HOUSE BILL No. 4801

 

June 3, 2003, Introduced by Reps. Hoogendyk, Lipsey and Wenke and referred to the Committee on Appropriations.

        

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                 A bill to provide for and implement a pharmaceutical                              

                                                                                

    supplemental rebate pilot program; to provide for certain                   

                                                                                

    reports; and to prescribe powers and duties of certain state                

                                                                                

    departments and agencies.                                                   

                                                                                

                THE PEOPLE OF THE STATE OF MICHIGAN ENACT:                      

                                                                                

1       Sec. 1.  As used in this act:                                               

                                                                                

2       (a) "Department" means the department of community health.                  

                                                                                

3       (b) "Eligible pharmaceutical company" means a company that                  

                                                                                

4   meets all of the following criteria:                                        

                                                                                

5                                                                                (i) Is engaged primarily in manufacturing, research and                             

                                                                                

6   development, and sale of pharmaceuticals.                                   

                                                                                

7       (ii) Has not less than 8,500 employees located in this state,                

                                                                                

8   all of whom are located within a 100-mile radius of each other.             

                                                                                

9       (iii) Of the total number of employees located in this state,                

                                                                                

10  has not less than 5,000 engaged primarily in research and                   

                                                                                


                                                                                

1   development of pharmaceuticals.                                             

                                                                                

2       (c) "Medicaid" means the program for medical assistance                     

                                                                                

3   established under title XIX of the social security act, chapter             

                                                                                

4   531, 49 Stat. 620, 42 U.S.C. 1396 to 1396f, 1396g-1 to 1396r-6,             

                                                                                

5   and 1396r-8 to 1396v, and administered by the department under              

                                                                                

6   the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b.                 

                                                                                

7       (d) "Supplemental rebate" means a rebate over and above those               

                                                                                

8   required under the medicaid program and may include cash,                   

                                                                                

9   services, or other benefits that will reduce the cost of                    

                                                                                

10  pharmaceuticals and guarantee a savings to this state's medicaid            

                                                                                

11  program.                                                                    

                                                                                

12      Sec. 3.  (1) The department shall, in good faith, negotiate                 

                                                                                

13  a supplemental rebate agreement with an eligible pharmaceutical             

                                                                                

14  company.  If an agreement is not reached within 3 months after              

                                                                                

15  the effective date of this act, the department shall notify the             

                                                                                

16  legislature as to the progress of the negotiations.                         

                                                                                

17      (2) The supplemental rebate agreement shall include, but is                 

                                                                                

18  not limited to, an agreement to consider a product manufactured             

                                                                                

19  by the eligible pharmaceutical company for inclusion on the                 

                                                                                

20  department's preferred drug list in return for the provision of             

                                                                                

21  services that will offset a state medicaid expenditure, such as             

                                                                                

22  disease management programs, health and fitness prevention                  

                                                                                

23  programs, drug product donation programs, drug utilization                  

                                                                                

24  control programs, prescriber and beneficiary counseling and                 

                                                                                

25  education, fraud and abuse initiatives, and other services or               

                                                                                

26  administrative investments with guaranteed savings to the                   

                                                                                

27  medicaid program.                                                           


                                                                                

1       (3) The supplemental rebate agreement shall continue for a                  

                                                                                

2   period of 5 years beginning January 1, 2004.  Not later than                

                                                                                

3   January 1, 2005, and each year thereafter, the department shall             

                                                                                

4   issue an interim report to the governor, the legislature, and the           

                                                                                

5   chairpersons of the appropriations subcommittees in the senate              

                                                                                

6   and the house of representatives having jurisdiction over the               

                                                                                

7   community health budget regarding the progress of the program.              

                                                                                

8   Not later than January 1, 2009, the department shall issue a                

                                                                                

9   final report to the governor, the legislature, and the                      

                                                                                

10  chairpersons of the appropriations subcommittees in the senate              

                                                                                

11  and the house of representatives having jurisdiction over the               

                                                                                

12  community health budget summarizing the effectiveness and the               

                                                                                

13  results achieved by the program and the ongoing viability of the            

                                                                                

14  program.  If the legislature determines that the program has been           

                                                                                

15  successful in reducing the cost of health care, the department              

                                                                                

16  may negotiate an agreement to continue the program indefinitely.            

                                                                                

17      Sec. 5.  The provisions of this act or the agreement entered                

                                                                                

18  into under this act shall not supersede the pharmaceutical best             

                                                                                

19  practices initiative and shall be interpreted and administered to           

                                                                                

20  the extent not inconsistent but in cooperation with the                     

                                                                                

21  pharmaceutical best practices initiative.