STAND. COM. REP. NO.540
Honolulu, Hawaii
, 2001
RE: S.B. No. 250
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committees on Health and Human Services and Judiciary, to which was referred S.B. No. 250 entitled:
"A BILL FOR AN ACT RELATING TO PRESCRIPTION DRUGS,"
beg leave to report as follows:
The purpose of this measure is to provide discounted prescription drug prices to uninsured residents of the State.
Your Committees received testimony in support of this measure from the Department of Health (DOH), Executive Office on Aging, Hawaii Pharmacists Association, and ILWU. Testimony in opposition was received from the Pharmaceutical Research and Manufacturers of America.
Your Committees find that residents of Hawaii who lack health insurance pay excessive prices for prescription drugs. The effect is to deny them access to medically necessary treatment, thereby threatening their health and safety. Your Committees are cognizant that excessive pricing of prescription drugs could be a contributing factor to the high prices.
This measure creates the "Rx program" to be administered by the DOH. Under this program, drug manufacturers and labelers that sell prescription drugs through any state funded or state operated program would be required to enter into a rebate agreement with the DOH and make rebate payments to the State. The amount of the rebate would be negotiable. A retail pharmacy would discount the price of drugs covered by the Rx program and sold to Rx program participants. Retail pharmacies would in turn be reimbursed for the discounted prices from rebates paid into the Rx special fund.
In effect, this measure achieves discounts by making drug manufacturers and labelers subsidize retail pharmacies for the amount of the discounts of prescription drugs purchased by residents who do not have prescription drug coverage under any health insurance plan or under any public plan.
Your Committees note that the Rx program is modeled after a similar 1999 enactment in Maine which is now under court challenge by drug manufacturers. Your Committees are skeptical about the constitutionality of this measure, but desire to keep alive the discussion and the concept of a state-sponsored prescription drug plan. Your Committees are also cognizant that the federal government may soon enact a prescription drug plan under Medicare or other insurance plan.
Your Committees have amended this measure by:
(1) Deleting references to required rebates paid by drug manufacturers to the State;
(2) Specifying eligibility as the uninsured, or those who have insurance but cannot afford to pay at least eighty per cent of the cost of prescription drugs to treat a chronic illness or disease;
(3) Allowing, rather than requiring, retail pharmacies to discount prices;
(4) Reimbursing participating retail pharmacies that sell at discounted prices the amount of the discount, from the QUEST program, Medicaid, or other appropriate program;
(5) Making the measure effective July 1, 2002; and
(6) Making technical, nonsubstantive amendments to comport with proper drafting.
As affirmed by the records of votes of the members of your Committees on Health and Human Services and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 250, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 250, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Health and Human Services and Judiciary,
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____________________________ BRIAN KANNO, Chair |
____________________________ DAVID MATSUURA, Chair |
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