STAND. COM. REP. NO. 1037-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 3237

S.D. 1

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 3237, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PRESCRIPTION DRUGS,"

begs leave to report as follows:

The purpose of this bill is to reduce prescription drug costs and improve the quality of health care for qualified Hawaii residents by making amendments to improve the state discounted prescription drug program. Among other things, this bill:

(1) Renames the program, the Rx Plus Program (Program);

(2) Requires the Department of Human Services (DHS) to establish an Rx Plus preferred drug list;

(3) Directs the Pharmacy and Therapeutic Committee to review and recommend drugs for placement on the list based on a set of factors;

(4) Adds new definitions;

(5) Requires the Program to use manufacturer rebates and pharmacy discounts to reduce drug prices;

(6) Prohibits a contract administrator from receiving any compensation from any participating manufacturer;

(7) Requires DHS to conduct quality assurance activities;

(8) Specifies factors that the administrator must consider when negotiating the amount of the rebate from manufacturers;

(9) Requires DHS to release to the public those names of drug manufacturers that enter and those that do not enter into rebate agreements;

(10) Delays from January 1, 2005, to July 1, 2005, the date by which participating pharmacies must offer the secondary discounted price of a drug to Program participants;

(11) Prohibits DHS from imposing transaction charges on participating pharmacies; and

(12) Authorizes moneys from the Rx Plus Special Fund to be used to pay for contracted services.

Testifying in support of this bill were DHS, Department of Health, Policy Advisory Board for Elder Affairs, Hawaii State Commission on the Status of Women, ILWU Local 142, AARP Hawaii, Kokua Council, Public Health Committee of Faith Action for Community Equity, Hawaii Alliance for Retired Americans, and an individual. Longs Drug Stores supported the intent of this measure.

Your Committee has amended this bill by:

(1) Appropriating the sum of $400,000 for the Program;

(2) Changing the effective date to July 1, 2004; and

(3) Making technical, nonsubstantive amendments to correct drafting errors.

It is your Committee's intent that the provisions in:

(1) Section 346-317(a), Hawaii Revised Statutes (HRS), relating to the implementation of reimbursements to pharmacies; and

(2) Section 346-317(c), HRS, relating to pharmacy transaction fees,

are to begin on July 1, 2005, the secondary discount phase of the Program.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3237, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3237,

S.D. 1, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair