READ FIRST TIME 02/10/04.   

     AN ACT Relating to prescription drugs; amending RCW 70.14.050 and 41.05.500; and creating new sections.

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

Sec. 1   RCW 70.14.050 and 2003 1st sp.s. c 29 s 9 are each amended to read as follows:
     (1) Each agency administering a state purchased health care program as defined in RCW 41.05.011(2) shall, in cooperation with other agencies, take any necessary actions to control costs without reducing the quality of care when reimbursing for or purchasing drugs. To accomplish this purpose, participating agencies may establish an evidence-based prescription drug program.
     (2) In developing the evidence-based prescription drug program authorized by this section, agencies:
     (a) Shall prohibit reimbursement for drugs that are determined to be ineffective by the United States food and drug administration;
     (b) Shall adopt rules in order to ensure that less expensive generic drugs will be substituted for brand name drugs in those instances where the quality of care is not diminished;
     (c) Where possible, may authorize reimbursement for drugs only in economical quantities;
     (d) May limit the prices paid for drugs by such means as negotiated discounts from pharmaceutical manufacturers, central purchasing, volume contracting, purchasing drugs from approved pharmacies or wholesalers in Canada, or setting maximum prices to be paid;
     (e) Shall consider the approval of drugs with lower abuse potential in substitution for drugs with significant abuse potential;
     (f) May take other necessary measures to control costs of drugs without reducing the quality of care; and
     (g) Shall adopt rules governing practitioner endorsement and use of any list developed as part of the program authorized by this section.
     (3) Agencies shall provide for reasonable exceptions, consistent with RCW 69.41.190, to any list developed as part of the program authorized by this section.
     (4) Agencies shall establish an independent pharmacy and therapeutics committee to evaluate the effectiveness of prescription drugs in the development of the program authorized by this section.

Sec. 2   RCW 41.05.500 and 2003 1st sp.s. c 29 s 3 are each amended to read as follows:
     (1) In negotiating price discounts with prescription drug manufacturers for state purchased health care programs, the health care authority shall also negotiate such discounts for any Washington resident:
     (a) Whose family income does not exceed three hundred percent of the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services;
     (b) Whose existing prescription drug need is not covered by insurance; and
     (c) Who is: (i) At least fifty years old; or (ii) between the ages of nineteen and forty-nine and is otherwise eligible for benefits under Title II of the social security act, federal old age, survivors, and disability insurance benefits.
     (2)(a) An attestation, which shall be submitted to the administrator, from an individual that the individual's family income does not exceed three hundred percent of the federal poverty level is sufficient to satisfy the eligibility requirement of subsection (1)(a) of this section.
     (b) Any person willfully making a false statement in order to qualify for discounts under this section is guilty of a misdemeanor. Notice of such shall be included on the program enrollment form.
     (3) The administrator shall charge participants in this program an annual enrollment fee sufficient to offset the cost of program administration.
     (4) Any rebate or discount provided by a pharmaceutical manufacturer and made available to individuals under this section shall not be at the expense of retail pharmacies. This does not prohibit participating state agencies from using discounted pharmacy reimbursements for services or ingredients provided by the pharmacies.
     (5) In addition to price discounts negotiated with pharmaceutical manufacturers for state purchased health care programs and eligible individuals, the health care authority is authorized to purchase, or facilitate the purchase of, drugs approved by the food and drug administration from Canadian pharmacies and wholesalers. The health care authority shall develop an Internet web site and use the pharmacy connection program established under RCW 41.05.520 to provide information to Washington residents regarding opportunities to purchase prescription drugs from Canada and the best means to ensure that any prescription drugs they purchase have been safely manufactured, distributed, and stored. The attorney general shall review the web site and the information provided through the pharmacy connection program and certify that they do not violate any applicable state or federal law.

NEW SECTION.  Sec. 3   Agencies administering a state-purchased health care program shall not implement the provisions of this act relating to the bulk purchasing of prescription drugs from Canada until federal statutory or regulatory action is taken to authorize such purchasing.

NEW SECTION.  Sec. 4   If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state.