SB384: relative to drugs paid for by the state.

SB 384-FN - AS AMENDED BY THE SENATE

02/19/04 0403s

2004 SESSION

04-3096

01/09

SENATE BILL 384-FN

AN ACT relative to drugs paid for by the state.

SPONSORS: Sen. Clegg, Dist 14; Sen. Green, Dist 6; Sen. Boyce, Dist 4; Sen. Martel, Dist 18; Sen. Prescott, Dist 23; Rep. Batula, Hills 58; Rep. Emerton, Hills 48; Rep. Rogers Johnson, Rock 83

COMMITTEE: Public Institutions, Health and Human Services

ANALYSIS

This bill requires that drugs paid for by the state, including the medicaid program, shall be the drug which is least expensive after taking into account all appropriate rebates and other discounts, unless the prescribing practitioner specifies that the brand name drug product is medically necessary.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

02/19/04 0403s

04-3096

01/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Four

AN ACT relative to drugs paid for by the state.

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

1 Health and Human Services; Drugs. Amend RSA 126-A:3, V to read as follows:

V. Pharmacists shall substitute generically equivalent drug products if the generic drug has been on the market for 3 months and only if the generic is least expensive after taking into account all appropriate rebates and other discounts for all legend and non-legend prescriptions paid for by the department of health and human services, including the medicaid program, unless the prescribing practitioner specifies that the brand name drug product is medically necessary. Such notification shall be in the practitioner's own handwriting and shall be retained in the pharmacist's file. The commissioner may waive the application of RSA 126-A:3, III if the commissioner determines such action is necessary to ensure the availability of prescription and other pharmaceutical services to persons served by the department or to avert serious economic hardship in the provision of prescriptions and other pharmaceutical services. The commissioner shall adopt rules under RSA 541-A relative to a waiver of the application. The commissioner, in consultation with pharmacy providers, may develop a new methodology for medical assistance reimbursement for legend and non-legend drugs.

2 Department of Corrections; Drugs. Amend RSA 623:1, IV to read as follows:

IV.(a) Pharmacists shall substitute generically equivalent drug products if the generic drug has been on the market for 3 months and only if the generic is least expensive after taking into account all appropriate rebates and other discounts for all legend and non-legend prescriptions paid for by the county department of corrections, including the medicaid program, unless the prescribing practitioner specifies that the brand name drug product is medically necessary. Such notification shall be in the practitioner's own handwriting and shall be retained in the pharmacist's file. The superintendent may waive the application of paragraph III if the superintendent determines such action is necessary to ensure the availability of prescription and other pharmaceutical services to persons served by the county or to avert serious economic hardship in the provision of prescriptions and other pharmaceutical services. The county commissioners shall adopt necessary rules and regulations to implement this [paragraph] subparagraph.

(b) Pharmacists shall substitute generically equivalent drug products if the generic drug has been on the market for 3 months and only if the generic is least expensive after taking into account all appropriate rebates and other discounts for all legend and non-legend prescriptions paid for by the department of corrections, including the medicaid program, unless the prescribing practitioner specifies that the brand name drug product is medically necessary. Such notification shall be in the practitioner's own handwriting and shall be retained in the pharmacist's file. The commissioner of the department of corrections may waive the application of paragraph III if the commissioner determines such action is necessary to ensure the availability of prescription and other pharmaceutical services to persons served by the state or to avert serious economic hardship in the provision of prescriptions and other pharmaceutical services.

3 State Employee Health Insurance; Self-Insured Plan. Amend RSA 21-I:30-d to read as follows:

21-I:30-d State Employee Health Insurance; Self-Insured Plan Required. Notwithstanding any provision of law to the contrary, the commissioner of administrative services shall implement a self-insured health plan for all state employees and their families and retired state employees and their spouses. The self-insured health plan shall include the university system of New Hampshire, unless the fiscal committee of the general court determines that it is not financially prudent. Under the self-insured plan, pharmacists shall substitute generically equivalent drug products if the generic drug has been on the market for 3 months and only if the generic is least expensive after taking into account all appropriate rebates and other discounts for all legend and non-legend prescriptions, unless the prescribing practitioner specifies that the brand name drug product is medically necessary. Such notification shall be in the practitioner's own handwriting and shall be retained in the pharmacist's file.

4 Effective Date. This act shall take effect 60 days after its passage.

LBAO

04-3096

Revised 2/9/04

SB 384 FISCAL NOTE

AN ACT relative to drugs paid for by the state.

FISCAL IMPACT:

The Departments of Administrative Services and Health and Human Services state this bill will have an indeterminable fiscal impact on state revenue and expenditures in FY 2005 and each year thereafter. The New Hampshire Veterans Home and the Department of Corrections state this bill will have no fiscal impact on state revenue and expenditures. There will be no fiscal impact on county and local revenue or expenditures.

METHODOLOGY:

The Department of Administrative Services indicated it does not have the data or resources available to determine the fiscal impact of this bill. The Department has requested a report on generic and brand name prescriptions usage and prices from the state's Administrative Service Organization (ASO). The Department has not received this information and is unsure what information will be available or how useful it will be to determine the fiscal impact of this bill.

The Department of Health and Human Services indicated that under federal Medicaid regulations, the manufacturer rebates are retroactive and confidential. The Department stated pharmacists do not have access to the rebate information and would not be able to consider rebates in determining if a generic drug is least expensive, therefor, the Department could not estimate the fiscal impact of this bill..

The New Hampshire Veterans Home stated it will open an in-house pharmacy with the Veterans Administration providing medications for 95% of the residents. The Home expects medications for the remaining 5% of the residents will be paid through third party reimbursement, therefor, this bill will have no fiscal impact.

The Department of Corrections states it currently uses the least expensive drugs for its offender population unless otherwise specified by a physician in writing, therefor, this bill will have no fiscal impact on Department's drug expenditures.