May 13, 2009, Introduced by Reps. Roy Schmidt, Meadows, Johnson, Slavens, Melton, Simpson, Haugh, Slezak, Ball, Corriveau, Young, Lipton, Marleau, Liss, Mayes, Scripps and Lisa Brown and referred to the Committee on Health Policy.
A bill to establish a bulk prescription drug purchasing
cooperative; to establish a prescription drug benefit plan for
certain residents of this state; to prescribe certain powers and
duties of certain state agencies and departments; and to provide
for the promulgation of rules.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) This act shall be known and may be cited as the
"Michigan prescription cooperative and gold benefit plan".
(2) For the purposes of this act, the words and phrases
defined in sections 3 to 7 have the meanings ascribed to them in
those sections.
Sec. 3. (1) "Administrator" means the administrator of the
gold benefit plan.
(2) "Committee" means the Michigan prescription cooperative
and gold benefit plan committee created in section 17.
(3) "Department" means the department of management and
budget.
(4) "Fund" means the Michigan bulk prescription drug
purchasing cooperative and gold benefit plan fund created in
section 19.
(5) "Gold benefit plan" means the Michigan bulk prescription
drug purchasing cooperative and gold benefit plan established in
section 9.
Sec. 5. (1) "Participating pharmacy" means a pharmacy or other
business that dispenses prescription drugs at retail, is licensed
under article 15 of the public health code, 1978 PA 368, MCL
333.16101 to 333.18838, and that voluntarily agrees to dispense
prescription drugs at the plan price under the gold benefit plan.
(2) "Pharmacy benefit manager" means an entity that, in
addition to being a prescription drug claims processor, negotiates
and executes contracts with pharmacies, manages preferred drug
lists, negotiates rebates with prescription drug manufacturers, and
serves as an intermediary between the gold benefit plan,
prescription drug manufacturers, and pharmacies.
(3) "Plan price" means the reimbursement rates and
prescription drug prices established by the administrator.
(4) "Prescriber" means that term as defined in section 17708
of the public health code, 1978 PA 368, MCL 333.17708, other than a
licensed veterinarian.
(5) "Prescription drug" means that term as defined in section
17708 of the public health code, 1978 PA 368, MCL 333.17708.
(6) "Prescription drug claims processor" means an entity that
processes and pays prescription drug claims, adjudicates pharmacy
claims, transmits prescription drug prices and claims data between
pharmacies and the gold benefit plan, and processes related
payments to pharmacies.
(7) "Prescription drug manufacturer" means manufacturer as
defined in section 17706 of the public health code, 1978 PA 368,
333.17706.
Sec. 7. (1) "Underinsured" means an individual who is a
resident of this state and who is covered by a health insurance
policy or certificate, health maintenance organization contract,
health care corporation certificate, or other health care payment
or benefits plan, which policy, certificate, contract, or plan pays
80% or less of prescription drug costs. Underinsured includes an
individual who is eligible for medicare part D prescription drug
coverage.
(2) "Uninsured" means an individual who is a resident of this
state and who does not have prescription drug coverage under a
health insurance policy or certificate, health maintenance
organization contract, health care corporation certificate, or
other public or private health care payment or benefits plan.
Sec. 9. The Michigan bulk prescription drug purchasing
cooperative and gold benefit plan is established in the department.
The gold benefit plan shall do all of the following:
(a) Purchase prescription drugs or reimburse pharmacies for
prescription drugs in order to receive discounted prices and
rebates.
(b) Make prescription drugs available at the lowest possible
cost to participants in the gold benefit plan.
(c) Maintain a list of prescription drugs recommended as the
most effective prescription drugs available at the best possible
prices.
Sec. 11. (1) The department shall appoint an administrator of
the gold benefit plan. In order to maximize the state's purchasing
power and reduce the costs of prescription drugs in this state, the
administrator shall combine the pharmaceutical purchasing power
from each purchasing participant of the gold benefit plan.
(2) The administrator shall do all of the following:
(a) Negotiate price discounts and rebates on prescription
drugs with prescription drug manufacturers.
(b) Purchase prescription drugs on behalf of participants in
the gold benefit plan.
(c) Maintain a preferred drug list based upon the
recommendation of the committee and a cost analysis that identifies
the most effective prescription drugs available at the best
possible prices.
(d) Analyze the cost-effectiveness and price differential of
utilizing a pharmacy benefits manager or prescription drug claims
processor to service the multiple programs covered under the gold
benefit plan.
(e) Issue a request for proposal and contract with an entity
to provide the functions of a prescription drug claims processor
for the gold benefit plan, including the ability to receive and
transmit prescriptions via electronic means in a manner that
complies with the electronic prescription drug program established
under the medicare improvements for patients and providers act of
2008, Public Law 110-275.
(f) Determine plan prices and reimburse pharmacies for
prescription drugs.
(g) After reviewing the recommendation under section 17, adopt
and implement a preferred drug list for the gold benefit plan.
(h) Develop a system for allocating and distributing the
operational costs of the gold benefit plan and any rebates obtained
to participants of the gold benefit plan.
(i) Cooperate with other states or regional consortia in the
bulk purchase of prescription drugs.
(j) Establish the terms and conditions for a pharmacy to
become a participating pharmacy. A pharmacy that is willing to
accept the terms and conditions established by the administrator
may apply to become a participating pharmacy in the gold benefit
plan.
(3) The administrator may do any of the following:
(a) Establish different reimbursement rates or prescription
drug prices for pharmacies in rural areas to maintain statewide
access for uninsured or underinsured individuals in the gold
benefit plan.
(b) Contract with a pharmacy benefit manager or prescription
drug claims processor to perform on behalf of the administrator any
of the duties required in subsection (1)(a), (b), and (c).
(4) The administrator shall not do any of the following:
(a) Establish a state-managed wholesale or retail drug
distribution or dispensing system.
(b) Require pharmacies to maintain or allocate separate
inventories for prescription drugs dispensed through the gold
benefit plan.
Sec. 13. (1) Except as otherwise provided in this section,
each agency or department that administers a program funded in
whole or in part by this state that provides pharmaceutical
benefits for, including, but not limited to, state employees,
retirees, teachers, elders, or prisoners shall participate in the
gold benefit plan. Unless the administrator and the department of
human services determine that it may participate, the state agency
that receives federal medicaid funds and is responsible for
implementing the state's medical assistance program shall not
participate in the gold benefit plan.
(2) Any entity that provides prescription drugs either
directly or indirectly through some form of coverage to residents
of this state may participate in the gold benefit plan and combine
its purchasing power with the purchasing power of this state.
(3) An underinsured or uninsured individual may participate in
the gold benefit plan.
(4) If the administrator determines that approval by the
centers for medicare and medicaid services is required before an
agency or department under subsection (1) may participate in the
gold benefit plan, then those programs are exempt from
participation in the gold benefit plan until such approval has been
granted. If the administrator determines that an agency or
department under subsection (1) is otherwise unable to participate
in the gold benefit plan, then that program is exempt from
participation in the gold benefit plan until the administrator
determines that the barrier to participation no longer exists.
Sec. 15. (1) An agency or department that participates in the
gold benefit plan under section 13(1) shall provide information
required by the department and the administrator to identify
participants of that agency or department in the gold benefit plan.
(2) An individual or entity described in section 13(2) or (3)
may apply to participate in the gold benefit plan. Participants
shall apply on an application provided by the department and shall
provide information required by the department and the
administrator.
(3) The department may charge each participant a nominal fee
to participate in the gold benefit plan. The department shall issue
a prescription drug identification card to each participant of the
gold benefit plan.
(4) The department shall provide a mechanism to calculate and
transmit the plan prices for prescription drugs to a participating
pharmacy. The participating pharmacy shall charge the participant
the plan price for a prescription drug.
(5) A participating pharmacy may charge a participant the
professional dispensing fee set by the department.
(6) Prescription drug identification cards issued under this
section shall contain the information necessary for proper claims
adjudication or transmission of plan price data.
Sec. 17. (1) The Michigan prescription cooperative and gold
benefit plan committee is created in the department of community
health. The committee shall consist of the administrator and 10
members appointed by the governor as follows:
(a) Three prescribers whose practice includes patients who are
participants of the gold benefit plan. A prescriber appointed under
this subdivision may include, but is not limited to, a prescriber
with expertise in mental health, a prescriber who specializes in
pediatrics, and a prescriber with experience in long-term care.
(b) Two prescribers who have earned a research doctorate from
a 4-year doctorate-granting university in the United States and who
have expertise in evidence-based prescribing or pharmacoeconomics.
(c) Three pharmacists from participating pharmacies. A
pharmacist appointed under this subdivision may include, but is not
limited to, a pharmacist with expertise in mental health drugs, a
pharmacist who specializes in pediatrics, and a pharmacist with
experience in long-term care.
(d) Two pharmacists who have earned a doctorate in pharmacy
from a 4-year doctorate-granting university in the United States
and who have expertise in evidence-based prescribing or
pharmacoeconomics.
(2) A member of the committee shall not be employed by a
prescription drug manufacturer or have any interest directly or
indirectly in the business of a prescription drug manufacturer to
avoid a conflict of interest. No more than 2 members appointed to
the committee shall be employed by the department of community
health. Members of the committee shall disclose any financial
relationship with a medical supply vendor, health care provider
organization, or any other commercial interest that may give rise
to a conflict of interest. The committee shall require that a
member of the committee with a direct or indirect interest in any
matter before the committee disclose the member's interest to the
committee and recuse himself or herself before the committee takes
any action on the matter.
(3) Members of the committee shall serve a term of 2 years.
Except as otherwise provided in this subsection, members serving on
the committee shall serve until a successor is appointed and
qualified. The governor shall designate 1 member of the committee
to serve as the chairperson of the committee. This member shall
serve as chairperson at the pleasure of the governor. An individual
appointed to serve as a prescriber or pharmacist member of the
committee may serve only while maintaining his or her professional
license in good standing. An individual prescriber's or
pharmacist's failure to maintain his or her professional license in
good standing immediately terminates that individual's membership
on the committee. For purposes of this subsection, a prescriber or
pharmacist is not maintaining a professional license in good
standing if the department imposes a sanction under article 15 of
the public health code, 1978 PA 368, MCL 333.16101 to 333.18838, on
the prescriber or pharmacist committee member. A vacancy on the
committee shall be filled in the same manner as the original
appointment. An individual appointed to fill a vacancy created
other than by expiration of a term shall be appointed for the
unexpired term of the member whom he or she is to succeed in the
same manner as the original appointment. A member may be
reappointed for additional terms.
(4) Members of the committee shall serve without compensation,
but shall be reimbursed for necessary travel and other expenses
pursuant to the standard travel regulations of the department.
(5) The committee shall develop and recommend to the
department and the administrator a preferred drug list that
identifies preferred choices of prescription drugs within
therapeutic classes for particular diseases and conditions,
including generic alternatives, for use in the gold benefit plan.
The committee shall conduct public hearings and use independent
evidence-based reviews on the effectiveness of prescription drugs
within drug classes to develop the preferred drug list. Subject to
this subsection, the committee shall establish procedures to
evaluate independent evidence-based reviews of prescription drugs
to assist in the development of the preferred drug list under this
subsection. The committee shall only utilize an independent
evidence-based review of a prescription drug if the review is based
upon the evidence of safety, efficacy, and effectiveness available
at the time of the review and includes a rigorous assessment of the
scientific evidence. In developing a preferred drug list under this
subsection, the committee shall identify the most clinically
effective prescription drug or drugs from among the drugs in the
reviewed drug class, including generic alternatives, or determine
that there is sufficient evidence of similar safety, efficacy, and
effectiveness for the prescription drugs in a drug class to allow
therapeutic interchange of the drugs within that drug class. The
committee shall base its development and recommendation of a
preferred drug list under this subsection only upon available
evidence and not on cost considerations.
(6) The department of community health, in consultation with
the committee, may promulgate rules governing the organization,
operation, and procedures of the committee. The department of
community health shall review its policies and procedures and
consider means to increase and facilitate public comment.
(7) A majority of the members of the committee serving
constitute a quorum for the transaction of business. The committee
shall approve a final action of the committee by a majority vote of
the members. A member of the committee must be present at a meeting
of the committee in order to vote. A member shall not delegate his
or her responsibilities to another individual.
(8) The committee shall meet at the call of the chairperson
and as otherwise provided in the rules promulgated under this
section. The committee may meet at any location within this state.
A meeting of the committee is subject to the open meetings act,
1976 PA 267, MCL 15.261 to 15.275. The committee shall post a
notice of the meeting on the department of community health's
website and the gold benefit plan's website, if any, 14 days before
each meeting date. By January 31 of each year, the committee shall
make available the committee's regular meeting schedule and meeting
locations for that year on the department of community health's
website and the gold benefit plan's website, if any. The committee
may make inquiries, conduct studies and investigations, hold
hearings, and receive comments from the public.
Sec. 19. (1) The Michigan bulk prescription drug purchasing
cooperative and gold benefit plan fund is created within the state
treasury.
(2) The state treasurer may receive money or other assets from
any source for deposit into the fund. The state treasurer shall
direct the investment of the fund. The state treasurer shall credit
to the fund interest and earnings from fund investments.
(3) Money in the fund at the close of the fiscal year shall
remain in the fund and shall not lapse to the general fund.
(4) The department shall be the administrator of the fund for
auditing purposes.
(5) The department shall expend money from the fund, upon
appropriation, only for 1 or more of the following purposes:
(a) To purchase prescription drugs.
(b) To reimburse pharmacies for prescription drugs.
(c) To reimburse the department for the costs of administering
the gold benefit plan, including contracted services costs,
computer costs, professional dispensing fees paid to participating
pharmacies, and other reasonable gold benefit plan costs.
(d) To reimburse the department of community health for the
costs of administering the committee and reimbursing members of the
committee as provided in section 17.
Sec. 21. The department may promulgate rules pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, that are necessary to implement this act, including, but
not limited to, rules regarding the operation and application of
the gold benefit plan and procedures for issuing prescription drug
identification cards for the plan.