[atlas:bill]

AN ACT Relating to the Washington pharmacy access initiative; amending RCW 41.05.026; adding a new chapter to Title 70 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Administrator" means the Washington pharmacy access initiative administrator, who also holds the position of administrator of the Washington state health care authority.

(2) "Eligible person" means a resident of the state who is:

(a) Ineligible for medicaid prescription drug benefits;

(b) Ineligible for, or not receiving, or both, a prescription drug benefit under a medicare supplemental policy or any other third-party payer prescription drug benefit;

(c) Not confined or residing in a government-operated institution, unless he or she meets eligibility criteria adopted by the administrator;

(d)(i) At least sixty-five years old; or (ii) between the ages of nineteen and sixty-four who is otherwise eligible for benefits under Title II of the social security act (federal old age, survivors, and disability insurance benefits); and

(e) A person whose gross family income at the time of enrollment does not exceed two hundred percent of the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services.

(3) "Labeler" means an entity or person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale, and that has a labeler code from the federal food and drug administration under 21 C.F.R. Sec. 207.20 (1999).

(4) "Mail order program" means a program to dispense prescription drugs by postal delivery service designated and administered by the Washington state health care authority, and any entity with which it contracts, upon an enrollee's submission of a prescription and the applicable copayment.

(5) "Maintenance drug" means a prescription drug prescribed to an individual for a chronic condition, the use of which is medically necessary for a consecutive period of ninety days or longer.

(6) "Manufacturer" means a manufacturer of prescription drugs and includes a subsidiary or affiliate of a manufacturer.

(7) "Pharmacy benefit manager" means an entity under contract with the Washington state health care authority, whether organized on a for-profit or a not-for-profit basis, contracted to manage the Washington prescription drug insurance plan established by sections 3 through 9 of this act.

(8) "Pharmacy services" means services provided by a pharmacist, consistent with chapter 18.64 RCW, intended to assist an enrollee in the safe, appropriate, and cost-effective use of drugs that he or she has been prescribed. These services may include but are not limited to disease management, case management, education and counseling, special pharmaceutical packaging, and medication compliance programs.

(9) "Premium" means a periodic payment, based upon gross family income, that an individual or a financial sponsor makes to the plan as consideration for an eligible person's enrollment in the plan.

(10) "Prescription drug" means any drug required by state or federal law or regulation to be dispensed only by a prescription, including finished dosage forms and active ingredients subject to section 503(b) of the federal food, drug, and cosmetic act.

(11) "Program" means the prescription drug price program created in section 16 of this act.

(12) "Retail pharmacy" means a retail pharmacy or other business licensed to dispense prescription drugs in this state.

(13) "Subsidy" means the difference between the full cost of participation in the plan and the amount determined to be the enrollee's responsibility under section 4(3) of this act.

(14) "Washington prescription drug insurance plan" or "plan" means the plan for providing coverage for prescription drugs and pharmacy services established in sections 3 through 9 of this act.

NEW SECTION. Sec. 2. (1) The Washington pharmacy access initiative is established within the Washington state health care authority. The administrative head and appointing authority of the initiative is the administrator of the Washington state health care authority. The initiative includes the following components:

(a) A subsidized prescription drug insurance plan for seniors and the disabled, designed and implemented pursuant to sections 3 through 9 of this act;

(b) Prescription drug information and education grants awarded to local organizations pursuant to section 10 of this act;

(c) A uniform formulary of prescription drugs and a system for prescription drug utilization review for state-purchased health care programs as provided in section 13 of this act. In consultation with appropriate state agencies, the administrator may determine the extent to which the formulary or prescription drug utilization review will apply to each state-purchased health care program;

(d) A system of academic detailing and consumer counterdetailing that educates physicians and other prescribers and consumers on the therapeutic and cost-effective utilization of prescription drugs. In developing this, the administrator shall:

(i) First assess current private and public sector academic detailing and consumer counterdetailing activities in Washington state. The system developed under this subsection should be designed to complement, coordinate, and strengthen these existing activities; and

(ii) Ensure that the system developed under this subsection is consistent with and supports successful implementation of the formulary developed pursuant to section 13 of this act and complements the grants awarded pursuant to section 10 of this act;

(e) Recommendations for continuing medical education opportunities for physicians and other health care professionals who prescribe, dispense, or administer prescription drugs. Any continuing medical education recommended or offered as a result of efforts under this section must ensure that information presented to attendees regarding utilization of prescription drugs is unbiased;

(f) Disease management pilot projects, as provided in section 14 of this act; and

(g) The prescription drug price program, implemented pursuant to sections 16 through 21 of this act.

(2) In carrying out his or her duties under this act, the administrator shall request the participation of the department of social and health services, the department of health, the state board of health, the department of corrections, the department of labor and industries, the office of the insurance commissioner, physicians, advanced registered nurse practitioners, hospitals, pharmacists, the state board of pharmacy and any other appropriate licensing boards, consumer representatives, health plans as defined in RCW 48.43.005, pharmacy benefits management companies, self-insured employer sponsored health benefits plans, and any other interested party.

(3) In carrying out his or her duties under this act, the administrator may:

(a) Contract with third parties for services necessary to carry out the administrator's activities under this act where contracting will promote economy, avoid duplication of effort, and make the best use of available expertise. Any such contractor or consultant is prohibited from releasing, publishing, or otherwise using any information made available to it under its contractual responsibility without specific permission of the administrator;

(b) Call upon state agencies to provide available information as necessary to assist the administrator in meeting his or her responsibilities under this act, which information shall be supplied as promptly as circumstances permit;

(c) Appoint technical or advisory committees, as he or she deems necessary. Individuals appointed to any technical or other advisory committee may be reimbursed for their travel expenses under RCW 43.03.050 and 43.03.060;

(d) Solicit, accept, and spend public and private grants, contributions, and other funds to match public funds appropriated to carry out the purposes of this act.

NEW SECTION. Sec. 3. The Washington prescription drug insurance plan is established within the Washington pharmacy access initiative. The plan shall be actuarially sound and designed to provide eligible persons with coverage for prescription drugs and pharmacy services. Enrollment in the plan is voluntary.

NEW SECTION. Sec. 4. In implementing the Washington prescription drug insurance plan, the administrator shall take all necessary steps to ensure that the plan is structured in a way that maximizes savings, efficiencies, affordability, benefits, and coverage, and in so doing, has the following powers and duties:

(1) To design and from time to time revise a schedule of covered prescription drugs and pharmacy services. No prescription drug shall be excluded from any formulary established for the plan unless another prescription drug is available on the formulary that is therapeutically equivalent to the excluded prescription drug. All enrollees are entitled to receive covered drugs and services in return for premium payments to the plan. In designing and revising the schedule of drugs and services, the administrator's decisions shall be based on scientific evidence and be intended to optimize patient care, discourage prescribing that is not medically indicated, and encourage the most cost-effective selection of medications. The administrator shall adopt any uniform formulary developed pursuant to section 13 of this act;

(2) To negotiate price discounts and rebates from pharmaceutical manufacturers for prescription drugs covered under the plan;

(3) To determine the periodic premiums due the plan from enrollees, based upon gross family income. A financial sponsor may, with the prior approval of the administrator, pay the premium, rate, or any other amount on behalf of an enrollee, by arrangement with the enrollee and through a mechanism acceptable to the administrator;

(4) Subject to section 5 of this act, to design and implement a structure of enrollee cost-sharing. The structure shall discourage inappropriate enrollee utilization of drugs and services, and may utilize copayments, deductibles, and other cost-sharing mechanisms, but shall not be so costly to enrollees as to constitute a barrier to appropriate utilization of necessary drugs and services;

(5) To limit enrollment of persons so as to prevent an overexpenditure of appropriations by the plan. Whenever the administrator finds that there is danger of such an overexpenditure, the administrator shall close enrollment until the administrator finds the danger no longer exists;

(6) To limit the payment of subsidies to subsidized enrollees;

(7) To enter into a competitively procured contract with one or more entities including, but not limited to, a pharmacy benefit manager, to administer benefits under the plan. The procurement shall explicitly be made a part of, or the contract shall be performed in conjunction with, any established state agency aggregate purchasing program. The health care authority may contract with entities to perform marketing, enrollment, billing, claims processing, claims management, or any other function it deems necessary;

(8) To offer a mail order program and require the use of a mail order program for maintenance drugs. No mail order program for maintenance drugs may be required unless the administrator determines in writing that material savings will result to the state or enrollees without compromising the health or safety of enrollees. In making such a determination, the administrator shall consider the impact of a mail order program on the value of the retail pharmacy services in the communities. Prior to making such a determination, the administrator shall hold at least one public hearing in order to hear testimony from members of the public. Any mail order program must be administered by the Washington state health care authority, and the contracted pharmacy benefit manager;

(9) To receive periodic premiums from or on behalf of enrollees, deposit them in the prescription drug insurance plan operating account, and keep records of enrollee status;

(10) To accept applications from individuals for enrollment in the Washington prescription drug insurance plan, to establish appropriate minimum-enrollment periods for enrollees as may be necessary, and to determine, upon application and on a reasonable schedule defined by the health care authority, or at the request of any enrollee, eligibility due to current gross family income for sliding scale premiums. Funds received by a family as part of participation in the adoption support program authorized under RCW 26.33.320 and 74.13.100 through 74.13.145 shall not be counted toward a family's current gross family income for the purposes of this chapter. When an enrollee fails to report income or income changes accurately, the administrator shall have the authority either to bill the enrollee for the amounts overpaid by the state or to impose civil penalties of up to two hundred percent of the amount of subsidy overpaid due to the enrollee incorrectly reporting income. The administrator shall adopt rules to define the appropriate application of these sanctions and the processes to implement the sanctions provided in this subsection, within available resources. No subsidy may be paid with respect to any enrollee whose current gross family income exceeds twice the federal poverty level or who is a recipient of medical assistance or medical care services under chapter 74.09 RCW. If a number of enrollees drop their enrollment for no apparent good cause, the administrator may establish appropriate rules or requirements that are applicable to such individuals before they are allowed to reenroll in the plan;

(11) To establish a time period, not to exceed nine months from the effective date of coverage, within which benefits will not be provided for any condition for which a health care provider recommended or provided treatment within six months of a person's application for enrollment. A process to waive the preexisting condition waiting period in appropriate circumstances may also be established;

(12) To evaluate the effects this chapter has on private employer-based prescription drug coverage and to take appropriate measures consistent with state and federal statutes that will discourage the reduction of such coverage in the state;

(13) To design and implement prescriber education programs and other interventions directed at health care providers intended to promote the safest, most appropriate, and cost-effective use of prescription drugs by plan enrollees;

(14) In consultation with appropriate state and local government agencies, to establish criteria defining eligibility for persons confined or residing in government-operated institutions.

NEW SECTION. Sec. 5. The plan shall pay the costs of all generic and preferred prescription drugs and pharmacy services for an enrollee once that enrollee's out‑of‑pocket expenditures in a calendar year on prescription drugs and pharmacy services exceeds the lesser of: (1) Ten percent of the enrollee's gross annual household income; or (2) two thousand dollars. For purposes of this section, out‑of‑pocket expenditures do not include monthly premiums, for which an enrollee remains responsible.

NEW SECTION. Sec. 6. (1) The Washington state health care authority, and any entity with which it contracts, shall inform enrollees in writing of the plan's scope, coverage, cost-sharing requirements, and any limitations on access to prescription drugs. The Washington state health care authority, and any entity with which it contracts, shall provide for a clear and timely process by which enrollees can appeal a decision by the health care authority or any contracted entity to deny or limit coverage or benefits under this section.

(2) The appeal process shall, at a minimum, provide enrollees with: (a) The opportunity to obtain a nonpreferred drug at the copayment level of a preferred drug, or to obtain any prescription drug excluded by the plan, upon a separate written certification by the enrollee's physician, satisfactory to the health care authority, that the nonpreferred or excluded drug is medically necessary and there is no therapeutically equivalent preferred drug available to the enrollee; (b) a provision allowing enrollees to appeal the exclusion of any prescription drug from any formulary established for the plan. An enrollee may apply to be exempt from any mail order requirement of the plan upon a separate written certification by the enrollee's physician, satisfactory to the health care authority, that due to a disability or other significant limiting factor, the use of such a mail order program would be medically inappropriate for the enrollee. A retail pharmacy may not be required to dispense a prescription upon the failure of an enrollee to make the required copayment.

NEW SECTION. Sec. 7. Any enrollee whose premium payments to the plan are delinquent or who moves his or her residence out of the state may be dropped from enrollment status. The administrator shall provide delinquent enrollees with advance written notice of their removal from the plan and shall provide for a hearing under chapters 34.05 and 34.12 RCW for any enrollee who contests the decision to drop the enrollee from the plan.

NEW SECTION. Sec. 8. The activities and operations of the Washington prescription drug insurance plan under this chapter, including those of pharmacy benefit managers to the extent of their participation in the plan, are exempt from the provisions and requirements of Title 48 RCW, except that persons appointed or authorized to solicit applications for enrollment in the plan, including employees of the health care authority, must comply with chapter 48.17 RCW. For the purposes of this section, "solicit" does not include distributing information and applications for the plan and responding to questions.

NEW SECTION. Sec. 9. The prescription drug insurance plan trust account is hereby established in the state treasury. All nongeneral fund-state funds collected for this program shall be deposited in the prescription drug insurance plan trust account. Moneys in the account shall be used exclusively for the purposes of sections 3 through 9 of this act. Only the administrator or the administrator's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION. Sec. 10. (1) The Washington pharmacy access initiative shall award prescription drug information and education grants to local government or nonprofit organizations for the design and implementation of programs intended to inform and train persons age sixty-five and older in the safe and appropriate use of prescription and nonprescription medications.

(2) The grants shall be awarded on a competitive basis, using the following criteria:

(a) The demonstrated ability of the applicant organization to effectively administer such a program, including appropriate outreach and follow-up;

(b) The financial and in-kind resources that the applicant organization will bring to the program in addition to those funded by the grant;

(c) The extent to which the proposed program design reflects a comprehensive understanding of issues related to the safe and appropriate use of prescription drugs by seniors, and how to effectively communicate with the target audience;

(d) The extent to which the proposed program reflects a collaborative effort between the applicant organization and other health care providers and programs in the location to be served, including doctors, pharmacists, and long-term care providers;

(e) The extent to which the proposed program will serve as a model that can be replicated by other organizations around the state; and

(f) Any other criteria deemed appropriate by the administrator to ensure the quality and cost-effectiveness of the programs funded.

In awarding the grants, the administrator shall make every effort to ensure that the programs are geographically dispersed around the state.

NEW SECTION. Sec. 11. Notwithstanding the provisions of chapter 42.17 RCW, records obtained, reviewed by, or on file with the Washington pharmacy access initiative containing information concerning medical treatment of individuals is exempt from public inspection and copying.

NEW SECTION. Sec. 12. The legislature reserves the right to amend or repeal all or any part of this chapter at any time and there shall be no vested private right of any kind against such amendment or repeal. All the rights, privileges, or immunities conferred by this chapter or any acts done pursuant thereto shall exist subject to the power of the legislature to amend or repeal this chapter at any time.

NEW SECTION. Sec. 13. (1) The administrator shall establish a pharmacy and therapeutics committee to develop a uniform formulary for state-purchased health care.

(a) The pharmacy and therapeutics committee may be established directly or through a contract with a private organization. The committee must be composed of actively practicing health care professionals, including physicians, pharmacists, advanced registered nurse practitioners, at least one health care professional employed by a health plan, as defined in RCW 48.43.005, and experts in pharmacoeconomics. Additional specialty expertise and participation may be obtained when necessary.

(b) The formulary must be based upon careful consideration and pharmacoeconomic analysis, giving primary consideration to clinical efficacy of prescription drugs that have been approved by the federal food and drug administration. Cost considerations can influence decisions regarding prescription drugs to be included in the formulary only after safety, efficacy, and therapeutic need have been evaluated. When safety, efficacy, and clinical outcomes of a drug are similar to those of existing formulary drugs, or where a positive economic outcome is not expected with a new drug, it is rational to make a drug formulary decision based upon the unit cost of that drug. Any other public or private entity may choose to adopt the formulary developed under this subsection.

(c) The formulary must include clear standards and procedures for an exception process to ensure consumer access to medically necessary alternatives to the formulary. No formulary can account for every therapeutic eventuality or unique patient need. The procedures to allow the prescribing of nonformulary medications must neither pose a substantial barrier to the prescribing health care professional nor hinder the consumer's ability to receive necessary medication. However, to encourage the use of clinically efficacious and cost-effective drugs, the administrator may relate prescription drug cost-sharing to the formulary status of a drug.

(d) The administrator may require pharmaceutical manufacturers to submit available pharmacoeconomic data, including clinical and cost outcomes, safety, efficacy, and effectiveness information, to the pharmacy and therapeutics committee in a standardized format to assist the committee in its evaluation of prescription drug products.

(e) Due to the sensitivity of proprietary or nonpublished data that may be used to evaluate prescription drug products for inclusion on the formulary, meetings of the pharmacy and therapeutics committee shall be exempted from application of the open public meetings act, chapter 42.30 RCW.

(2) The drug utilization review program must include but is not limited to prescription drug review, management, and education, including prospective, concurrent, and retrospective review, to improve the quality of pharmaceutical care by ensuring that prescription drugs provided through state-purchased health care programs are appropriate, medically necessary, and not likely to produce adverse medical results.

The administrator may establish a drug utilization review committee either directly or through a contract with a private organization to assist in development and implementation of the drug utilization review program. The committee should be composed of actively practicing health care professionals. Additional specialty expertise may be obtained as needed. Due to the sensitivity of proprietary or nonpublished data that may be used by the drug utilization review committee, meetings of the committee shall be exempted from application of the open public meetings act, chapter 42.30 RCW.

NEW SECTION. Sec. 14. The administrator shall design and implement at least two pilot disease management programs for persons covered through state-purchased health care programs. The programs shall begin operation on or before July 1, 2002.

(1) The administrator shall determine, in consultation with appropriate state agencies, the disease groups most appropriate for disease management and the state-purchased health care programs to which the disease management programs will apply, after reviewing claims and cost information and research on the effectiveness of disease management programs. The following disease groups should first be considered for disease management programs: Asthma, diabetes, cardiovascular disease, malignancies, obesity, hemophilia, renal disease, transplants, intervertebral disc disorders, and populations at highest risk of improper use of medication.

(2) Each pilot disease management program must include physicians, pharmacists, and other appropriate health care providers in the design and implementation of the program. Physicians may not be required to participate in a disease management program as a condition of contracting to provide state-purchased health care services.

(3) The programs must incorporate an evaluation component that will allow the administrator to identify successful programs that are candidates for statewide expansion. The evaluation should consider the impact of the disease management program upon the health status of participating enrollees, the use of health services by these enrollees, and the overall costs of treating these enrollees.

NEW SECTION. Sec. 15. Any savings to health care benefit programs administered by the public employees' benefits board that result from implementation of the pharmacy access initiative under this act must be deposited into the public employees' and retirees' insurance account established under RCW 41.05.120.

NEW SECTION. Sec. 16. (1) The prescription drug price program is established within the Washington pharmacy access initiative to lower prescription drug prices for uninsured and underinsured residents of the state.

(2) A drug manufacturer or labeler that sells prescription drugs in the state may voluntarily elect to enter into a rebate agreement with the health care authority.

(3) The administrator shall negotiate the terms of the rebate from a manufacturer or labeler, taking into consideration the rebate calculated under the medicaid rebate program pursuant to 42 U.S.C. Sec. 1396r-8, the average wholesale price of prescription drugs, and any other available information on prescription drug prices and price discounts.

(4) If a drug manufacturer or labeler elects not to agree to a rebate, the administrator shall notify the secretary of the department of social and health services, who shall review those manufacturer's products for prior authorization for the state medicaid program pursuant to chapter 74.09 RCW. The administrator shall take similar actions involving prior authorization or formularies for any other state-funded prescription drug program. The administrator and each relevant agency shall adopt rules creating clear procedures for the implementation of this subsection. The names of manufacturers and labelers that do not enter into rebate agreements are public information and the administrator shall release this information to the public. The administrator shall also publicize to doctors, pharmacists, and other health professionals information about the relative cost of drugs produced by manufacturers and labelers that enter into rebate agreements compared to those who do not enter into rebate agreements.

NEW SECTION. Sec. 17. A retail pharmacy shall discount the price of prescription drugs sold to program participants.

(1) The health care authority shall establish discounted prices for drugs covered by a rebate agreement and shall promote the use of efficacious and reduced-cost drugs, taking into consideration reduced prices for state and federally capped drug programs, differential dispensing fees, administrative overhead, and incentive payments.

(2) Beginning no later than January 1, 2002, a retail pharmacy shall offer prescription drugs at or below the average wholesale price, minus six percent, plus a dispensing fee designated by the administrator. These initial price levels shall be calculated by the administrator and the dispensing fee shall not be less than that provided under the state medicaid program. The average wholesale price is the wholesale price charged on a specific commodity that is assigned by the drug manufacturer and is listed in a nationally recognized drug pricing file.

(3) No later than October 1, 2002, a retail pharmacy shall offer prescription drugs at or below the initial price levels specified in subsection (2) of this section minus the amount of any rebate paid by the state to the retail pharmacy. These discounted price levels shall be calculated by the administrator. In determining the discounted price levels, the administrator shall consider an average of all rebates weighted by sales of drugs subject to these rebates over the most recent twelve-month period for which the information is available.

NEW SECTION. Sec. 18. All residents of the state are authorized to participate in the program. The administrator shall establish simplified procedures for issuing program enrollment cards to authorized residents. The health care authority shall undertake outreach efforts to build public awareness of the program and maximize enrollment by authorized residents.

NEW SECTION. Sec. 19. (1) The board of pharmacy, created under RCW 18.64.001, shall adopt rules requiring disclosure by retail pharmacies to program participants of the amount of savings provided as a result of the program. The rules must protect information that is proprietary in nature.

(2) The health care authority may not impose transaction charges on retail pharmacies that submit claims or receive payments under the program.

(3) A retail pharmacy shall submit claims to the health care authority to verify the amount charged to program participants.

(4) On a weekly or biweekly basis, the health care authority shall reimburse a retail pharmacy for discounted prices provided to program participants and dispensing fees set by the administrator.

(5) The health care authority shall collect from the retail pharmacies utilization data necessary to calculate the amount of the rebate from the manufacturer or labeler. The health care authority shall protect the confidentiality of all information subject to confidentiality protection under state or federal law, rule, or regulation.

NEW SECTION. Sec. 20. Discrepancies in rebate amounts must be resolved using the process established in this section.

(1) If there is a discrepancy in the manufacturer's or labeler's favor between the amount claimed by a pharmacy and the amount rebated by the manufacturer or labeler, the health care authority, at the health care authority's expense, may hire a mutually agreed-upon independent auditor. If a discrepancy still exists following the audit, the manufacturer or labeler shall justify the reason for the discrepancy or make payment to the health care authority for any additional amount due.

(2) If there is a discrepancy against the interest of the manufacturer or labeler in the information provided by the health care authority to the manufacturer or labeler regarding the manufacturer's or labeler's rebate, the manufacturer or labeler, at the manufacturer's or labeler's expense, may hire a mutually agreed-upon independent auditor to verify the accuracy of the data supplied to the health care authority. If a discrepancy still exists following the audit, the health care authority shall justify the reason for the discrepancy or refund to the manufacturer any excess payment made by the manufacturer or labeler.

(3) Following the procedures established in subsection (1) or (2) of this section, either the health care authority or the manufacturer or labeler may request a hearing. Supporting documentation must accompany the request for a hearing.

NEW SECTION. Sec. 21. The prescription drug price account is created in the custody of the state treasurer. All receipts from revenues paid by manufacturers or labelers who pay rebates and any appropriations made to the account must be deposited into the account. Expenditures from the account may be used only to reimburse retail pharmacies for discounted prices provided to program participants and to reimburse the health care authority for the costs of administering the program. Only the administrator or the administrator's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION. Sec. 22. By January 1, 2002, and by January 1st of each year through 2005, the administrator shall submit to the governor and the legislature a progress report regarding the implementation and impact of the pharmacy access initiative, including, where appropriate, information regarding enrollment in and the financial status of each of its components. The report shall be prepared in consultation with the agencies and organizations participating in the development of the initiative under section 2 of this act, and may present recommendations for modifications to the initiative, or for additional strategies that should be pursued to provide affordable access to and promote therapeutic and cost-effective utilization of prescription drugs by residents of the state of Washington.

NEW SECTION. Sec. 23. The health care authority may adopt rules to implement the provisions of this chapter.

NEW SECTION. Sec. 24. The health care authority may seek any waivers of federal law, rule, or regulation necessary to implement the provisions of this chapter.

Sec. 25. RCW 41.05.026 and 1991 c 79 s 1 are each amended to read as follows:

(1) When soliciting proposals for the purpose of awarding contracts for goods or services, the administrator shall, upon written request by the bidder, exempt from public inspection and copying such proprietary data, trade secrets, or other information contained in the bidder's proposal that relate to the bidder's unique methods of conducting business or of determining prices or premium rates to be charged for services under terms of the proposal.

(2) Actuarial formulas, statistics, cost and utilization data, or other proprietary information submitted upon request of the administrator or board by a contracting insurer, health care service contractor, health maintenance organization, or vendor may be withheld at any time from public inspection when necessary to preserve trade secrets or prevent unfair competition.

(3) Proprietary information submitted upon request of the administrator by any insurer, vendor, pharmaceutical manufacturer, or other entity/person for the purpose of analyzing and developing cost containment options, delivery alternatives, prescription drug education and utilization systems, and consolidated purchasing for state-purchased health care programs may be withheld at any time from public inspection when necessary to preserve trade secrets or prevent unfair competition.

(4) The board may hold an executive session during any regular or special meeting to discuss information submitted in accordance with subsection (1) or (2) of this section.

NEW SECTION. Sec. 26. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 27. Sections 1 through 24 and 26 of this act constitute a new chapter in Title 70 RCW.