[ Back ] [ Bottom ]
91_HB3036eng
HB3036 Engrossed LRB9110165SMdvA
1 AN ACT concerning discount prescription drugs for senior
2 citizens.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 1. Short title. This Act may be cited as the
6 Senior Citizen Prescription Drug Discount Program Act.
7 Section 5. Findings. The General Assembly finds that:
8 (a) Although senior citizens represent 12% of the
9 population, they use on average 37% of prescription drugs
10 that are dispensed.
11 (b) Senior citizens in the United States without
12 prescription drug insurance coverage pay the highest prices
13 in the world for needed medications.
14 (c) High prescription drug prices force many Illinois
15 seniors to go without proper medication or other necessities,
16 thereby affecting their health and safety.
17 (d) Prescription drug prices in the United States are
18 the world's highest, averaging 32% higher than in Canada, 40%
19 higher than in Mexico, and 60% higher than in Great Britain.
20 (e) Prescription drug prices listed on the Federal
21 Supply Schedule that serve the Veterans Administration, the
22 Department of Defense, and the Coast Guard average 52% below
23 the non-federal average manufacturer's price.
24 (f) Regardless of household income, seniors without
25 prescription drug coverage are often just one serious illness
26 away from poverty.
27 (g) Reducing the price of prescription drugs would
28 benefit the health and well-being of all Illinois senior
29 citizens by providing more affordable access to needed drugs.
30 (h) Drug prices on the Federal Supply Schedule are
31 negotiated by the Department of Veterans Affairs and are the
HB3036 Engrossed -2- LRB9110165SMdvA
1 best publicly available indicator of the prices that drug
2 companies charge their favored customers.
3 Section 10. Purpose. The purpose of this Program is to
4 require the Department of Revenue to establish and administer
5 a program that will enable eligible senior citizens to
6 purchase prescription drugs at discounted prices.
7 Section 15. Definitions. As used in this Act:
8 "Authorized pharmacy" means any pharmacy registered in
9 this State under the Pharmacy Practice Act of 1987 and
10 approved by the Department.
11 "AWP" or "Average wholesale price" means the amount
12 determined from the latest publication of the Blue Book, a
13 universally subscribed pharmacist reference guide annually
14 published by the Hearst Corporation. "AWP" or "Average
15 wholesale price" may also be derived electronically from the
16 drug pricing database synonymous with the latest publication
17 of the Blue Book and furnished in the National Drug Data File
18 (NDDF) by First Data Bank (FDB), a service of the Hearst
19 Corporation.
20 "Department" means the Illinois Department of Revenue.
21 "Director" means the Director of Revenue.
22 "Drug manufacturer" means any entity located within or
23 outside Illinois that is engaged in (i) the production,
24 preparation, propagation, compounding, conversion, or
25 processing of prescription drug products covered under the
26 Program, either directly or indirectly by extraction from
27 substances of natural origin, independently by means of
28 chemical synthesis, or by a combination of extraction and
29 chemical synthesis or (ii) the packaging, repackaging,
30 leveling, labeling, or distribution of prescription drug
31 products covered under the Program. "Drug manufacturer",
32 however, does not include a wholesale distributor of drugs or
HB3036 Engrossed -3- LRB9110165SMdvA
1 a retail pharmacy licensed under Illinois law.
2 "Eligible senior" means a person who is (i) a resident of
3 Illinois and (ii) 65 years of age or older.
4 "Federal Supply Schedule" or "FSS" means a price
5 catalogue containing goods available for purchase by federal
6 agencies. Drug prices on the FSS are negotiated by the
7 (U.S.) Department of Veterans' Affairs and are the best
8 publicly available indicator of prices drug companies charge
9 favored customers.
10 "Prescription drug" means any prescribed drug that may be
11 legally dispensed by an authorized pharmacy.
12 "Program" means the Senior Citizen Prescription Drug
13 Discount Program created under this Act.
14 "Rules" includes rules promulgated and forms prescribed
15 by the Department.
16 Section 20. The Senior Citizen Prescription Drug Discount
17 Program. The Senior Citizen Prescription Drug Discount
18 Program is established to protect the health and safety of
19 senior citizens. The Program shall be administered by the
20 Department. The Department shall (i) enroll eligible seniors
21 into the Program to qualify them for a discount on the
22 purchase of prescription drugs at an authorized pharmacy,
23 (ii) enter into rebate agreements with drug manufacturers,
24 and (iii) reimburse pharmacies for the cost of providing
25 discounts using the proceeds from the manufacturer rebate
26 agreements.
27 Section 25. Prescription drug prices.
28 (a) Beginning on January 1, 2001, the amount paid by
29 eligible seniors enrolled in the Program to authorized
30 pharmacies for prescription drugs may not exceed prices
31 listed on the Federal Supply Schedule plus a dispensing fee
32 calculated as provided in Section 3.16 of the Senior Citizens
HB3036 Engrossed -4- LRB9110165SMdvA
1 and Disabled Persons Property Tax Relief and Pharmaceutical
2 Assistance Act. Nothing in this Act precludes any authorized
3 pharmacy from charging less than the listed price on the
4 Federal Supply Schedule. The Department must provide the
5 applicable Federal Supply Schedule to authorized pharmacies.
6 For prescription drugs that are not listed on the Federal
7 Supply Schedule, the amount paid by eligible seniors enrolled
8 in the Program to authorized pharmacies may not exceed the
9 AWP minus 35% plus a dispensing fee calculated as provided in
10 Section 3.16 of the Senior Citizens and Disabled Persons
11 Property Tax Relief and Pharmaceutical Assistance Act.
12 (b) Subject to the requirements of the State Prompt
13 Payment Act, the Department shall compensate authorized
14 pharmacies from the Senior Citizen Prescription Drug Discount
15 Program Fund for the difference between the amount paid by
16 eligible seniors for prescription drugs dispensed under the
17 Program and the AWP minus 10%.
18 Section 30. Manufacturer rebate agreements.
19 (a) Each drug manufacturer that distributes a
20 prescription drug for sale in Illinois and has an agreement
21 with any payor of prescription drug benefits that results in
22 a reduction in price for prescription drugs sold by an
23 authorized pharmacy shall also enter into a rebate agreement
24 with the Department to enable persons eligible for benefits
25 under this Program to purchase prescription drugs at a
26 discounted price. The rebate agreement shall be equal to the
27 cost to the Department for reimbursing authorized pharmacies
28 under this Act pursuant to subsection (b) of Section 25. The
29 rebate agreement shall become effective the first day of the
30 calendar quarter that begins 60 days after the date the
31 agreement is entered into.
32 (b) The Department shall develop a model rebate
33 agreement for prescription drugs dispensed on and after the
HB3036 Engrossed -5- LRB9110165SMdvA
1 effective date of this Act.
2 (c) Rebate payment procedures. All rebates negotiated
3 under agreements described in this Section shall be paid to
4 the Department in accordance with procedures prescribed by
5 the Department. All rebates must be remitted to the
6 Department not later than 30 days after receipt of a request
7 for payment by the Department.
8 (d) The receipts from the rebates and moneys transferred
9 under Section 33 shall be deposited into the Senior Citizen
10 Prescription Drug Discount Program Fund, a special fund
11 hereby created in the State treasury, and shall be used,
12 subject to appropriation, to cover the cost of reimbursing
13 authorized pharmacies under this Act pursuant to subsection
14 (b) of Section 25.
15 Section 33. Transfer to Senior Citizen Prescription Drug
16 Discount Program Fund.
17 (a) Within 30 days after the effective date of this
18 amendatory Act of the 91st General Assembly, the State
19 Comptroller shall direct and the State Treasurer shall
20 transfer $27,000,000 from the General Revenue Fund to the
21 Senior Citizen Prescription Drug Discount Program Fund to
22 facilitate the payment of reimbursements to authorized
23 pharmacies. Repayment of principal and interest to the
24 General Revenue Fund shall be made so that the balance in the
25 General Revenue Fund will be restored as if the transfer to
26 the Senior Citizen Prescription Drug Discount Program Fund
27 had not been made. Upon a certification by the Department of
28 Revenue that the obligations under subsection (b) of Section
29 25 are being met, beginning on July 1, 2001, and on the 1st
30 of each month thereafter until the principal amount
31 transferred from the General Revenue Fund plus interest has
32 been repaid, the State Comptroller shall direct and the State
33 Treasurer shall transfer 1/12th of $27,000,000, or so much of
HB3036 Engrossed -6- LRB9110165SMdvA
1 that amount as is necessary, from the Senior Citizen
2 Prescription Drug Discount Program Fund to the General
3 Revenue Fund plus accrued interest. The balance of the
4 amount transferred from the General Revenue Fund shall bear
5 interest at the rate of 7.5% per annum until the required
6 transfers back into the General Revenue Fund have been
7 completed.
8 Section 35. Program eligibility.
9 (a) Any person may apply to the Department for
10 participation in the Program in the form and manner required
11 by the Department. The Department shall determine the
12 eligibility of each applicant for the Program within 30 days
13 after the date of application. To participate in the Program
14 an eligible senior whose application has been approved by the
15 Department must pay $25 upon enrollment and annually
16 thereafter and shall receive a Program identification card.
17 The card may be presented to an authorized pharmacy to assist
18 the pharmacy in verifying eligibility under the Program. The
19 Department shall deposit the enrollment fees collected into
20 the Senior Citizen Prescription Drug Discount Program Fund.
21 The monies collected by the Department for enrollment fees
22 and deposited into the Senior Citizen Prescription Drug
23 Discount Program Fund must be separately accounted for by the
24 Department. If 2 or more persons are eligible for any benefit
25 under this Act and are members of the same household, each
26 participating household member shall apply to the Department
27 and pay the fee required for the purpose of obtaining an
28 identification card.
29 (b) Proceeds from annual enrollment fees, subject to
30 appropriation, shall be used by the Department to offset the
31 administrative cost of this Act. The Department may reduce
32 the annual enrollment fee by rule if the revenue from the
33 enrollment fees is in excess of the costs to carry out the
HB3036 Engrossed -7- LRB9110165SMdvA
1 Program.
2 (c) Any person who is eligible for pharmaceutical
3 assistance under the Senior Citizens and Disabled Persons
4 Property Tax Relief and Pharmaceutical Assistance Act is
5 presumed to be eligible for this Program. That person may
6 purchase prescription drugs under this Program that are not
7 covered by the pharmaceutical assistance program under the
8 Senior Citizens and Disabled Persons Property Tax Relief and
9 Pharmaceutical Assistance Act by using the identification
10 card issued under the pharmaceutical assistance program.
11 Section 40. Eligible pharmacies.
12 (a) The Department shall promulgate rules to establish
13 standards and procedures for participation in the Program and
14 approve those pharmacies that apply to participate and meet
15 the requirements for participation. The Department may
16 remove the authorization of a pharmacy to participate in this
17 Program for failure to meet the standards and procedures for
18 participation established by the Department by rule. Any
19 pharmacy that has been removed as an authorized pharmacy by
20 the Department may apply for reinstatement as an authorized
21 pharmacy in accordance with standards and procedures
22 established by the Department by rule.
23 (b) The Department shall annually review the eligibility
24 of pharmacies to participate in the Program.
25 (c) The Department shall establish procedures for
26 properly contracting for pharmacy services, validating
27 reimbursement claims, validating compliance of authorized
28 pharmacies with the conditions for participation required
29 under this Act, and otherwise providing for the effective
30 administration of this Act. The Director, in consultation
31 with pharmacists licensed under the Pharmacy Practice Act of
32 1987, may enter into a written contract with any other State
33 agency, instrumentality, or political subdivision or with a
HB3036 Engrossed -8- LRB9110165SMdvA
1 fiscal intermediary for the purpose of making payments to
2 authorized pharmacies pursuant to subsection (b) of Section
3 25 and coordinating the Program with other programs that
4 provide payments for prescription drugs covered under the
5 Program.
6 Section 45. The Department shall promulgate rules to
7 implement and administer the Program, which shall include the
8 following:
9 (1) Execution of contracts with pharmacies to
10 participate in the Program. The contracts shall
11 stipulate terms and conditions for the participation of
12 authorized pharmacies and the rights of the State to
13 terminate participation for breach of the contract or for
14 violation of this Act or rules promulgated by the
15 Department under this Act.
16 (2) Establishment of maximum limits on the size of
17 prescriptions that are eligible for a discount under the
18 Program, up to a 90-day supply, except as may be
19 necessary for utilization control reasons.
20 (3) Establishment of liens upon any and all causes
21 of action that accrue to a beneficiary as a result of
22 injuries for which prescription drugs covered under the
23 Program are directly or indirectly required and for which
24 the Director made payment or became liable for under this
25 Act.
26 (4) Inspection of appropriate records and audits of
27 participating authorized pharmacies to ensure contract
28 compliance and to determine any fraudulent transactions
29 or practices under this Act.
30 Section 50. Report on administration of Program. The
31 Department shall report to the Governor and the General
32 Assembly by March 1st of each year on the administration of
HB3036 Engrossed -9- LRB9110165SMdvA
1 the Program under this Act.
2 Section 990. The State Finance Act is amended by adding
3 Section 5.541 as follows:
4 (30 ILCS 105/5.541 new)
5 Sec. 5.541. The Senior Citizen Prescription Drug
6 Discount Program Fund.
7 Section 999. Effective date. This Act takes effect July
8 1, 2000.
[ Top ]