 5-23.5. Brand-name-drug restriction. 23 (a) Except as otherwise provided in this Section and in 24 Section 5-23.10, Medicaid prescribed-drug coverage for 25 brand-name drugs for adult Medicaid recipients is limited to 26 the dispensing of 4 brand-name drugs per month per recipient. 27 Children are exempt from this restriction. Antiretroviral 28 agents are excluded from this restriction. No requirement for 29 prior authorization or other restrictions on medications used 30 to treat mental illnesses such as schizophrenia, severe -2- LRB9213598DJgc 1 depression, or bipolar disorder may be imposed on Medicaid 2 recipients. Medications that must be available without 3 restriction for persons with mental illnesses include 4 atypical antipsychotic medications, conventional 5 antipsychotic medications, selective serotonin reuptake 6 inhibitors, and other medications used for the treatment of 7 serious mental illnesses. Although a drug may be included on 8 the preferred drug formulary, it is not exempt from the 9 4-brand-name-drug limit. 10 (b) The Department of Public Aid shall limit the amount 11 of a prescribed drug dispensed to no more than a 34-day 12 supply. 13 (c) The Department of Public Aid must continue to provide 14 unlimited generic drugs, contraceptive drugs and items, and 15 diabetic supplies. 16 (d) After the Department of Public Aid adopts a preferred 17 drug formulary under Section 5-23.30, if a product in the 18 formulary is one of the first 4 brand-name drugs used by a 19 recipient in a month, reimbursement for the drug is not 20 subject to prior authorization under Section 5-23.20. 21 (305 ILCS 5/5-23.10 new) 22 Sec. 5-23.10. Exception based on patient's treatment 23 needs. The Department of Public Aid may authorize an 24 exception to the brand-name-drug restriction under Section 25 5-23.5 based on a patient's treatment needs. The Department 26 may authorize such an exception only if it is based on prior 27 consultation provided by the Department or a Department 28 contractor. The Department must establish procedures to 29 ensure the following: 30 (1) There must be a response to a request for prior 31 consultation by telephone or other telecommunication 32 device within 24 hours after receipt of the request. 33 (2) A 72-hour supply of the drug prescribed must be -3- LRB9213598DJgc 1 provided in an emergency or when the Department of Public 2 Aid does not provide a response within 24 hours as 3 required by paragraph (1). 4 (3) Except for the exception for nursing home 5 residents and other institutionalized adults under 6 Section 5-23.20 and except for drugs on the restricted 7 formulary for which prior authorization may be sought by 8 an institutional or community pharmacy, prior 9 authorization for an exception to the brand-name-drug 10 restriction may be sought only by the prescriber and not 11 by the pharmacy. When prior authorization for an 12 exception to the brand-name-drug restriction is granted 13 for a patient in an institutional setting, the approval 14 is authorized for 12 months and monthly prior 15 authorization is not required for that patient. 16 (305 ILCS 5/5-23.15 new) 17 Sec. 5-23.15. Reimbursement rate for prescribed drugs. 18 Medicaid reimbursements to pharmacies for prescribed drugs 19 must be set at the average wholesale price less 13.25%. 20 (305 ILCS 5/5-23.20 new) 21 Sec. 5-23.20. Prior authorization. 22 (a) Except for mental health-related drugs, 23 anti-retroviral drugs, and drugs for nursing home residents 24 and other institutional residents, reimbursement for drugs 25 not included in the formulary established under Section 26 5-23.30 is subject to prior authorization. 27 (b) The Department of Public Aid may establish prior 28 authorization requirements for certain populations of 29 Medicaid beneficiaries, certain drug classes, or particular 30 drugs to prevent fraud, abuse, overuse, and possible 31 dangerous drug interactions. 32 (c) The Medicaid Pharmaceutical and Therapeutics -4- LRB9213598DJgc 1 Committee created under Section 5-23.35 shall make 2 recommendations to the Department of Public Aid regarding 3 drugs for which prior authorization is required. The 4 Department shall inform the committee of the Department's 5 decisions regarding drugs subject to prior authorization. 6 (305 ILCS 5/5-23.25 new) 7 Sec. 5-23.25. Manufacturer rebates for generic drugs. The 8 Department of Public Aid may enter into arrangements under 9 which manufacturers of generic drugs prescribed to Medicaid 10 recipients must provide rebates of at least 15.1% of the 11 average manufacturer price for the manufacturer's generic 12 products. These arrangements must require that if a 13 generic-drug manufacturer pays federal rebates for 14 Medicaid-reimbursed drugs at a level below 15.1%, the 15 manufacturer must provide a supplemental rebate to the State 16 in an amount necessary to achieve a 15.1% rebate level. 17 (305 ILCS 5/5-23.30 new) 18 Sec. 5-23.30. Preferred drug formulary; supplemental 19 rebates. 20 (a) The Department of Public Aid may establish a 21 preferred drug formulary in accordance with 42 U.S.C. 22 1396r-8. In establishing the formulary, the Department may 23 negotiate supplemental rebates from manufacturers that are in 24 addition to those required by Title XIX of the Social 25 Security Act and at no less than 10% of the average 26 manufacturer price as defined in 42 U.S.C. 1396r-8 on the 27 last day of a quarter unless the federal or supplemental 28 rebate, or both, equals or exceeds 25%. There is no upper 29 limit on the supplemental rebates the Department may 30 negotiate. The Department may determine that specific 31 products, brand-name or generic, are competitive at lower 32 rebate percentages. The Department may contract with an -5- LRB9213598DJgc 1 outside agency or contractor to conduct negotiations for 2 supplemental rebates. 3 (b) Agreement to pay the minimum supplemental rebate 4 percentage shall guarantee a manufacturer that the Medicaid 5 Pharmaceutical and Therapeutics Committee created under 6 Section 5-23.35 will consider a product for inclusion in the 7 preferred drug formulary. A pharmaceutical manufacturer is 8 not guaranteed placement of a drug in the formulary simply by 9 paying the minimum supplemental rebate, however. Department 10 of Public Aid decisions must be based on the clinical 11 efficacy of a drug and recommendations of the Medicaid 12 Pharmaceutical and Therapeutics Committee, as well as the 13 price of competing products minus federal and State rebates. 14 (c) In this Section, "supplemental rebates" may include, 15 at the Department of Public Aid's discretion, cash rebates 16 and other program benefits that offset a Medicaid 17 expenditure. Those other program benefits may include, but 18 need not be limited to, disease management programs, drug 19 product donation programs, drug utilization control programs, 20 prescriber and beneficiary counseling and education, fraud 21 and abuse initiatives, and other services or administrative 22 investments with guaranteed savings to the Medicaid program 23 in the same year that the rebate reduction is included in the 24 appropriation to the Department for operation of the Medicaid 25 program. 26 (d) The Department of Public Aid shall seek any waivers 27 of federal law or regulations necessary to implement this 28 Section. 29 (e) A Medicaid recipient may appeal a decision of the 30 Department of Public Aid concerning the preferred drug 31 formulary in the same manner as the appeal of other decisions 32 of the Department under this Article. 33 (f) The Department of Public Aid shall publish and 34 disseminate the preferred drug formulary to all Medicaid -6- LRB9213598DJgc 1 vendors in the State. 2 (305 ILCS 5/5-23.35 new) 3 Sec. 5-23.35. Medicaid Pharmaceutical and Therapeutics 4 Committee. 5 (a) The Medicaid Pharmaceutical and Therapeutics 6 Committee is created within the Department of Public Aid for 7 the purpose of developing a preferred drug formulary under 42 8 U.S.C. 1396r-8. The committee shall be comprised as specified 9 in 42 U.S.C. 1396r-8 and shall consist of 11 members 10 appointed by the Governor. Five members must be physicians 11 licensed to practice medicine in all of its branches, one of 12 whom must possess the degree of doctor of osteopathy or 13 osteopathic medicine; 5 members must be pharmacists licensed 14 under the Pharmacy Practice Act of 1987; and one member must 15 be a consumer representative. The Governor shall ensure that 16 at least some of the members of the committee represent 17 Medicaid participating physicians and pharmacies serving all 18 segments and diversity of the Medicaid population, and have 19 experience in either developing or practicing under a 20 preferred drug formulary. At least one of the members must 21 represent the interests of pharmaceutical manufacturers. 22 The Governor shall appoint members to serve for terms of 23 2 years from the date of their appointment. The Governor may 24 appoint members to more than one term. 25 (b) Committee members shall select a chairperson and a 26 vice chairperson each year from the committee membership. 27 (c) The committee shall meet at least once each calendar 28 quarter and may meet at other times at the discretion of the 29 chairperson and members. The committee shall comply with 30 rules adopted by the Department of Public Aid, including 31 rules for providing notice of any committee meetings as 32 required under the Open Meetings Act. 33 (d) The Department of Public Aid shall provide staff for -7- LRB9213598DJgc 1 the committee and shall assist the committee with all 2 ministerial duties. 3 (305 ILCS 5/5-23.40 new) 4 Sec. 5-23.40. Committee; preferred drug formulary. 5 (a) The Medicaid Pharmaceutical and Therapeutics 6 Committee shall develop its preferred drug formulary 7 recommendations by considering the clinical efficacy, safety, 8 and cost effectiveness of a product. To the extent feasible, 9 the committee shall review all drug classes included in the 10 preferred drug formulary at least every 12 months. The 11 committee may recommend additions to and deletions from the 12 formulary so that the formulary provides for medically 13 appropriate drug therapies for Medicaid patients which 14 achieve cost savings contained in appropriations to the 15 Department of Public Aid for operation of the Medicaid 16 program. 17 (b) The Medicaid Pharmaceutical and Therapeutics 18 Committee shall ensure that pharmaceutical manufacturers 19 agreeing to provide a supplemental rebate as provided in 20 Section 5-23.30 have an opportunity to present evidence 21 supporting inclusion of a product in the preferred drug 22 formulary. Upon timely notice, the Department of Public Aid 23 shall ensure that any drug that has been approved or had any 24 of its particular uses approved by the United States Food and 25 Drug Administration under a priority review classification is 26 reviewed by the committee at the committee's next regularly 27 scheduled meeting. To the extent possible, upon notice by a 28 manufacturer, the Department shall also schedule a product 29 review for any new product at the committee's next regularly 30 scheduled meeting. 31 (305 ILCS 5/5-23.45 new) 32 Sec. 5-23.45. Advisory committee; institutionalized -8- LRB9213598DJgc 1 persons. The Department of Public Aid shall establish an 2 advisory committee to study the feasibility of using a 3 restricted drug formulary for nursing home residents and 4 other institutionalized adults. The committee shall be 5 comprised of 7 members appointed by the Director of Public 6 Aid. The committee members must include 2 physicians 7 licensed to practice medicine in all of its branches and 5 8 pharmacists licensed under the Pharmacy Practice Act of 1987. 9 Three of the pharmacists must be appointed from a list of 10 recommendations provided by a statewide organization 11 representing pharmacists who provide pharmacy services in a 12 long-term care setting. 13 (305 ILCS 5/5-23.50 new) 14 Sec. 5-23.50. Report. The Department of Public Aid must 15 submit a report to the Governor, the President of the Senate, 16 and the Speaker of the House of Representatives by January 15 17 of each year. The report must include, but need not be 18 limited to, a discussion of the progress made in implementing 19 Medicaid cost-containment measures and their effect on 20 Medicaid prescribed-drug expenditures. 21 Section 99. Effective date. This Act takes effect upon 22 becoming law.
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