2003 Minnesota Statutes

     256.954 Prescription drug discount program. 

    Subdivision 1.    Establishment; administration.  The 
 commissioner of human services shall establish and administer 
 the prescription drug discount program, effective July 1, 2005.  

    Subd. 2.    Commissioner's authority.  The commissioner 
 shall administer a drug rebate program for drugs purchased 
 according to the prescription drug discount program.  The 
 commissioner shall require a rebate agreement from all 
 manufacturers of covered drugs as defined in section 256B.0625, 
 subdivision 13.  For each drug, the amount of the rebate shall 
 be equal to the rebate as defined for purposes of the federal 
 rebate program in United States Code, title 42, section 
 1396r-8.  The rebate program shall utilize the terms and 
 conditions used for the federal rebate program established 
 according to section 1927 of title XIX of the federal Social 
 Security Act. 

    Subd. 3.    Definitions.  For the purpose of this 
 section, the following terms have the meanings given them. 

    (a) "Commissioner" means the commissioner of human services.

    (b) "Manufacturer" means a manufacturer as defined in 
 section 151.44, paragraph (c). 

    (c) "Covered prescription drug" means a prescription drug 
 as defined in section 151.44, paragraph (d), that is covered 
 under medical assistance as described in section 256B.0625, 
 subdivision 13, and that is provided by a manufacturer that has 
 a fully executed rebate agreement with the commissioner under 
 this section and complies with that agreement.  

    (d) "Health carrier" means an insurance company licensed 
 under chapter 60A to offer, sell, or issue an individual or 
 group policy of accident and sickness insurance as defined in 
 section 62A.01; a nonprofit health service plan corporation 
 operating under chapter 62C; a health maintenance organization 
 operating under chapter 62D; a joint self-insurance employee 
 health plan operating under chapter 62H; a community integrated 
 systems network licensed under chapter 62N; a fraternal benefit 
 society operating under chapter 64B; a city, county, school 
 district, or other political subdivision providing self-insured 
 health coverage under section 461.617 or sections 471.98 to 
 471.982; and a self-funded health plan under the Employee 
 Retirement Income Security Act of 1974, as amended. 

    (e) "Participating pharmacy" means a pharmacy as defined in 
 section 151.01, subdivision 2, that agrees to participate in the 
 prescription drug discount program. 

    (f) "Enrolled individual" means a person who is eligible 
 for the program under subdivision 4 and has enrolled in the 
 program according to subdivision 5. 

    Subd. 4.    Eligible persons.  To be eligible for the 
 program, an applicant must: 

    (1) be a permanent resident of Minnesota as defined in 
 section 256L.09, subdivision 4; 

    (2) not be enrolled in medical assistance, general 
 assistance medical care, MinnesotaCare, or the prescription drug 
 program under section 256.955; 

    (3) not be enrolled in and have currently available 
 prescription drug coverage under a health plan offered by a 
 health carrier or under a pharmacy benefit program offered by a 
 pharmaceutical manufacturer; 

    (4) not be enrolled in and have currently available 
 prescription drug coverage under a Medicare supplement plan, as 
 defined in sections 62A.31 to 62A.44, or policies, contracts, or 
 certificates that supplement Medicare issued by health 
 maintenance organizations or those policies, contracts, or 
 certificates governed by section 1833 or 1876 of the federal 
 Social Security Act, United States Code, title 42, section 1395, 
 et seq., as amended; and 

    (5) have a gross household income that does not exceed 250 
 percent of the federal poverty guidelines. 

    Subd. 5.    Application procedure.  (a) Applications and 
 information on the program must be made available at county 
 social services agencies, health care provider offices, and 
 agencies and organizations serving senior citizens.  Individuals 
 shall submit applications and any information specified by the 
 commissioner as being necessary to verify eligibility directly 
 to the commissioner.  The commissioner shall determine an 
 applicant's eligibility for the program within 30 days from the 
 date the application is received.  Eligibility begins the month 
 after approval. 

    (b) The commissioner shall develop an application form that 
 does not exceed one page in length and requires information 
 necessary to determine eligibility for the program. 

    Subd. 6.    Participating pharmacy.  According to a 
 valid prescription, a participating pharmacy must sell a covered 
 prescription drug to an enrolled individual at the pharmacy's 
 usual and customary retail price, minus an amount that is equal 
 to the rebate amount described in subdivision 8, plus the amount 
 of any administrative fee and switch fee established by the 
 commissioner under subdivision 10.  Each participating pharmacy 
 shall provide the commissioner with all information necessary to 
 administer the program, including, but not limited to, 
 information on prescription drug sales to enrolled individuals 
 and usual and customary retail prices. 

    Subd. 7.    Notification of rebate amount.  The 
 commissioner shall notify each drug manufacturer, each calendar 
 quarter or according to a schedule to be established by the 
 commissioner, of the amount of the rebate owed on the 
 prescription drugs sold by participating pharmacies to enrolled 
 individuals. 

    Subd. 8.    Provision of rebate.  To the extent that a 
 manufacturer's prescription drugs are prescribed to a resident 
 of this state, the manufacturer must provide a rebate equal to 
 the rebate provided under the medical assistance program for any 
 prescription drug distributed by the manufacturer that is 
 purchased by an enrolled individual at a participating 
 pharmacy.  The manufacturer must provide full payment within 30 
 days of receipt of the state invoice for the rebate, or 
 according to a schedule to be established by the commissioner.  
 The commissioner shall deposit all rebates received into the 
 Minnesota prescription drug dedicated fund established under 
 subdivision 11.  The manufacturer must provide the commissioner 
 with any information necessary to verify the rebate determined 
 per drug. 

    Subd. 9.    Payment to pharmacies.  The commissioner 
 shall distribute on a biweekly basis an amount that is equal to 
 an amount collected under subdivision 8 to each participating 
 pharmacy based on the prescription drugs sold by that pharmacy 
 to enrolled individuals, minus the amount of the administrative 
 fee established by the commissioner under subdivision 10. 

    Subd. 10.    Administrative fee; switch fee.  (a) The 
 commissioner shall establish a reasonable administrative fee 
 that covers the commissioner's expenses for enrollment, 
 processing claims, and distributing rebates under this program. 

    (b) The commissioner shall establish a reasonable switch 
 fee that covers expenses incurred by pharmacies in formatting 
 for electronic submission claims for prescription drugs sold to 
 enrolled individuals. 

    Subd. 11.    Dedicated fund; creation; use of fund.  (a) 
 The Minnesota prescription drug dedicated fund is established as 
 an account in the state treasury.  The commissioner of finance 
 shall credit to the dedicated fund all rebates paid under 
 subdivision 8, any federal funds received for the program, and 
 any appropriations or allocations designated for the fund.  The 
 commissioner of finance shall ensure that fund money is invested 
 under section 11A.25.  All money earned by the fund must be 
 credited to the fund.  The fund shall earn a proportionate share 
 of the total state annual investment income. 

    (b) Money in the fund is appropriated to the commissioner 
 of human services to reimburse participating pharmacies for 
 prescription drug discounts provided to enrolled individuals 
 under this section, to reimburse the commissioner of human 
 services for costs related to enrollment, processing claims, 
 distributing rebates, and for other reasonable administrative 
 costs related to administration of the prescription drug 
 discount program, and to repay the appropriation provided for 
 this section.  The commissioner must administer the program so 
 that the costs total no more than funds appropriated plus the 
 drug rebate proceeds. 

    Subd. 12.    Expiration.  This section expires upon the 
 effective date of an expanded prescription drug benefit under 
 Medicare. 

    HIST: 1Sp2003 c 14 art 12 s 4 

*   NOTE:  This section, as added by Laws 2003, First Special 
*Session chapter 14, article 12, section 4, is effective July 1, 
*2005.  Laws 2003, First Special Session chapter 14, article 12, 
*section 4, the effective date.