Bill Text: IN SB0211 | 2012 | Regular Session | Introduced
Bill Title: Generic drug bidding program.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-01-04 - First reading: referred to Committee on Health and Provider Services [SB0211 Detail]
Download: Indiana-2012-SB0211-Introduced.html
Citations Affected: IC 12-7-2-91.7; IC 12-15-35.
Synopsis: Generic drug bidding program. Requires the drug utilization
review board (board) to establish a competitive bidding program for
generically equivalent drug product manufacturers (manufacturer) of
drugs in therapeutic drug classifications with at least three
manufactured generically equivalent drug products. Requires a
manufacturer that participates in Medicaid or the children's health
insurance program (CHIP) to participate in the competitive bidding
program. Requires the board to establish a Medicaid preferred generic
drug list (list) based on the successful bids and requires prior
authorization on the Medicaid program and CHIP for a generically
equivalent drug product that is not included on the list. Requires a
manufacturer of a generically equivalent drug product that is included
on the list to offer state supplement rebates. Requires the office of
Medicaid policy and planning to request bids under the competitive
bidding program at least one time every five years.
Effective: July 1, 2012.
January 4, 2012, read first time and referred to Committee on Health and Provider
Services.
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A BILL FOR AN ACT to amend the Indiana Code concerning
Medicaid.
(1) that contains an identical quantity of identical active ingredients in the identical dosage forms (but not necessarily containing the same inactive ingredients) that meet the identical physical and chemical standards in The United States Pharmacopeia (USP) described in IC 16-42-19-2, or its supplements, as the prescribed brand name drug; and
(2) if applicable, for which the manufacturer or distributor holds either an approved new drug application or an approved abbreviated new drug application unless other approval by law or of the federal Food and Drug Administration is required.
(b) The term does not include a drug product if the drug product is listed by the federal Food and Drug Administration on
or after July 1, 1987, as having actual or potential bioequivalence
problems.
(1) The adoption of rules to carry out this chapter, in accordance with the provisions of IC 4-22-2 and subject to any office approval that is required by the federal Omnibus Budget Reconciliation Act of 1990 under Public Law 101-508 and its implementing regulations.
(2) The implementation of a Medicaid retrospective and prospective DUR program as outlined in this chapter, including the approval of software programs to be used by the pharmacist for prospective DUR and recommendations concerning the provisions of the contractual agreement between the state and any other entity that will be processing and reviewing Medicaid drug claims and profiles for the DUR program under this chapter.
(3) The development and application of the predetermined criteria and standards for appropriate prescribing to be used in retrospective and prospective DUR to ensure that such criteria and standards for appropriate prescribing are based on the compendia and developed with professional input with provisions for timely revisions and assessments as necessary.
(4) The development, selection, application, and assessment of interventions for physicians, pharmacists, and patients that are educational and not punitive in nature.
(5) The publication of an annual report that must be subject to public comment before issuance to the federal Department of Health and Human Services and to the Indiana legislative council by December 1 of each year. The report issued to the legislative council must be in an electronic format under IC 5-14-6.
(6) The development of a working agreement for the board to clarify the areas of responsibility with related boards or agencies, including the following:
(A) The Indiana board of pharmacy.
(B) The medical licensing board of Indiana.
(C) The SURS staff.
(7) The establishment of a grievance and appeals process for physicians or pharmacists under this chapter.
(8) The publication and dissemination of educational information to physicians and pharmacists regarding the board and the DUR program, including information on the following:
(A) Identifying and reducing the frequency of patterns of fraud, abuse, gross overuse, or inappropriate or medically unnecessary care among physicians, pharmacists, and recipients.
(B) Potential or actual severe or adverse reactions to drugs.
(C) Therapeutic appropriateness.
(D) Overutilization or underutilization.
(E) Appropriate use of generic drugs.
(F) Therapeutic duplication.
(G) Drug-disease contraindications.
(H) Drug-drug interactions.
(I) Incorrect drug dosage and duration of drug treatment.
(J) Drug allergy interactions.
(K) Clinical abuse and misuse.
(9) The adoption and implementation of procedures designed to ensure the confidentiality of any information collected, stored, retrieved, assessed, or analyzed by the board, staff to the board, or contractors to the DUR program that identifies individual physicians, pharmacists, or recipients.
(10) The implementation of additional drug utilization review with respect to drugs dispensed to residents of nursing facilities shall not be required if the nursing facility is in compliance with the drug regimen procedures under 410 IAC 16.2-3.1 and 42 CFR 483.60.
(11) The research, development, and approval of a preferred drug list for:
(A) Medicaid's fee for service program;
(B) Medicaid's primary care case management program;
(C) Medicaid's risk based managed care program, if the office provides a prescription drug benefit and subject to IC 12-15-5; and
(D) the children's health insurance program under IC 12-17.6;
in consultation with the therapeutics committee.
(12) The approval of the review and maintenance of the preferred drug list at least two (2) times per year.
(13) The preparation and submission of a report concerning the preferred drug list at least two (2) times per year to the select joint commission on Medicaid oversight established by IC 2-5-26-3.
(14) The collection of data reflecting prescribing patterns related to treatment of children diagnosed with attention deficit disorder or attention deficit hyperactivity disorder.
(15) Advising the Indiana comprehensive health insurance
association established by IC 27-8-10-2.1 concerning
implementation of chronic disease management and
pharmaceutical management programs under IC 27-8-10-3.5.
(16) The establishment, in consultation with the office of the
secretary and the therapeutics committee, of a competitive
bidding program:
(A) in which manufacturers of generically equivalent drug
products participate; and
(B) for therapeutic drug classifications with at least three
(3) manufactured generically equivalent drug products;
as set forth in section 50.5 of this chapter.
(b) The board shall use the clinical expertise of the therapeutics
committee in developing a preferred drug list. The board shall also
consider expert testimony in the development of a preferred drug list.
(c) In researching and developing a preferred drug list under
subsection (a)(11), the board shall do the following:
(1) Use literature abstracting technology.
(2) Use commonly accepted guidance principles of disease
management.
(3) Develop therapeutic classifications for the preferred drug list.
(4) Give primary consideration to the clinical efficacy or
appropriateness of a particular drug in treating a specific medical
condition.
(5) Include in any cost effectiveness considerations the cost
implications of other components of the state's Medicaid program
and other state funded programs.
(d) Prior authorization is required for coverage under a program
described in subsection (a)(11) of a drug that is not included on the
preferred drug list.
(e) The board shall determine whether to include a single source
covered outpatient drug that is newly approved by the federal Food and
Drug Administration on the preferred drug list not later than sixty (60)
days after the date on which the manufacturer notifies the board in
writing of the drug's approval. However, if the board determines that
there is inadequate information about the drug available to the board
to make a determination, the board may have an additional sixty (60)
days to make a determination from the date that the board receives
adequate information to perform the board's review. Prior authorization
may not be automatically required for a single source drug that is newly
approved by the federal Food and Drug Administration, and that is:
(1) in a therapeutic classification:
(A) that has not been reviewed by the board; and
(B) for which prior authorization is not required; or
(2) the sole drug in a new therapeutic classification that has not been reviewed by the board.
(f) The board may not exclude a drug from the preferred drug list based solely on price.
(g) The following requirements apply to a preferred drug list developed under subsection (a)(11):
(1) Except as provided by IC 12-15-35.5-3(b) and IC 12-15-35.5-3(c), the office or the board may require prior authorization for a drug that is included on the preferred drug list under the following circumstances:
(A) To override a prospective drug utilization review alert.
(B) To permit reimbursement for a medically necessary brand name drug that is subject to generic substitution under IC 16-42-22-10.
(C) To prevent fraud, abuse, waste, overutilization, or inappropriate utilization.
(D) To permit implementation of a disease management program.
(E) To implement other initiatives permitted by state or federal law.
(2) All drugs described in IC 12-15-35.5-3(b) must be included on the preferred drug list.
(3) The office may add a drug that has been approved by the federal Food and Drug Administration to the preferred drug list without prior approval from the board.
(4) The board may add a drug that has been approved by the federal Food and Drug Administration to the preferred drug list.
(h) At least two (2) times each year, the board shall provide a report to the select joint commission on Medicaid oversight established by IC 2-5-26-3. The report must contain the following information:
(1) The cost of administering the preferred drug list.
(2) Any increase in Medicaid physician, laboratory, or hospital costs or in other state funded programs as a result of the preferred drug list.
(3) The impact of the preferred drug list on the ability of a Medicaid recipient to obtain prescription drugs.
(4) The number of times prior authorization was requested, and the number of times prior authorization was:
(A) approved; and
(B) disapproved.
(i) The board shall provide the first report required under subsection
(h) not later than six (6) months after the board submits an initial
preferred drug list to the office.
(1) Advise and make recommendations to the board in the board's development and maintenance of a preferred drug list under section 28 of this chapter.
(2) Submit to the board a proposed preferred drug list that has been approved by a majority of a quorum of the therapeutics committee.
(3) Advise and make recommendations to the board in the board's review and maintenance of a preferred drug list.
(4) Advise and make recommendations to the board in the board's development, establishment, and maintenance of the generically equivalent drug product competitive bidding program described in sections 28(a)(16) and 50.5 of this chapter.
(b) The board, in consultation with the therapeutics committee, shall review all bids submitted by generically equivalent drug product manufacturers, and based on the bids, recommend to the office two (2) manufacturers for each therapeutic drug classification that has at least three (3) manufactured generically equivalent drug products to provide generically equivalent drug products for Medicaid recipients and recipients under IC 12-17.6. The board shall maintain a Medicaid preferred generic drug list that includes the successful bids.
(c) The board shall use the following criteria in evaluating bids by a generically equivalent drug product manufacturer under this section:
(1) The manufacturer's ability to manage expenses of the
generically equivalent drug product.
(2) The manufacturer's proven ability to work with health
insurance programs.
(3) The manufacturer's efficiency of claim payment
procedures.
(4) The manufacturer's provider contracting, discounts, and
adequacy of network.
(5) Other criteria established by the office.
(d) The office shall enter into arrangements to require
generically equivalent drug product manufacturers on the
Medicaid preferred generic drug list to provide supplemental state
rebates based on the competitive bidding process of the generically
equivalent drug product.
(e) The office or a contractor of the office shall require prior
authorization under the Medicaid program and the children's
health insurance program for a generically equivalent drug
product that is not included on the Medicaid preferred generic
drug list.
(f) The office shall request bids for the Medicaid preferred
generic drug list at least one (1) time every five (5) years.
(g) The office may adopt rules under IC 4-22-2 necessary to
implement this section.
