Enacts a state-sponsored prescription drug plan for the uninsured and chronically ill. (SD1)

A BILL FOR AN ACT

SECTION 1. The legislature finds that uninsured residents of Hawaii pay excessive prices for prescription drugs. In many cases, excessive drug prices deny residents access to medically necessary health care, and thereby threaten their health and safety. Many residents are admitted to or treated at hospitals each year because they can not afford the drugs prescribed for them that could have prevented the need for hospitalization. Many others must enter expensive institutional care settings because they can not afford the necessary prescription drugs that could have supported them outside of an institution. All Hawaii residents are threatened by the possibility that when they need medically necessary prescription drugs most, they may be unable to afford their doctor's recommended treatment.

Residents of Hawaii and other Americans pay the highest prices in the world for prescription drugs, prices that result in extremely high profits for drug companies. Excessive pricing for prescription drugs undermines the economy of Hawaii by diminishing the ability of its residents to contribute as employees and employers.

This Act is enacted by the legislature as a positive measure to make prescription drugs more affordable to Hawaii residents, thereby increasing the overall health of our families, benefiting employers, employees, and the fiscal strength of our society, promoting healthy communities, and improving the public health and welfare.

§328-A Definitions. As used in this part:

"Board" means the board of pharmacy under chapter 461.

"Department" means the department of health.

"Director" means the director of health.

"Retail pharmacy" means a retail pharmacy or other business granted a permit under chapter 461 to dispense prescription drugs in this State, and that dispenses drugs covered by a rebate agreement under the Rx program under section 328-B.

§328-B Rx program. (a) The Rx program is established within the department to provide discounted prescription drug prices to uninsured residents of the State.

(b) A retail pharmacy may discount the price of drugs covered by the Rx program as follows:

§328-C Eligibility for individuals to participate in the Rx program; department responsibility. A resident of the State shall be eligible to participate in the Rx program if the resident:

The department shall establish simplified procedures for determining eligibility and issuing Rx program enrollment cards to eligible residents. The department shall undertake outreach efforts to build public awareness of the Rx program and maximize enrollment by eligible residents. The department may adjust the requirements and terms of the Rx program to accommodate any new federally funded prescription drug programs.

§328-D Operation of the Rx program. The board shall adopt rules under chapter 91 requiring disclosure by retail pharmacies to Rx program participants of the amount of savings provided as a result of the Rx program. The rules shall consider and protect information that is proprietary in nature.

A retail pharmacy shall submit claims to the department of human services to verify the amount charged to Rx program participants. The department of health shall inform the department of human services of the discounted prices.

The department shall not impose transaction charges on retail pharmacies that submit claims or receive payments under the Rx program.

On a quarterly basis, the department of human services shall reimburse a retail pharmacy for discounted prices provided to Rx program participants and professional fees set by the director. The initial professional fee shall be $3 per prescription. The reimbursements shall be made from the QUEST program, Medicaid, or other appropriate state program, or a combination of any, in the discretion of the department of human services. For purposes of the Rx program, eligible participants shall be deemed to qualify under QUEST or Medicaid, notwithstanding that they are not QUEST or Medicaid covered.

§328-E Annual summary report. The department shall report annually the enrollment and financial status of the Rx program to the legislature.

§328-F Coordination with other programs. In implementing this part, the department may coordinate with other governmental programs and may take actions to enhance efficiency, reduce the cost of prescription drugs, and maximize the benefits of this and other governmental programs, including providing the benefits of the Rx program to the beneficiaries of other programs.

§328-G Rulemaking. The department may adopt rules under chapter 91 to implement this part.

§328-H Waivers. The department may seek any waivers of federal law, rule, or regulation necessary to implement this part.

§328-I Determination of fair prices. By April 1, 2003, the director shall determine whether the prices for prescription drugs provided to Rx program participants are reasonably comparable to the lowest cost paid for the same drugs delivered or dispensed. In making this determination, the following provisions shall apply:

§328-J Select prescription drugs. In making a determination under section 328-I, the director may rely on pricing information on a selected number of prescription drugs if that list is representative of the prescription drug needs of the residents of the State and is made public as part of the process of establishing maximum retail prices.

§328-K Public health or welfare. The director may take actions that the director determines necessary if there is a severe limitation or shortage of or lack of access to prescription drugs in the State that could threaten or endanger the public health or welfare.

§328-L Right of action, damages, and penalties. (a) The department may bring a civil action for a direct or indirect injury to any person, group of persons, the State, or any county of the State caused by a violation of this part. There shall be a right to a jury trial in any action brought under this part. If the State prevails, the defendant shall pay three times the amount of damages and the costs of suit, including necessary and reasonable investigative costs, reasonable expert fees, and reasonable attorney's fees. For a wilful or repeated violation of this part, punitive damages may be awarded. After deduction of the costs of distribution, the damages shall be equitably distributed by the department to all injured parties.

(b) In addition to other remedies for violation of this part, the attorney general may obtain injunctive relief and a civil penalty in an amount not to exceed $100,000, plus the costs of suit, including necessary and reasonable investigative costs, reasonable expert fees, and reasonable attorney's fees.

§328-M Criminal penalty. A violation of the maximum retail prices established under this part is a misdemeanor."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2001-2002, for the purposes of this Act.

The sum appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 4. In codifying new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. This Act shall take effect on July 1, 2002.