HF 3266

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to health; giving the commissioner of 
  1.3             administration authority to negotiate contract prices 
  1.4             for all prescription drugs sold in Minnesota; allowing 
  1.5             the commissioner of administration to charge a fee; 
  1.6             requiring certain disclosures by purchasers of 
  1.7             prescription drugs; proposing coding for new law in 
  1.8             Minnesota Statutes, chapters 16B and 62J. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  [16B.93] [DEFINITIONS.] 
  1.11     Subdivision 1.  [APPLICABILITY.] For purposes of sections 
  1.12  16B.93 to 16B.97, the following definitions apply. 
  1.13     Subd. 2.  [CONTRACTOR.] "Contractor" means the individual, 
  1.14  business entity, or other private organization who is awarded 
  1.15  the contract by the commissioner to negotiate the prices for 
  1.16  prescription drugs pursuant to section 16B.94, subdivision 1. 
  1.17     Subd. 3.  [MULTISTATE PHARMACEUTICAL CONTRACTING ALLIANCE 
  1.18  OR ALLIANCE.] "Multistate pharmaceutical contracting alliance" 
  1.19  or "alliance" means the alliance established and administered by 
  1.20  the commissioner of administration under the authority granted 
  1.21  in section 471.59. 
  1.22     Subd. 4.  [MANUFACTURER.] "Manufacturer" means a 
  1.23  manufacturer as defined in section 151.44, paragraph (c). 
  1.24     Subd. 5.  [PRESCRIPTION DRUG.] "Prescription drug" means a 
  1.25  drug as defined in section 151.44, paragraph (d). 
  1.26     Subd. 6.  [PURCHASER.] "Purchaser" means a pharmacy as 
  1.27  defined in section 151.01, subdivision 2, and includes health 
  2.1   maintenance organizations and hospitals. 
  2.2      Subd. 7.  [REBATE.] "Rebate" means any money, incentives, 
  2.3   or credits given to a purchaser by a manufacturer or seller for 
  2.4   purchasing a prescription drug. 
  2.5      Subd. 8.  [SELLER.] "Seller" means any person, other than a 
  2.6   manufacturer, who sells or distributes drugs to purchasers or 
  2.7   other sellers within the state. 
  2.8      Subd. 9.  [SINGLE SOURCE DRUG.] "Single source drug" means 
  2.9   a prescription drug for which there is no other drug product 
  2.10  sold or marketed in the state which the FDA has rated as 
  2.11  therapeutically equivalent and has determined is 
  2.12  pharmaceutically equivalent and bioequivalent. 
  2.13     Subd. 10.  [STATE DRUG FORMULARY.] "State drug formulary" 
  2.14  means a listing of drugs of proven safety, efficacy, and 
  2.15  cost-effectiveness established by the commissioner of human 
  2.16  services under section 256.996. 
  2.17     Sec. 2.  [16B.94] [PRICE CONTRACT FOR PRESCRIPTION DRUGS ON 
  2.18  THE STATE FORMULARY.] 
  2.19     Subdivision 1.  [MINNESOTA POOLED CONTRACT FOR PRESCRIPTION 
  2.20  DRUG DISCOUNTS.] (a) The commissioner shall negotiate price 
  2.21  contracts for prescription drugs listed on the state drug 
  2.22  formulary.  The commissioner may contract with an individual, 
  2.23  business entity, or other private organization to negotiate the 
  2.24  contract price as required under this subdivision.  The 
  2.25  commissioner may negotiate a price differential based on volume 
  2.26  purchasing. 
  2.27     (b) The contract price for each drug on the state drug 
  2.28  formulary, with the exception of single source drugs, shall be 
  2.29  based on the average manufacturer's price minus 15 percent, the 
  2.30  best competitive bid price, or a negotiated price, whichever is 
  2.31  lowest.  In the case of single source drugs, the contract price 
  2.32  shall be negotiated.  The initial average manufacturer's price 
  2.33  is the purchaser's actual acquisition cost as of March 1, 1996.  
  2.34  For purposes of computing the contract price in 1997 and each 
  2.35  year thereafter for those drugs on the state drug formulary, the 
  2.36  commissioner or contractor shall not recognize increases in the 
  3.1   average manufacturer's contracted price that exceed the rate of 
  3.2   increase in the Consumer Price Index for All Items (U.S. city 
  3.3   average) (CPI-U). 
  3.4      (c) Nothing in this section shall prohibit the commissioner 
  3.5   or contractor from granting multiple awards. 
  3.6      Subd. 2.  [ADMINISTRATIVE COSTS.] The commissioner may 
  3.7   charge a fee to any business entity with whom the commissioner 
  3.8   negotiates a contract under subdivision 1 sufficient to cover 
  3.9   the commissioner's expenses in negotiating and administering the 
  3.10  contract.  The amount of the fee need not be set by rule.  Fee 
  3.11  receipts must be deposited in the state treasury and credited to 
  3.12  a special account.  Money in the account is appropriated to the 
  3.13  commissioner to pay the costs incurred. 
  3.14     Sec. 3.  [16B.95] [STATE CONTRACT PRICE.] 
  3.15     Subdivision 1.  [MANUFACTURER REQUIREMENT.] The contract 
  3.16  price for all prescription drugs listed on the state formulary 
  3.17  that the commissioner has negotiated shall be made available to 
  3.18  any Minnesota purchaser by any manufacturer or seller who 
  3.19  participates in the alliance.  Any manufacturer who does not 
  3.20  extend the negotiated contract price to a Minnesota purchaser 
  3.21  shall be prohibited from participating in the alliance. 
  3.22     Subd. 2.  [PURCHASER REQUIREMENT.] The commissioner of 
  3.23  administration may require any Minnesota purchaser who plans on 
  3.24  purchasing prescription drugs at the contract price negotiated 
  3.25  by the commissioner of administration to submit any information 
  3.26  deemed necessary by the commissioner regarding prescription drug 
  3.27  purchase projections to assist the commissioner in the contract 
  3.28  price negotiations. 
  3.29     Subd. 3.  [PURCHASING PRESCRIPTION DRUGS NOT INCLUDED ON 
  3.30  THE STATE DRUG FORMULARY.] Nothing in this section shall prevent 
  3.31  a purchaser from purchasing a prescription drug that is not 
  3.32  included on the state drug formulary. 
  3.33     Sec. 4.  [16B.96] [NONDISCRIMINATION.] 
  3.34     No insurer or health plan company shall discriminate 
  3.35  against a purchaser for participating in the multistate 
  3.36  pharmaceutical contracting alliance or for taking advantage of 
  4.1   the alliance contracting price. 
  4.2      Sec. 5.  [62J.67] [PRESCRIPTION DRUG PRICE DISCLOSURE.] 
  4.3      Each health plan company and hospitals licensed under 
  4.4   chapter 144 must annually submit to the commissioner of health 
  4.5   the contract price paid for each prescription drug listed on its 
  4.6   drug formulary.  The contract price submitted must include any 
  4.7   discount or rebate, including any fee associated with education, 
  4.8   data collection, research, training, or market share movement, 
  4.9   received from a manufacturer as defined under section 151.44, 
  4.10  paragraph (c), or wholesale drug distributor as defined under 
  4.11  section 151.44, paragraph (b).  The commissioner shall make this 
  4.12  information available to the public through the information 
  4.13  clearinghouse.