SB383: relative to pharmacy benefit management.

CHAPTER 188

SB 383-FN – FINAL VERSION

03/04/04 0705s

15Apr2004… 1030h

15Apr2004… 1215h

05/06/04 1563eba

2004 SESSION

04-3095

01/09

SENATE BILL 383-FN

AN ACT relative to pharmacy benefit management.

SPONSORS: Sen. Clegg, Dist 14

COMMITTEE: Public Institutions, Health and Human Services

AMENDED ANALYSIS

This bill clarifies certain provisions of the pharmacy benefits management program, including procedures for requiring prior authorization for certain medications to treat severe mental illnesses. This bill adds a member to the pharmacy and therapeutics advisory committee. This bill also allows the commissioner of the department of health and human services to negotiate supplemental rebates, price discounts, and other mechanisms to reduce prescription drug costs.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/04/04 0705s

15Apr2004… 1030h

15Apr2004… 1215h

05/06/04 1563eba

04-3095

01/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Four

AN ACT relative to pharmacy benefit management.

Be it Enacted by the Senate and House of Representatives in General Court convened:

188:1 Department of Health and Human Services; Medicaid Pharmacy Benefits Management Program. Amend 2002, 281:9 as amended by 2003, 319:176 to read as follows:

281:9 Department of Health and Human Services; Medicaid Pharmacy Benefits Management Program.

I. The commissioner, in order to manage plan benefits under Medicaid, shall adopt rules under RSA 541-A, relative to a pharmacy benefits management program which may include provisions for:

(a) A medical pharmacy lock-in program to prevent recipients from obtaining excessive quantities of, or from inappropriately using, prescription drugs through multiple pharmacies; and

(b) A prior authorization process in which a prescriber seeks approval by the department, through its designated agent, to make payment for drugs which are considered to have a high potential for misuse or abuse, are high cost, or should be monitored for correct adherence to clinical protocols.

II. The commissioner may place a drug on a preferred drug list, provided that the decision to place the drug on a preferred drug list has been ratified in writing by a physician who is board certified in the specialty that most commonly treats the disease or prescribes the relevant therapeutic class of drugs. The physician shall not be employed by, nor have any financial relationship with, any pharmacy benefits management company managing Medicaid prescription benefits, nor be a member of the pharmacy and therapeutics committee established in paragraph VI. Such written ratification shall be submitted to the commissioner, members of the pharmacy and therapeutics committee, established in paragraph VI, and the legislative oversight committee, established in subparagraph VII(b), and shall be available to the public upon request.

III. Notwithstanding the provisions of paragraph II, the commissioner shall not limit or exclude coverage for a non-preferred drug which has been previously approved and prescribed for the treatment of an enrollee’s medical condition, provided that such drug has been determined to be safe and effective for the treatment of such medical condition and provided that the enrollee’s physician has determined that it is medically necessary that the enrollee continue to receive the previously prescribed drug.

IV. Notwithstanding the provisions of paragraph II, the commissioner [shall not require prior authorization or impose any other restriction on medications used to treat severe mental illnesses including schizophrenia, severe depression, and bipolar disorder] may require prior authorization for medications to treat severe mental illnesses including schizophrenia, severe depression, and bipolar disorder for enrollees who are being treated for such severe mental illness with a non-preferred drug only if, after a transition period not to exceed 6 months, the enrollee’s physician has determined that the enrollee should continue to be treated with the non-preferred drug.

IV-a. The enrollee’s physician shall base the determination made under paragraphs III and IV that an enrollee shall continue to be treated, or, if newly diagnosed, may be treated with a non-preferred drug on any one of the following criteria:

(a) Allergy to all medications within the same class on the preferred drug list;

(b) Contraindication to or drug-to-drug interaction with all medications within the same class on the preferred drug list;

(c) History of unacceptable or toxic side effects to all medications within the same class on the preferred drug list;

(d) Therapeutic failure of all medications within the same class on the preferred drug list;

(e) An indication that is unique to a non-preferred drug and is supported by peer-reviewed literature or a unique federal Food and Drug Administration-approved indication;

(f) Age specific indication;

(g) Medical co-morbidity or other medical complication that precludes the use of a preferred drug; or

(h) Clinically unacceptable risk with a change in therapy to a preferred drug. Selection by the physician of the criteria under this subparagraph shall require an automatic approval by the pharmacy benefit program.

V. If the commissioner determines that the department does not have sufficient qualified personnel to self-administer a preferred drug list establish under paragraph II, he or she may contract with a vendor to provide assistance to implement a preferred drug list provided that payment for those services shall be contingent upon demonstrated reductions in usage of Medicaid prescription benefits.

VI. A pharmacy and therapeutics advisory committee shall be established to advise the department on the operation of the Medicaid pharmacy benefits management program, including the medications subject to prior authorization, the criteria for approving prior authorization including consideration of medical necessity, and the criteria for a pharmacy lock-in program designed to prevent recipients from obtaining excessive quantities of, or from inappropriately using, prescription drugs through multiple pharmacies.

(a) The committee shall include:

(1) The medical director of the department.

(2) Five persons appointed by the commissioner.

(3) Four physicians appointed by the New Hampshire Medical Society, who shall be from the following specialties:

(A) Internal medicine.

(B) Pediatrics.

(C) Family practice.

(D) Psychiatry.

(4) Two pharmacists, one of whom shall be a Pharm.D, appointed by the New Hampshire [Pharmacists Association] pharmacy board.

(5) An advanced registered nurse practitioner (A.R.N.P.) with a specialty in mental health, appointed by the New Hampshire board of nursing.

(b) In determining which medications shall be subject to prior authorization and in establishing the criteria for approving prior authorization or any changes thereto, the committee shall hold a public hearing to be scheduled at a time and place chosen to afford opportunity for the public to present its views. The committee shall give public notice of any hearing at least 30 days in advance of the hearing. Public notice shall include a public notice advertisement in a publication of daily statewide circulation.

VII.(a) The commissioner of health and human services shall report quarterly to the legislative oversight committee established in subparagraph (b) with respect to the Medicaid prescription drug benefits management program, including:

(1) The cost savings to the state realized from the operation of a pharmacy benefits management program. To the extent possible, the savings shall be allocated to each pharmacy benefits management initiative.

(2) The direct costs of a pharmacy benefits management program including costs associated with any pharmacy benefits management contract. To the extent possible, the savings shall be allocated to each pharmacy benefits management initiative.

(3) An analysis of any cost shifting associated with the implementation of each pharmacy benefits management initiative including additional prescriptions, hospital admissions, psychiatric hospital admissions, emergency room visits, long-term care admissions, physician visits, laboratory tests, skilled nursing care, and the underlying data to support such analysis.

(4) A report on the volume of claims paid for preferred versus non-preferred drugs, prior authorizations as a percentage of total claims, average call waiting time, and any issues that the state’s pharmacy benefits administrator is required to comply with under the terms of the pharmacy benefits management contract.

(5) A report of the effectiveness of the department of health and human services’ pharmacy lock-in program.

(6) An analysis of the impact of the pharmacy benefits management program on patient outcomes and quality of care.

(7) Recommendations for other opportunities to improve the management of pharmacy services or to expand pharmacy benefits to additional populations.

(b) For the purpose of legislative oversight of the Medicaid prescription drug benefits management program administered by the department, including a preferred drug list which may be established pursuant to paragraph II, there is established a legislative oversight committee consisting of 3 members of the house of representatives appointed by the speaker and 3 senators appointed by the senate president. The committee shall meet as needed and shall elect a chairperson from among the members. The committee shall review the reports of the commissioner under subparagraph (a) and may request additional information as needed. The department shall provide to the oversight committee a report of actions taken by the pharmacy and therapeutics committee since the last meeting of the oversight committee, including a list of any medications made subject to prior authorization, the criteria for approving such prior authorization, and minutes of the pharmacy and therapeutics committee meetings. The oversight committee may request the assistance of the legislative budget assistant in auditing the program and in reviewing its performance and effectiveness. The committee may make recommendations for proposed legislation, and shall report any findings or recommendations, including the commissioner’s report under subparagraph (a), to the speaker of the house, the president of the senate, the governor, and the chairperson of the joint legislative committee on administrative rules by January 1 of each year.

VIII. The commissioner of the department of health and human services shall conduct an independent audit not less than once per biennium of the premises, operations, and data from any entity providing pharmacy benefits management services to the state. The results of such audit shall be reported to the legislative fiscal committee, established in RSA 14:30-a, and members of the legislative oversight committee, established in subparagraph VII(b), and shall be made available to the public upon request.

IX.(a) The commissioner, or designee, may negotiate with pharmaceutical companies for the payment to the department of supplemental rebates or price discounts for Medicaid in addition to those required by Title XIX of the Social Security Act.

(b) The commissioner, or designee, may negotiate supplemental rebates, price discounts, and other mechanisms to reduce net prescription drug costs by means of any negotiation strategy which the commissioner determines will result in the maximum economic benefit to the program while maintaining access to high quality prescription drug therapies. The provisions of this subparagraph shall not authorize agreements with pharmaceutical manufacturers whereby financial support for medical and disease management services is accepted in lieu of cash supplemental rebate payments as consideration for placement of one or more drugs on the preferred drug list.

(c) The commissioner and the department shall prohibit the public disclosure of information revealing company-identifiable trade secrets, including rebate and supplemental rebate amounts and manufacturer’s pricing, obtained by the department in the course of negotiations conducted pursuant to this paragraph.

X. The commissioner shall develop:

(a) Mechanisms to educate and assist primary care physicians in efficacy and cost-effective practices for psychotropic medications; and

(b) A procedure to provide pharmacists with information concerning the availability of an ombudsman for seriously mentally ill persons who need assistance in obtaining medications.

188:2 Effective Date. This act shall take effect 60 days after its passage.

(Approved: June 1, 2004)

(Effective Date: July 31, 2004)