Illinois General Assembly - Full Text of HB1462
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Full Text of HB1462  102nd General Assembly

HB1462ham001 102ND GENERAL ASSEMBLY

Rep. Janet Yang Rohr

Filed: 4/4/2022

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 1462

2    AMENDMENT NO. ______. Amend House Bill 1462 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Prescription Drug Affordability Act.
 
6    Section 5. The General Assembly finds that:
7    (1) Prescription drugs are an essential part of good
8health care and a critical component of our health care
9system. Illinoisans spend $13,000,000,000 each year on
10prescription drugs and have a vested interest in ensuring they
11are affordable. People living with chronic conditions need
12prescription drugs to function and stay healthy. Their quality
13of life is dependent on them. Access to prescription drugs can
14be the difference between life and death.
15    (2) Illinoisans have faced increasing challenges in
16affording the prescription drugs they depend upon to be

 

 

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1healthy. The costs of brand name drugs have increased 60%
2since 2014 and annual cost increases regularly outpace medical
3inflation.
4    (3) Affordability challenges have led more and more
5Illinoisans to skip doses of prescribed medication and
6otherwise ration their medication. An estimated 46,000,000
7Americans have skipped or rationed their medications due to
8cost, sometimes leading to serious medical complications.
9    (4) The increase in prescription drug costs is the leading
10driver of increases in health insurance premiums. High
11prescription drug costs raise State costs under Medicaid and
12the State Employee Group Insurance Program, raise employer
13benefits costs, and are passed onto individuals and families.
14    (5) It is the traditional role of State government to
15protect the health, safety, and welfare of its residents.
16Illinois has a long history of ensuring services and products
17essential to life and health, such as clean water and
18electricity, are affordable. The State has a compelling reason
19to ensure prescription drug costs balance consumer access and
20returns for industry.
21    (6) The current system is causing affordability challenges
22for those who depend on insulin. The average cost of insulin
23tripled from 2002 to 2013, and one out of every 4 individuals
24living with diabetes has had to ration his or her insulin due
25to cost. This can lead to serious complications including
26kidney failure, heart disease, blindness, amputations, and

 

 

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1death.
2    (7) The current system is causing affordability challenges
3for those who need prescription drugs to treat multiple
4sclerosis (MS). Early and ongoing treatment with a
5disease-modifying therapy for MS is the best way to modify the
6course of the disease, prevent accumulation of disability, and
7protect the brain, yet many people cannot access the
8medications they need. It is estimated that 40% of those
9living with MS skip doses of medications due to cost. These
10medications routinely cost $80,000 per year or more and have
11increased five-fold since they first came to market in the
121990s.
13    (8) The current system is causing affordability challenges
14for those who need prescription drugs to treat cancer.
15Prescriptions to treat cancer routinely cost more than
16$100,000 per year. The incremental increase in cost for a
17course of treatment increased from $30,447 in 2006 to $161,141
18in 2015. Cancer survivors are 2.7 times more likely to file for
19bankruptcy than those who have not been diagnosed with cancer.
20    (9) The current system is causing affordability challenges
21for those who need prescription drugs to treat rheumatoid
22arthritis. Medications to treat rheumatoid arthritis increased
2370% in only 3 years. The initial cost of rheumatoid arthritis
24medication was $10,000 per year when it was first introduced,
25but has increased to $40,000 per year despite several
26alternatives coming to market.

 

 

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1    (10) And yet, some extremist politicians in Washington,
2D.C., including several representatives of the Illinois
3delegation, have shamefully blocked efforts to control
4prescription drug prices, choosing pharmaceutical profits over
5patient care.
6    (11) The State and its residents are facing numerous
7affordability challenges across many classes of drugs. The
8current system has not produced affordable costs. An Illinois
9Prescription Drug Affordability Board that can review multiple
10classes of drugs across the supply chain is therefore
11necessary to determine how best to deliver prescription drug
12costs that are affordable to all Illinoisans.
 
13    Section 10. Definitions. In this Act:
14    "Biologic" means a drug that is produced or distributed in
15accordance with a biologics license application approved under
1642 U.S.C. 447.502.
17    "Biosimilar" means a drug that is produced or distributed
18in accordance with a biologics license application approved
19under 42 U.S.C. 262(k)(3).
20    "Board" means the Prescription Drug Affordability Board.
21    "Brand name drug" means a drug that is produced or
22distributed in accordance with an original new drug
23application approved under 21 U.S.C. 355(c). "Brand name drug"
24does not include an authorized generic drug as defined by 42
25CFR 447.502.

 

 

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1    "Council" means the Prescription Drug Affordability
2Stakeholder Council.
3    "Generic drug" means:
4        (1) a retail drug that is marketed or distributed in
5    accordance with an abbreviated new drug application,
6    approved under 21 U.S.C. 355(j);
7        (2) an authorized generic drug as defined by 42 CFR
8    447.502; or
9        (3) a drug that entered the market before 1962 that
10    was not originally marketed under a new drug application.
11    "Manufacturer" means an entity that:
12        (1) engages in the manufacture of a prescription drug
13    product; or
14        (2) enters into a lease with another manufacturer to
15    market and distribute a prescription drug product under
16    the entity's own name; and
17        (3) sets or changes the wholesale acquisition cost of
18    the prescription drug product it manufactures or markets.
19    "Prescription drug product" means a brand name drug, a
20generic drug, a biologic, or a biosimilar.
 
21    Section 15. Prescription Drug Affordability Board.
22    (a) There is established a Prescription Drug Affordability
23Board. The purpose of the Board is to protect State residents,
24State and local governments, commercial health plans, health
25care providers, pharmacies licensed in the State, and other

 

 

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1stakeholders within the health care system from the high costs
2of prescription drug products. The Board is a public body and
3is an instrumentality of the State. The Board is an
4independent unit of State government. The exercise by the
5Board of its authority under this Act is an essential
6function.
7    (b) The 5 members of the Board and 5 alternates shall be
8appointed by the Governor with the advice and consent of the
9Senate. The Governor shall select one member to serve as
10Chair. If the Senate is not in session when the first
11appointments are made, the Governor shall make temporary
12appointments as in the case of a vacancy. No Board seat shall
13remain vacant more than 60 consecutive days.
14    (c) The Board members and alternates must collectively
15have expertise in health care economics and clinical medicine.
16A member or an alternate member may not be an employee of, a
17board member of, or a consultant to a manufacturer or trade
18association for manufacturers.
19    (d) Any conflict of interest, including whether the
20individual has an association, including a financial or
21personal association, that has the potential to bias or has
22the appearance of biasing an individual's decision in matters
23related to the Board or the conduct of the Board's activities,
24shall be considered and disclosed when appointing members and
25alternate members to the Board.
26    (e) The term of a member or an alternate member is 5 years.

 

 

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1The terms of the members and alternate members shall be
2staggered.
3    (f) The Chair shall hire an executive director, general
4counsel, and staff for the Board. Staff of the Board shall
5receive a salary as provided in the budget of the Board. A
6member of the Board: (i) may receive compensation as a member
7of the Board; and (ii) is entitled to reimbursement for
8expenses.
9    (g) A majority of the members of the Board shall
10constitute a quorum for the purposes of conducting the
11business of the Board.
12    (h) Subject to the requirements of this subsection (h),
13the Board shall meet in open session at least once every 6
14weeks to review prescription drug product information.
15Information concerning the location, date, and time of the
16meeting must be made publicly available in accordance with the
17Open Meetings Act. The Chair may cancel or postpone a meeting
18if there are no prescription drug products to review.
19    The Board shall perform the following actions in open
20session: (i) deliberations on whether to subject a
21prescription drug product to a cost review; (ii) any vote on
22whether to impose an upper payment limit on purchases and
23payor reimbursements of prescription drug products in the
24State; and (iii) any decision by the Board. The Board may
25otherwise meet in closed session to discuss proprietary data
26and information.

 

 

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1    The Board shall provide public notice of each Board
2meeting at least 2 weeks in advance of the meeting. Materials
3for each Board meeting shall be made available to the public at
4least one week in advance of the meeting. The Board shall
5provide an opportunity for public comment at each open meeting
6of the Board. The Board may not make any binding decisions
7unless this comment period has been provided with a sufficient
8amount of time. The Board shall provide the public with the
9opportunity to provide written comments on pending decisions
10of the Board. The Board may allow expert testimony at Board
11meetings, including when the Board meets in closed session.
12    Members of the Board shall recuse themselves from
13decisions related to a prescription drug product and disclose
14interests if the member, or an immediate family member of the
15member, has received or could receive any of the following:
16(i) a direct financial benefit of any amount deriving from the
17result or finding of a study or determination by or for the
18Board; or (ii) a financial benefit from any person that owns,
19manufactures, or provides prescription drug products,
20services, or items to be studied by the Board that in the
21aggregate exceeds $5,000 per year. A disclosure of interests
22under this paragraph shall include the type, nature, and
23magnitude of the interests of the member or his or her
24immediate family member involved. For the purposes of this
25paragraph, a financial benefit includes honoraria, fees,
26stock, the value of the member's or immediate family member's

 

 

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1stock holdings, and any direct financial benefit deriving from
2the finding of a review conducted under this Act.
3    A conflict of interest shall be disclosed in advance of
4the first open meeting after the conflict is identified or
5within 5 days after the conflict is identified. A conflict of
6interest shall be disclosed by: (i) the Board when hiring
7Board staff; (ii) the appointing authority when appointing
8members and alternate members to the Board and members to the
9Council; and (iii) the Board when a member of the Board is
10recused in any final decision resulting from a review of a
11prescription drug product. A conflict of interest disclosed
12under this Section shall be posted on the website of the Board
13unless the Chair of the Board recuses the member from any final
14decision resulting from a review of a prescription drug
15product.
16    Members and alternate members of the Board, Board staff,
17and third-party contractors may not accept any gift or
18donation of services or property that indicates a potential
19conflict of interest or has the appearance of biasing the work
20of the Board.
 
21    Section 20. Powers and duties of the Board.
22    (a) In furtherance of this Act, the Board shall identify
23prescription drug products that may create affordability
24challenges for residents of the State and conduct an
25affordability review for a minimum of 10 such prescription

 

 

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1drug products over the course of a 12-month period. The Board
2has the authority to set an upper payment limit for such
3prescription drug products.
4    (b) To the extent practicable, the Board shall access
5pricing information for prescription drug products by: (i)
6entering into a memorandum of understanding with another state
7to which manufacturers already report pricing information; and
8(ii) accessing other available pricing information.
9    (c) In addition to the powers set forth elsewhere in this
10Act, the Board may: (i) adopt rules for the implementation of
11this Act; (ii) enter into a contract with a qualified,
12independent third party for any service necessary to carry out
13the powers and duties of the Board; and (iii) exercise any and
14all other powers necessary or desirable to accomplish the
15purposes, objectives, and provisions of this Act and to
16perform its duties under this Act. Unless permission is
17granted by the Board, a third party hired by the Board may not
18release, publish, or otherwise use any information to which
19the third party has access under its contract.
 
20    Section 25. Prescription Drug Affordability Stakeholder
21Council.
22    (a) The Prescription Drug Affordability Stakeholder
23Council is created.
24    (b) The purpose of the Council is to provide stakeholder
25input to assist the Board in making decisions as required

 

 

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1under this Act.
2    (c) The Council shall consist of 25 members appointed 5
3each by the Governor, the Speaker of the House of
4Representatives, the Minority Leader of the House of
5Representatives, the President of the Senate, and the Minority
6Leader of the Senate, and shall represent the following
7entities:
8        (1) two representative of a statewide health care
9    advocacy coalition;
10        (2) one representative of a statewide advocacy
11    organization for seniors;
12        (3) one representative of a statewide organization for
13    diverse communities;
14        (4) two representative of a labor union;
15        (5) two health services researchers specializing in
16    prescription drugs;
17        (6) one representative of doctors;
18        (7) one representative of nurses;
19        (8) one representative of hospitals;
20        (9) one representative of health insurers;
21        (10) one representative of the Governor's Office of
22    Management and Budget;
23        (11) one clinical researcher;
24        (12) one representative of brand name drug
25    corporations;
26        (13) one representative of generic drug corporations;

 

 

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1        (14) one representative of employers;
2        (15) one representative of pharmacy benefit managers;
3        (16) one representative of pharmacists;
4        (17) one representative of pharmacologists; and
5        (18) five members of the public.
6    (d) The members of the Council shall have knowledge of one
7or more of the following:
8        (1) the pharmaceutical business model;
9        (2) supply chain business models;
10        (3) the practice of medicine or clinical training;
11        (4) consumer or patient perspectives;
12        (5) health care costs, trends, and drivers;
13        (6) clinical and health services research; or
14        (7) the State's health care marketplace.
15    (e) From among the membership of the Council, the Board
16chair shall appoint 2 members to be co-chairs of the Council.
17    (f) The term of a member is 3 years. The initial members of
18the Council shall serve staggered terms.
19    (g) A member of the Council may not receive compensation
20as a member of the Council, but is entitled to reimbursement
21for travel expenses.
22    (h) The Board shall ensure Council membership in
23accordance with this Section and may deny appointment if
24appointees do not comply. No Council seat shall remain vacant
25more than 60 consecutive days.
 

 

 

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1    Section 30. Drug cost affordability review.
2    (a) The Board shall identify the following prescription
3drug products and determine whether each identified
4prescription drug product should be subject to a cost review
5as described in subsection (e):
6        (1) brand name drugs and biologics that, as adjusted
7    annually for inflation in accordance with the Consumer
8    Price Index, have:
9            (A) a launch wholesale acquisition cost of $30,000
10        or more for a year or course of treatment; or
11            (B) a wholesale acquisition cost increase of
12        $3,000 or more in any 12-month period, or course of
13        treatment if less than 12 months;
14        (2) biosimilar drugs that have a launch wholesale
15    acquisition cost that is not at least 15% lower than the
16    referenced brand biologic at the time the biosimilar is
17    launched;
18        (3) generic drugs that, as adjusted annually for
19    inflation in accordance with the Consumer Price Index,
20    have a wholesale acquisition cost:
21            (A) of $100 or more for:
22                (i) a 30-day supply lasting a patient for a
23            period 30 consecutive days based on the
24            recommended dosage approved for labeling by the
25            United States Food and Drug Administration;
26                (ii) a supply lasting a patient for fewer than

 

 

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1            30 days based on the recommended dosage approved
2            for labeling by the United States Food and Drug
3            Administration; or
4                (iii) one unit of the drug if the labeling
5            approved by the United States Food and Drug
6            Administration does not recommend a finite dosage;
7            and
8            (B) that increased by 200% or more during the
9        preceding 12-month period, as determined by the
10        difference between the resulting wholesale acquisition
11        cost and the average of the wholesale acquisition cost
12        reported over the preceding 12 months; and
13        (4) in consultation with the Council, prescription
14    drug products that may create affordability challenges for
15    the State healthcare system, including patients.
16    (b) After identifying a prescription drug product as
17required under subsection (a), the Board shall determine
18whether to conduct a cost review as described in subsection
19(e) for each identified prescription drug product by:
20        (1) seeking Council input about the prescription drug
21    product; and
22        (2) considering the average patient cost share of the
23    prescription drug product.
24    (c) The information to conduct an affordability review may
25include any document and research related to the
26manufacturer's selection of the introductory price or price

 

 

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1increase of the prescription drug product, including life
2cycle management, net average price in the State, market
3competition and context, projected revenue, and the estimated
4value or cost–effectiveness of the prescription drug product.
5    (d) A manufacturer shall provide such reports as the Board
6deems necessary for the Board to conduct an affordability
7review. The Board shall not unreasonably request information
8that constitutes proprietary, privileged, or confidential
9trade secrets under the Freedom of Information Act. Failure of
10a manufacturer to provide the Board with the information for
11an affordability review does not affect the authority of the
12Board to conduct such a review.
13    (e) If the Board conducts a review of the cost and
14affordability of a prescription drug product, the review shall
15determine whether use of the prescription drug product that is
16fully consistent with the labeling approved by the United
17States Food and Drug Administration or standard medical
18practice has led or will lead to affordability challenges for
19the State health care system or high out-of-pocket costs for
20patients. To the extent practicable, in determining whether a
21prescription drug product has led or will lead to an
22affordability challenge, the Board shall consider the
23following factors:
24        (1) the wholesale acquisition cost for the
25    prescription drug product sold in this State;
26        (2) the average monetary price concession, discount,

 

 

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1    or rebate the manufacturer provides to health plans in
2    this State or is expected to provide to health plans in
3    this State as reported by manufacturers and health plans,
4    expressed as a percent of the wholesale acquisition cost
5    for the prescription drug product under review;
6        (3) the total amount of the price concession,
7    discount, or rebate the manufacturer provides to each
8    pharmacy benefit manager operating in this State for the
9    prescription drug product under review, as reported by
10    manufacturers and pharmacy benefit managers, expressed as
11    a percent of the wholesale acquisition costs;
12        (4) the price at which therapeutic alternatives have
13    been sold in this State;
14        (5) the average monetary concession, discount, or
15    rebate the manufacturer provides or is expected to provide
16    to health plan payors and pharmacy benefit managers in
17    this State for therapeutic alternatives;
18        (6) the costs to health plans based on patient access
19    consistent with Federal Food and Drug Administration
20    labeled indications and recognized standard medical
21    practice;
22        (7) the impact on patient access resulting from the
23    cost of the prescription drug product relative to
24    insurance benefit design;
25        (8) the current or expected dollar value of
26    drug-specific patient access programs that are supported

 

 

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1    by the manufacturer;
2        (9) the relative financial impacts to health, medical,
3    or social services costs as can be quantified and compared
4    to baseline effects of existing therapeutic alternatives;
5        (10) the average patient co-pay or other cost-sharing
6    for the prescription drug product in this State;
7        (11) any information a manufacturer chooses to
8    provide; and
9        (12) any other factors as determined by the Board in
10    rules adopted by the Board.
11    (f) If the Board finds that the spending on a prescription
12drug product reviewed under this Section has led or will lead
13to an affordability challenge, the Board shall establish an
14upper payment limit after considering: (i) the cost of
15administering the drug; (ii) the cost of delivering the drug
16to consumers; and (iii) other relevant administrative costs
17related to the drug. The upper payment limit applies to all
18purchases and payor reimbursements of the prescription drug
19product dispensed or administered to individuals in the State
20in person, by mail, or by other means.
21    (g) Any information submitted to the Board in accordance
22with this Section shall be subject to public inspection only
23to the extent allowed under the Freedom of Information Act.
24    (h) This Section may not be construed to prevent a
25manufacturer from marketing a prescription drug product
26approved by the United States Food and Drug Administration

 

 

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1while the product is under review by the Board.
 
2    Section 35. Remedies. The Attorney General shall have
3authority to enforce this Act. The Attorney General may pursue
4any available remedy under State or federal law to accomplish
5the objectives of this Act. Notwithstanding any other
6provision of law to the contrary, the Board and its staff shall
7forward any complaints regarding alleged violations of this
8Act or any consumer protection law or other law to the Attorney
9General and work cooperatively with the Attorney General.
10Nothing in this Section shall be construed to limit the
11remedies available under State or federal law that provide
12greater or equal protection to consumers.
 
13    Section 40. Appeal of Board decisions.
14    (a) A person aggrieved by a decision of the Board may
15request an appeal of the decision within 30 days after the
16finding of the Board.
17    (b) The Board shall hear the appeal and make a final
18decision within 60 days of the hearing.
19    (c) Any person aggrieved by a final decision of the Board
20may petition for judicial review.
 
21    Section 45. Prescription Drug Affordability Board Fund.
22    (a) In this Section, "fund" means the Prescription Drug
23Affordability Board Fund.

 

 

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1    (b) The Prescription Drug Affordability Board Fund is
2created. The fund shall be used only to provide funding for the
3Board and for the purposes authorized under this Act,
4including any costs expended by any State agency to implement
5this Act.
6    (c) Any investment earnings shall be retained to the
7credit of the fund.
8    (d) This Section may not be construed to prohibit the fund
9from receiving moneys from any other source.
10    (e) The Board shall be established using general funds.
 
11    Section 50. Report.
12    (a) On or before December 31 of each year, the Board shall
13submit to the General Assembly a report that includes:
14        (1) price trends for prescription drug products;
15        (2) the number of prescription drug products that were
16    subject to Board review, including the results of the
17    review and the number and disposition of appeals and
18    judicial reviews of Board decisions; and
19        (3) any recommendations the Board may have on further
20    legislation needed to make prescription drug products more
21    affordable in this State.
22    (b) On or before June 1, 2023, the Prescription Drug
23Affordability Board shall:
24        (1) conduct a study of the operation of the generic
25    drug market in the United States that includes a review of

 

 

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1    physician-administered drugs and considers:
2            (A) the prices of generic drugs on a
3        year-over-year basis;
4            (B) the degree to which generic drug prices affect
5        yearly insurance premium changes;
6            (C) annual changes in insurance cost-sharing for
7        generic drugs;
8            (D) the potential for and history of drug
9        shortages;
10            (E) the degree to which generic drug prices affect
11        yearly State Medicaid spending; and
12            (F) any other relevant study questions; and
13        (2) report its findings to the General Assembly.
 
14    Section 55. Term expiration.
15    (a) The terms of the initial members and alternate members
16of the Prescription Drug Affordability Board shall expire as
17follows:
18        (1) one member and one alternate member in 2023;
19        (2) two members and 2 alternate members in 2024; and
20        (3) two members, including the Chair of the Board, and
21    2 alternate members in 2025.
22    (b) The terms of the initial members of the Prescription
23Drug Affordability Stakeholder Council shall expire as
24follows:
25        (1) eight members in 2023;

 

 

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1        (2) eight members in 2024; and
2        (3) nine members in 2025.
 
3    Section 60. ERISA plans and Medicare drug plans. This Act
4obligates State-sponsored and State-regulated health plans and
5health programs to limit drug reimbursements and drug payment
6to no more than the Board-established upper payment limit.
7Employee Retirement Income Security Act (ERISA) plans and
8Medicare Part D plans are not bound by decisions of the Board
9and can choose to reimburse more than the upper payment limit.
10Providers who dispense and administer drugs in this State to
11individuals in this State are bound to bill all payers no more
12than the upper payment limit to the patient without regard to
13whether or not an ERISA plan or Medicare Part D plan chooses to
14reimburse the provider above the upper payment limit.
 
15    Section 97. Severability. If any provision of this Act or
16the application thereof to any person or circumstance is held
17invalid for any reason in a court of competent jurisdiction,
18the invalidity does not affect other provisions or any other
19application of this Act that can be given effect without the
20invalid provision or application, and for this purpose the
21provisions of this Act are declared severable.
 
22    Section 900. The State Finance Act is amended by adding
23Section 5.970 as follows:
 

 

 

10200HB1462ham001- 22 -LRB102 03478 CPF 38647 a

1    (30 ILCS 105/5.970 new)
2    Sec. 5.970. The Prescription Drug Affordability Board
3Fund.
 
4    Section 999. Effective date. This Act takes effect January
51, 2023.".