BILL REQ. #:  S-0734.1 

Read first time 01/27/2003.   Referred to Committee on Health & Long-Term Care.

     AN ACT Relating to the aggregate purchasing prescription drug discount program; amending RCW 41.05.011; adding new sections to chapter 41.05 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   The legislature finds that prescription drugs play an increasingly significant role in maintaining and improving the health of Washington residents. But the cost of these drugs is placing a growing strain on state health care programs. For those people not covered by these programs, or otherwise uninsured, the high costs may limit their access to medications altogether. However, by maximizing its purchasing power and taking better advantage of its position as a major buyer of prescription drugs, the state should be able to reduce the price it pays for such drugs across all state programs, and offer some relief to others in need who lack prescription drug coverage. To further this purpose, there is created the aggregate purchasing prescription drug discount program.

Sec. 2   RCW 41.05.011 and 2001 c 165 s 2 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section shall apply throughout this chapter.
     (1) "Administrator" means the administrator of the authority.
     (2) "State purchased health care" or "health care" means medical and health care, pharmaceuticals, and medical equipment purchased with state and federal funds by the department of social and health services, the department of health, the basic health plan, the state health care authority, the department of labor and industries, the department of corrections, the department of veterans affairs, and local school districts.
     (3) "Authority" means the Washington state health care authority.
     (4) "Insuring entity" means an insurer as defined in chapter 48.01 RCW, a health care service contractor as defined in chapter 48.44 RCW, or a health maintenance organization as defined in chapter 48.46 RCW.
     (5) "Flexible benefit plan" means a benefit plan that allows employees to choose the level of health care coverage provided and the amount of employee contributions from among a range of choices offered by the authority.
     (6) "Employee" includes all full-time and career seasonal employees of the state, whether or not covered by civil service; elected and appointed officials of the executive branch of government, including full-time members of boards, commissions, or committees; and includes any or all part-time and temporary employees under the terms and conditions established under this chapter by the authority; justices of the supreme court and judges of the court of appeals and the superior courts; and members of the state legislature or of the legislative authority of any county, city, or town who are elected to office after February 20, 1970. "Employee" also includes: (a) Employees of a county, municipality, or other political subdivision of the state if the legislative authority of the county, municipality, or other political subdivision of the state seeks and receives the approval of the authority to provide any of its insurance programs by contract with the authority, as provided in RCW 41.04.205; (b) employees of employee organizations representing state civil service employees, at the option of each such employee organization, and, effective October 1, 1995, employees of employee organizations currently pooled with employees of school districts for the purpose of purchasing insurance benefits, at the option of each such employee organization; and (c) employees of a school district if the authority agrees to provide any of the school districts' insurance programs by contract with the authority as provided in RCW 28A.400.350.
     (7) "Board" means the public employees' benefits board established under RCW 41.05.055.
     (8) "Retired or disabled school employee" means:
     (a) Persons who separated from employment with a school district or educational service district and are receiving a retirement allowance under chapter 41.32 or 41.40 RCW as of September 30, 1993;
     (b) Persons who separate from employment with a school district or educational service district on or after October 1, 1993, and immediately upon separation receive a retirement allowance under chapter 41.32, 41.35, or 41.40 RCW;
     (c) Persons who separate from employment with a school district or educational service district due to a total and permanent disability, and are eligible to receive a deferred retirement allowance under chapter 41.32, 41.35, or 41.40 RCW.
     (9) "Benefits contribution plan" means a premium only contribution plan, a medical flexible spending arrangement, or a cafeteria plan whereby state and public employees may agree to a contribution to benefit costs which will allow the employee to participate in benefits offered pursuant to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.
     (10) "Salary" means a state employee's monthly salary or wages.
     (11) "Participant" means an individual who fulfills the eligibility and enrollment requirements under the benefits contribution plan.
     (12) "Plan year" means the time period established by the authority.
     (13) "Separated employees" means persons who separate from employment with an employer as defined in:
     (a) RCW 41.32.010(11) on or after July 1, 1996; or
     (b) RCW 41.35.010 on or after September 1, 2000; or
     (c) RCW 41.40.010 on or after March 1, 2002;
and who are at least age fifty-five and have at least ten years of service under the teachers' retirement system plan 3 as defined in RCW 41.32.010(40), the Washington school employees' retirement system plan 3 as defined in RCW 41.35.010, or the public employees' retirement system plan 3 as defined in RCW 41.40.010.
     (14) "Emergency service personnel killed in the line of duty" means law enforcement officers and fire fighters as defined in RCW 41.26.030, and reserve officers and fire fighters as defined in RCW 41.24.010 who die as a result of injuries sustained in the course of employment as determined consistent with Title 51 RCW by the department of labor and industries.
     (15) "Prescription drug program" means a program administered by a state agency pursuant to which prescription drugs are purchased or reimbursement for the purchase of prescription drugs is provided, or any state agency making such a purchase or reimbursement.
     (16) "Wholesaler" means a corporation, individual, or other entity that buys drugs or devices for resale and distributes the drugs or devices to corporations, individuals, or entities other than consumers.
     (17) "Manufacturer" means anyone who is engaged in manufacturing, preparing, propagating, compounding, processing, packaging, repackaging, or labeling a drug. However, a pharmacist compounding drugs to be dispensed from the pharmacy in which the drugs are compounded pursuant to prescriptions for individual patients is not a manufacturer.
     (18) "Supplier" means a wholesaler or manufacturer.

NEW SECTION.  Sec. 3   A new section is added to chapter 41.05 RCW to read as follows:
     No later than July 1, 2004, the health care authority must implement a program to aggregate the purchase of prescription drugs from suppliers for prescription drug programs in this state, to be known as the "aggregate purchasing prescription drug discount program." The authority may contract with an outside manager to administer this program, which includes the following components:
     (1) Price discounts on prescription drugs negotiated by the health care authority or manager with prescription drug suppliers on behalf of prescription drug programs in this state.
     (2) A means to make the negotiated price discounts available to any person who is:
     (a) A resident of the state of Washington;
     (b) Ineligible for medicaid prescription benefits;
     (c) Ineligible for, or not receiving, or both, a prescription drug benefit under a medicare supplemental policy or any other third-party payer prescription benefit; and
     (d)(i) At least fifty-five years old; or
     (ii) Between the ages of nineteen and fifty-four who is otherwise eligible for benefits under Title II of the social security act (federal old-age, survivors, and disability insurance benefits).

NEW SECTION.  Sec. 4   A new section is added to chapter 41.05 RCW to read as follows:
     The health care authority may adopt rules to implement this act.

NEW SECTION.  Sec. 5   By January 1, 2004, the administrator of the health care authority must submit to the governor and the legislature a progress report regarding the implementation of the aggregate purchasing prescription drug discount program.