6368-S AMS PARL S4361.1

6368-S AMS PARL S4361.1

SSB 6368 - S AMD 603

By Senator Parlette

NOT ADOPTED 02/18/02

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that access to prescription drugs is vital to the health of many Washington residents, but that recent substantial increases in drug expenditures threaten the overall viability of the state's medical assistance program and cannot be sustained. For those people not currently eligible for this program, or otherwise lacking prescription drug coverage, the high costs may limit their access to medications altogether. The legislature therefore intends to implement strategies to reduce the cost of providing prescription drugs while maintaining and improving access to high quality prescription drug therapies.

Sec. 2. RCW 74.09.010 and 1990 c 296 s 6 are each amended to read as follows:

((~~As used in this chapter:~~)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Children's health program" means the health care services program provided to children under eighteen years of age and in households with incomes at or below the federal poverty level as annually defined by the federal department of health and human services as adjusted for family size, and who are not otherwise eligible for medical assistance or the limited casualty program for the medically needy.

(2) "Committee" means the ((~~children's health services~~)) pharmacy and therapeutics committee created in ((~~section 3 of this act~~)) section 5 of this act.

(3) "County" means the board of county commissioners, county council, county executive, or tribal jurisdiction, or its designee. A combination of two or more county authorities or tribal jurisdictions may enter into joint agreements to fulfill the requirements of RCW 74.09.415 through 74.09.435.

(4) "Department" means the department of social and health services.

(5) "Department of health" means the Washington state department of health created pursuant to RCW 43.70.020.

(6) "Internal management" means the administration of medical assistance, medical care services, the children's health program, and the limited casualty program.

(7) "Limited casualty program" means the medical care program provided to medically needy persons as defined under Title XIX of the federal social security act, and to medically indigent persons who are without income or resources sufficient to secure necessary medical services.

(8) "Medical assistance" means the federal aid medical care program provided to categorically needy persons as defined under Title XIX of the federal social security act.

(9) "Medical care services" means the limited scope of care financed by state funds and provided to general assistance recipients, and recipients of alcohol and drug addiction services provided under chapter 74.50 RCW.

(10) "Nursing home" means nursing home as defined in RCW 18.51.010.

(11) "Poverty" means the federal poverty level determined annually by the United States department of health and human services, or successor agency.

(12) "Preferred drug" means the department's drug of choice within a selected therapeutic class, as determined by the process established in section 3 of this act.

(13) "Prior authorization" means a process requiring the prescriber or the dispenser to verify with the state medicaid agency or its contractor that the proposed medical use of a particular medicine for a patient meets predetermined criteria for payment by the program.

(14) "Secretary" means the secretary of social and health services.

(15) "Therapeutic class" means a group of drugs used for the diagnosis, treatment, remediation, or cure of a specific order or disease.

NEW SECTION. Sec. 3. A new section is added to chapter 74.09 RCW to read as follows:

The department shall begin implementation of a preferred drug program pursuant to 42 U.S.C. Sec. 1396r-8 by January 1, 2003. The program shall apply only to fee-for-service medical assistance clients, except those fee-for-service clients who receive care from a delivery system operated by a health maintenance organization as defined in RCW 48.46.020. In implementing the program, the department may adopt rules, and must:

(1) Identify for initial consideration those classes of drugs for which it annually has the greatest aggregate fee-for-service expenditures, excluding from consideration any of the following classes, which shall be exempt from any preferred drug list:

(a) Antipsychotics;

(b) Chemotherapy;

(d) Immunosuppressants; and

(e) Hypoglycemia rescue agents;

(2) Contract with one or more qualified, independent entities to determine which drugs within each of the identified therapeutic class are essentially equal in terms of safety, efficacy, and outcomes. The contracted entity must base its determinations on the strength of scientific evidence and standards of practice that include, but are not limited to:

(a) Assessing peer-reviewed medical literature, including randomized clinical trials (especially drug comparison studies), pharmacoeconomic studies, and outcomes research data;

(b) Employing published practice guidelines, developed by an acceptable evidenced-based process;

(c) Comparing the efficacy as well as the type and frequency of side effects and potential drug interactions among alternative drug products in the class under review;

(d) Assessing the likely impact of a drug product on patient compliance when compared to alternative products; and

(e) Thoroughly evaluating the benefits, risks, and potential outcomes for patients, including adverse drug events;

(3) Submit the determinations made under subsection (2) of this section to the committee established in section 5 of this act, which shall incorporate them into recommendations to the department;

(4) Develop a preferred drug list based on the recommendations of the committee. For each therapeutic class considered, the list must identify the drugs determined to be essentially equal, and from among those, which ones are the preferred drugs. The department, based on the recommendations of the committee, may revise the preferred drug list annually, or as necessary to meet the objectives of this act;

(a) In developing the preferred drug list, the department may negotiate, directly or through contract with an outside agency, supplemental rebates from pharmaceutical manufacturers that are in addition to those required by Title XIX of the social security act and at no less than ten percent of the average manufacturer price as defined in 42 U.S.C. Sec. 1936 on the last day of a quarter unless the federal or supplemental rebate, or both, equals or exceeds twenty-five percent, unless the department determines that specific products are competitive at lower rebate percentages. There is no upper limit on the supplemental rebates the agency may negotiate.

(b) Agreement to pay the minimum supplemental rebate percentage will guarantee a manufacturer that the department will consider a product for inclusion as a preferred drug. However, a pharmaceutical manufacturer is not guaranteed placement as a preferred drug by simply paying the minimum supplemental rebate. Department decisions will be made on the clinical efficacy of a drug and recommendations of the pharmacy and therapeutics committee, as well as the price of competing products minus federal and state rebates.

(5) Distribute the initial preferred drug list, and any subsequent revisions, to every provider with prescriptive authority with whom it has a core provider agreement, including with it a description of how the list was developed, and how it will be used.

NEW SECTION. Sec. 4. A new section is added to chapter 74.09 RCW to read as follows:

Reimbursement of any nonpreferred drug is subject to prior authorization. A preferred drug may be subject to prior authorization where it has a narrow therapeutic indication, presents a risk of inappropriate utilization, or poses significant safety concerns. A preferred drug may not be subject to prior authorization for the sole reason that it costs more than other drugs in its therapeutic class.

NEW SECTION. Sec. 5. A new section is added to chapter 74.09 RCW to read as follows:

(1) The pharmacy and therapeutics committee is established to assist the department in the development and implementation of a preferred drug program.

(2) The committee shall be comprised as specified in 42 U.S.C. Sec. 1396r-8, and consist of nine members, to be appointed by the governor as follows:

(a) Four physicians licensed under chapter 18.57 or 18.71 RCW and actively engaged in the practice of medicine, at least one of whom is employed by a carrier as defined in RCW 48.43.005, chosen from a list of nominees provided by the Washington state medical association;

(b) One advanced registered nurse practitioner licensed in this state and actively engaged in the practice of nursing chosen from a list of nominees provided by the Washington state nurses association;

(c) Three pharmacists licensed in this state and actively engaged in the practice of pharmacy chosen from a list of nominees provided by the Washington state pharmacists association; and

(d) One person with background experience, education, or expertise in pharmacoeconomics.

(3) No person shall be appointed to or remain on the committee who is employed by a pharmaceutical manufacturer, or who receives or has received remuneration, grants, or other thing of economic value from a pharmaceutical manufacturer if it could reasonably be expected that the remuneration, grant, or thing of economic value would influence the vote, action, or judgment of the person as a member of the committee.

(4) Committee members serve staggered three-year terms. Of the initial members, one physician, the advanced registered nurse practitioner, and one pharmacist are each appointed for two-year terms, and one physician, one pharmacist, and the pharmacoeconomics representative are each appointed for one-year terms. The remaining committee members are appointed for three-year terms. Members may be reappointed for a period not to exceed three three-year terms. A committee member whose term has expired will continue to serve until his or her successor is appointed. Vacancies on the committee must be filled for the balance of the unexpired term from nominee lists for the appropriate committee category as under subsection (2) of this section.

(5) Committee members must select a chair and a vice-chair on an annual basis from the committee membership.

(6) The department must provide staff support to the committee. Committee members serve without compensation, but must be reimbursed for expenses pursuant to RCW 43.03.050 and 43.03.060.

(7) The members of the committee are immune from civil liability for any official acts performed in good faith as members of the committee.

(8) The committee must:

(a) Recommend to the department which drugs it should identify as its preferred drugs from among those determined, pursuant to section 3(2) of this act, to be essentially equal in terms of safety, efficacy, and outcomes. In making these recommendations, the committee must consider, among other factors, the relative cost-effectiveness of the drugs being considered, the impact of each drug on the state's overall health care expenditures, and the efforts of each drug's manufacturer to ensure that all Washington residents have access to medically necessary medicines at an affordable price. The committee must review the preferred drug list at least annually, and recommend to the department any changes it deems appropriate to meet the objectives of this act;

(b) Make recommendations regarding the rules to be adopted by the department to implement the preferred drug program; and

(c) Make recommendations regarding the preferred drug list development and review process, and program implementation, as necessary to achieve the objectives of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 74.09 RCW to read as follows:

Proprietary information submitted upon request of the department or the committee by any vendor or pharmaceutical manufacturer for the purposes of this act are exempt from public inspection and copying under chapter 42.17 RCW when necessary to prevent trade secrets or prevent unfair competition.

Sec. 7. RCW 42.30.110 and 2001 c 216 s 1 are each amended to read as follows:

(1) Nothing contained in this chapter may be construed to prevent a governing body from holding an executive session during a regular or special meeting:

(a) To consider matters affecting national security;

(b) To consider the selection of a site or the acquisition of real estate by lease or purchase when public knowledge regarding such consideration would cause a likelihood of increased price;

(c) To consider the minimum price at which real estate will be offered for sale or lease when public knowledge regarding such consideration would cause a likelihood of decreased price. However, final action selling or leasing public property shall be taken in a meeting open to the public;

(d) To review negotiations on the performance of publicly bid contracts when public knowledge regarding such consideration would cause a likelihood of increased costs;

(e) To consider, in the case of an export trading company, financial and commercial information supplied by private persons to the export trading company;

(f) To receive and evaluate complaints or charges brought against a public officer or employee. However, upon the request of such officer or employee, a public hearing or a meeting open to the public shall be conducted upon such complaint or charge;

(g) To evaluate the qualifications of an applicant for public employment or to review the performance of a public employee. However, subject to RCW 42.30.140(4), discussion by a governing body of salaries, wages, and other conditions of employment to be generally applied within the agency shall occur in a meeting open to the public, and when a governing body elects to take final action hiring, setting the salary of an individual employee or class of employees, or discharging or disciplining an employee, that action shall be taken in a meeting open to the public;

(h) To evaluate the qualifications of a candidate for appointment to elective office. However, any interview of such candidate and final action appointing a candidate to elective office shall be in a meeting open to the public;

(i) To discuss with legal counsel representing the agency matters relating to agency enforcement actions, or to discuss with legal counsel representing the agency litigation or potential litigation to which the agency, the governing body, or a member acting in an official capacity is, or is likely to become, a party, when public knowledge regarding the discussion is likely to result in an adverse legal or financial consequence to the agency.

This subsection (1)(i) does not permit a governing body to hold an executive session solely because an attorney representing the agency is present. For purposes of this subsection (1)(i), "potential litigation" means matters protected by RPC 1.6 or RCW 5.60.060(2)(a) concerning:

(A) Litigation that has been specifically threatened to which the agency, the governing body, or a member acting in an official capacity is, or is likely to become, a party;

(B) Litigation that the agency reasonably believes may be commenced by or against the agency, the governing body, or a member acting in an official capacity; or

(C) Litigation or legal risks of a proposed action or current practice that the agency has identified when public discussion of the litigation or legal risks is likely to result in an adverse legal or financial consequence to the agency;

(j) To consider, in the case of the state library commission or its advisory bodies, western library network prices, products, equipment, and services, when such discussion would be likely to adversely affect the network's ability to conduct business in a competitive economic climate. However, final action on these matters shall be taken in a meeting open to the public;

(k) To consider, in the case of the state investment board, financial and commercial information when the information relates to the investment of public trust or retirement funds and when public knowledge regarding the discussion would result in loss to such funds or in private loss to the providers of this information;

(l) To consider, in the case of the pharmacy and therapeutics committee established in section 5 of this act, proprietary or confidential nonpublished information that relates to the development or revision of the preferred drug list or the designation of a drug for prior authorization.

(2) Before convening in executive session, the presiding officer of a governing body shall publicly announce the purpose for excluding the public from the meeting place, and the time when the executive session will be concluded. The executive session may be extended to a stated later time by announcement of the presiding officer.

NEW SECTION. Sec. 8. (1) By January 1, 2003, the department of social and health services shall submit to the governor and the legislature a progress report regarding the implementation of the preferred drug program.

(2) Beginning January 1, 2004, and by January 1st of each year through 2006, the department shall submit to the governor and the legislature a report on the effect of the preferred drug program. The report must address whether the programs have succeeded in promoting improved clinical outcomes and cost-effective drug utilization, and may present recommendations for program modifications, or for additional strategies that should be pursued to promote appropriate and cost-effective utilization of prescription drugs by residents of the state of Washington.

NEW SECTION. Sec. 9. A new section is added to chapter 74.09 RCW to read as follows:

The department shall submit and, upon approval, implement a section 1115 research and demonstration waiver request to the federal centers for medicare and medicaid services to establish a medicaid senior prescription drug assistance program. The program shall:

(1) Cover persons age sixty-five years old or older with household incomes up to two hundred percent of the federal poverty level who have no medicare supplement policy or retiree health benefit plan that covers drugs;

(2) Provide a pharmacy benefit as comprehensive as that provided in the current Washington medicaid state plan; and

(3) Include reasonable enrollee cost sharing.

The department shall limit enrollment as necessary to prevent an overexpenditure of the program's appropriation."

SSB 6368 - S AMD 603

By Senator Parlette

NOT ADOPTED 02/18/02

On page 1, line 2 of the title, after "system;" strike the remainder of the title and insert "amending RCW 74.09.010 and 42.30.110; adding new sections to chapter 74.09 RCW; and creating new sections."