State of Illinois
2019 and 2020


Introduced 1/29/2020, by Rep. Anna Moeller


New Act

    Creates the Wholesale Importation of Prescription Drugs Act. Requires the Department of Public Health to design an importation program where the State is the licensed wholesaler of imported drugs from licensed, regulated Canadian suppliers. Requires the program to address specified issues, including billing issues, cost savings issues, and safety and regulatory issues. Contains auditing and reporting requirements. Provides that the Department shall enlist the assistance of the Attorney General to identify the potential for anti-competitive behavior in industries that would be affected by an importation program. Requires the Department to submit a formal request to the Secretary of the United States Department of Health and Human Services for certification of the importation program. Requires the Department to have the program operational within 6 months after receiving the certification. Contains provisions concerning implementation requirements.

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1    AN ACT concerning regulation.
2    WHEREAS, United States citizens pay some of the highest
3prices for prescription drugs in the world, and the Canadian
4government estimated that United States consumers pay twice as
5much as Canadians for patented prescription drugs and 20% more
6for generics; and
7    WHEREAS, Under the Food and Drug Administration's
8discretion not to enforce the law, individual patients may
9import a 90-day supply of prescription drugs from Canada that
10are less expensive than drugs licensed by the Food and Drug
11Administration in the United States; and
12    WHEREAS, Individual importation via the Internet increases
13consumer health and safety risks because many Internet
14pharmacies are not licensed in Canada and it is difficult to
15verify the validity, reputation, actual identity, and pharmacy
16practices of online pharmacies outside the United States; and
17    WHEREAS, The United States allows patients to go to other
18countries for surgeries and other high-risk medical treatments
19without regulating that consumer purchasing activity, and
20insurers sometimes facilitate and pay for treatments outside
21the United States; and
22    WHEREAS, The Food and Drug Administration estimates that
23currently 40% of finished prescription drug products are
24produced outside the United States and 80% of raw products for
25United States pharmaceutical manufacturing come from outside
26the United States; and



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1    WHEREAS, The Food and Drug Administration recently signed
2reciprocity agreements with European Union regulators to
3accept the results of European Union inspections of
4pharmaceutical manufacturing plants. The Food and Drug
5Administration has a Memorandum of Understanding for
6regulatory cooperation around pharmaceuticals with the
7Canadian regulatory authorities since 1973; and
8    WHEREAS, Canada has a rigorous regulatory system to license
9prescription drugs that is considered to be on par with the
10United States licensing system; and
11    WHEREAS, Title II of the federal Drug Quality and Security
12Act (P.L. 113-54), Drug Supply Chain Security, has resulted in
13improvements in drug security and safety through a system of
14pharmaceutical track and trace that can be leveraged for safe
15importation; and
16    WHEREAS, The Secretary of the United States Department of
17Health and Human Services may certify a prescription drug
18reimportation program that is safe and saves consumers money;
20    WHEREAS, The State can ensure that wholesale importation of
21prescription drugs from Canada into the State will be safe and
22cost-saving for State consumers; therefore
23    Be it enacted by the People of the State of Illinois,
24represented in the General Assembly:



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1    Section 1. Short title. This Act may be cited as the
2Wholesale Importation of Prescription Drugs Act.
3    Section 5. Definitions. As used in this Act:
4    "Department" means the Department of Public Health.
5    "Importation program" means a State-administered wholesale
6importation program where the State is the licensed wholesaler
7importing drugs from a licensed, regulated Canadian supplier,
8solely for distribution to voluntarily participating,
9State-licensed, and in-state pharmacies and administering
10providers for the exclusive purpose of dispensing to State
11residents with a valid prescription.
12    Section 10. Importation program. The Department shall
13design an importation program in consultation with relevant
14State stakeholders and federal offices and agencies that meets
15the relevant requirements of 21 U.S.C. 384, including
16requirements concerning safety and cost savings. In developing
17an importation program for federal certification, the
18Department shall address the following issues:
19        (1) That the program requires the Department to become
20    a licensed wholesaler for the purpose of seeking federal
21    certification and approval to import safe prescription
22    drugs that will provide savings to State consumers.
23        (2) That the program uses Canadian suppliers regulated
24    under the appropriate Canadian and provincial laws.



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1        (3) That the program has a process to sample the
2    purity, chemical composition, and potency of imported
3    products.
4        (4) That the program only imports those prescription
5    pharmaceuticals expected to generate substantial savings
6    for State consumers.
7        (5) That the program ensures imported products will not
8    be distributed, dispensed, or sold outside of this State's
9    borders.
10        (6) That the program ensures that voluntary
11    participants, State-licensed pharmacies, and administering
12    providers charge individual consumers and health plans the
13    actual acquisition cost of the imported, dispensed
14    product.
15        (7) That the program ensures health plan payment of the
16    product component of pharmacy and provider billing
17    reimburses no more than the actual acquisition cost of the
18    dispensed, imported product.
19        (8) That the program ensures participating health
20    plans keep their formularies and claims payment systems up
21    to date with the prescription drugs provided through the
22    importation program.
23        (9) That the program ensures participating health
24    plans base patient cost sharing on no more than the actual
25    acquisition cost of the dispensed, imported product.
26        (10) That the program require participating health



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1    plans to demonstrate to the Department how savings on
2    imported drugs are reflected in premiums.
3        (11) That the profit margin of any participating
4    wholesaler or distributor of imported pharmaceutical
5    products is limited to a specified amount established by
6    the Department.
7        (12) That the program does not import generic products
8    that would violate United States patent laws on United
9    States branded products.
10        (13) That the program complies with the requirements of
11    21 U.S.C. 581 through 21 U.S.C. 582 pertaining to the track
12    and trace requirements as enacted in Title II of the Drug
13    Security and Quality Act (P.L. 113-54) to the extent
14    practical and feasible before imported drugs come into
15    possession of the State wholesaler and complies fully after
16    imported drugs are in the possession of the State
17    wholesaler.
18        (14) That the program is adequately financed through a
19    fee on each prescription or other appropriate approach, but
20    the amount of the fee may not jeopardize significant
21    consumer savings.
22        (15) That the program includes an audit function to
23    ensure that:
24            (A) the Department has a sound methodology by which
25        to determine the most cost-effective products to
26        include in the importation program on an ongoing basis;



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1            (B) the Department has processes in place to select
2        Canadian suppliers of high quality, of high
3        performance, and in full compliance with Canadian law
4        and regulation and State pharmacy or wholesaler laws;
5            (C) imported drugs under the importation program
6        are not shipped, sold, or dispensed outside the State
7        once in the possession of the State;
8            (D) imported products are pure, unadulterated,
9        potent, and safe;
10            (E) participating pharmacies and administering
11        providers are not charging more than the actual
12        acquisition cost to any consumer or any participating
13        health plan;
14            (F) participating health plan formularies and
15        claims processing systems remain up to date with all
16        relevant aspects of the importation program;
17            (G) participating health plans base patient
18        coinsurance and other cost sharing on the actual
19        acquisition cost of covered, imported drugs;
20            (H) participating health plans reimburse
21        participating pharmacies and administering providers
22        the actual acquisition cost for imported, dispensed
23        product;
24            (I) the program is adequately financed to support
25        all administrative functions while generating
26        significant consumer savings;



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1            (J) the program does not put consumers at higher
2        risk than if the program did not exist; and
3            (K) the program continues to provide State
4        consumers with substantial savings on prescription
5        drugs.
6    Section 15. Monitoring for anti-competitive behavior. The
7Department shall enlist the assistance of the Attorney General
8to identify the potential for anti-competitive behavior in
9industries that would be affected by an importation program.
10    Section 20. Report to the General Assembly. The Department
11shall report to the General Assembly no later than 6 months
12after the effective date of this Act on the final importation
13program design that takes into consideration at least the items
14in Section 10. The report to the General Assembly shall be
15filed with the Clerk of the House of Representatives and the
16Secretary of the Senate in electronic form only, in the manner
17that the Clerk and the Secretary shall direct.
18    Section 25. Submission of request for federal
19certification and approval. No later than 2 weeks after the
20Department submits the report required under Section 20, the
21Department shall submit a formal request to the Secretary of
22the United States Department of Health and Human Services for
23certification of the importation program.



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1    Section 30. Implementation and additional administrative
2requirements. Upon certification and approval by the Secretary
3of the United States Department of Health and Human Services,
4the Department shall begin implementation of the importation
5program and have the program operational within 6 months after
6the date of the Secretary's certification. As part of the
7implementation process, the Department shall, in accordance
8with State procurement and contracting laws and rules as
10        (1) Become licensed as a wholesaler.
11        (2) Contract with a State-licensed distributor or
12    distributors.
13        (3) Contract with licensed, regulated Canadian
14    suppliers.
15        (4) Engage health plans, employers, pharmacies,
16    providers, and consumers.
17        (5) Develop a registration process for health plans,
18    pharmacies, and administering providers that are willing
19    to participate.
20        (6) Create a publicly available source for listing
21    prices of imported products that shall be available to all
22    participating entities and consumers.
23        (7) Create an outreach and marketing plan to generate
24    program awareness.
25        (8) Create and staff a hotline to answer questions from



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1    any affected sector starting in the weeks before the
2    program becomes operational that can address the needs and
3    questions of consumers, employers, plans, pharmacies, and
4    providers, among others.
5        (9) Establish the audit function and a 2-year audit
6    work plan cycle.
7        (10) Conduct any other activities determined to be
8    important to successful implementation, as determined by
9    the Department.
10    Section 35. Ongoing oversight of program administration.
11The Department shall report to the General Assembly every 6
12months, commencing with either the first June or December after
13implementation, whichever is the nearest date to the date that
14is 6 months after implementation of the importation program.
15The report to the General Assembly shall include the following:
16        (1) The drugs covered in the importation program.
17        (2) The number of participating pharmacies, providers,
18    and health plans.
19        (3) The number of prescriptions dispensed under the
20    program in the period.
21        (4) The estimated savings to consumers, health plans,
22    and employers that resulted from the program in the
23    reporting period and to date.
24        (5) In the first 3 reporting periods, information on
25    the implementation of the audit plan and, on an ongoing



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1    basis, audit findings for the reporting period.
2        (6) Any other information of importance, as determined
3    by the Department.
4    The report to the General Assembly shall be filed with the
5Clerk of the House of Representatives and the Secretary of the
6Senate in electronic form only, in the manner that the Clerk
7and the Secretary shall direct.