Pennsylvania Act 2004-219 — STATE LOTTERY LAW - GENERIC DRUGS AND AMOUNT OF REBATE FOR CERTAIN PRESCRIPTION DRUGS

Act text

STATE LOTTERY LAW - GENERIC DRUGS AND AMOUNT OF REBATE FOR CERTAIN
                            PRESCRIPTION DRUGS
                 Act of Nov. 30, 2004, P.L. 1722, No. 219             Cl. 72
                             Session of 2004
                               No. 2004-219

     SB 1167

                                  AN ACT

     Amending the act of August 26, 1971 (P.L.351, No.91), entitled
        "An act providing for a State Lottery and administration
        thereof; authorizing the creation of a State Lottery
        Commission; prescribing its powers and duties; disposition of
        funds; violations and penalties therefor; exemption of prizes
        from State and local taxation and making an appropriation,"
        defining "less expensive"; and further providing for generic
        drugs and for amount of rebate for certain prescription
        drugs.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Section 502 of the act of August 26, 1971
     (P.L.351, No.91), known as the State Lottery Law, is amended by
     adding a definition to read:
      Section 502.  Definitions.
        The following words and phrases when used in this chapter
     shall have the meanings given to them in this section unless the
     context clearly indicates otherwise:
        * * *
        "Less expensive."  The lowest net cost to the program. The
     net cost shall include the amount paid by the Commonwealth to a
     pharmacy for a drug under a current retail pharmacy
     reimbursement formula less any discount or rebates, including
     those paid during the previous calendar quarter and inclusive of
     all dispensing fees.
        * * *
        Section 2.  Sections 510(a) and 705(c.1) of the act, amended
     or added November 26, 2003 (P.L.212, No.37), are amended to
     read:
      Section 510.  Generic drugs.
        (a)  In general.--Notwithstanding any other statute or
     regulation, [if an] a brand name product shall be dispensed and
     not substituted with an A-rated generic therapeutically
     equivalent drug if it is less expensive to the program. If a
     less expensive A-rated generic therapeutically equivalent drug
     is available for dispensing to a claimant, the provider shall
     dispense the A-rated generic therapeutically equivalent drug to
     the claimant. The department shall reimburse providers based
     upon the most current listing of Federal upper payment limits
     established in the Medicaid Program under 42 CFR § 447.332
     (relating to upper limits for multiple source drugs), plus a
     dispensing fee as set forth in section 509(6). The department
     shall update the average wholesale costs and the Federal upper
     payment limits on a regular basis, at least every 30 days. The
     department shall not reimburse providers for brand name products
     except in the following circumstances:
            (1)  There is no A-rated generic therapeutically
        equivalent drug available on the market. This paragraph does
        not apply to the lack of availability of an A-rated generic
        therapeutically equivalent drug in the providing pharmacy
        unless it can be shown to the department that the provider
        made reasonable attempts to obtain the A-rated generic
        therapeutically equivalent drug or that there was an
        unforeseeable demand and depletion of the supply of the A-
        rated generic therapeutically equivalent drug. In either
        case, the department shall reimburse the provider for 90% of
        the average wholesale cost plus a dispensing fee based on the
        least expensive A-rated generic therapeutically equivalent
        drug for the brand drug dispensed.
            (2)  An A-rated generic therapeutically equivalent drug
        is deemed by the department, in consultation with a
        utilization review committee, to have too narrow a
        therapeutic index for safe and effective dispensing in the
        community setting. The department shall notify providing
        pharmacies of A-rated generic therapeutically equivalent
        drugs that are identified pursuant to this paragraph on a
        regular basis.
            (3)  The Department of Health has determined that a drug
        shall not be recognized as an A-rated generic therapeutically
        equivalent drug for purpose of substitution under section
        5(b) of the act of November 24, 1976 (P.L.1163, No.259),
        referred to as the Generic Equivalent Drug Law.
            (4)  At the time of dispensing, the provider has a
        prescription on which the brand name drug dispensed is billed
        to the program by the provider at a usual and customary
        charge which is equal to or less than the least expensive
        usual and customary charge of any A-rated generic
        therapeutically equivalent drug reasonably available on the
        market to the provider.
            (5)  The brand name drug is less expensive to the
        program.
        * * *
      Section 705.  Amount of rebate.
        * * *
        (c.1)  Rebates for other [drugs for quarters beginning after
     December 31, 2003.--For quarters beginning after December 31,
     2003, all of the following shall apply:
            (1)  the amount of the rebate to the Commonwealth for a
        calendar quarter with respect to covered prescription drugs
        which are noninnovator multiple-source drugs shall be equal
        to the product of:
                (i)  the applicable percentage of the average
            manufacturer price, after deducting customary prompt
            payment discounts, for each dosage form and strength of
            such drugs for the quarter; and
                (ii)  the number of units of such form and dosage
            reimbursed by PACE, PACENET and designated pharmaceutical
            programs in the quarter.
            (2)  For purposes of paragraph (1), the applicable
        percentage is 14%.] drugs.--For quarters beginning after
        December 31, 2003, each manufacturer shall remit a rebate to
        the Commonwealth for the total number of units of each dosage
        form and strength reimbursed by PACE, PACENET and designated
        pharmaceutical programs in the quarter pursuant to the
        determination established by section 1927(c)(3) of the Social
        Security Act (49 Stat. 620, 42 U.S.C. § 1396r-8(c)(3)).
        * * *
        Section 3.  The amendment of section 705(c.1) of the act
     shall be retroactive to January 1, 2004.
        Section 4.  Notwithstanding any other provision of law to the
     contrary, persons who, as of December 31, 2004, are enrolled in
     the PACENET program established pursuant to section 519 of the
     act shall remain eligible for the PACENET program if the maximum
     income limit is exceeded due solely to a Social Security cost-
     of-living adjustment. Eligibility in the PACENET program
     pursuant to this section shall expire on December 31, 2005.
        Section 5.  This act shall take effect immediately.

     APPROVED--The 30th day of November, A. D. 2004.

     EDWARD G. RENDELL