Citations Affected: IC 12-7-2-91.7; 7IC 12-15-35.
Synopsis: Medicaid generic drug reimbursement program. Requires
the drug utilization review board (board) to develop, implement, and
maintain a generically equivalent drug product Medicaid
reimbursement program (program). Requires the manufacturer of a
generically equivalent drug product to submit the cost that it would
offer to a Medicaid provider for its drug in order to participate in the
Medicaid program, and specifies that the cost may not exceed the
maximum allowable rate determined by the office of Medicaid policy
and planning. Requires the board to review the submissions and
determine a Medicaid reimbursement rate for the therapeutic drug
classification. Requires the office of Medicaid policy and planning to
reimburse Medicaid providers at the rate determined by the board for
the therapeutic drug classification. Establishes a time line for the
implementation of the program for certain therapeutic drug
classifications.
Effective: July 1, 2011.
January 13, 2011, read first time and referred to Committee on Health and Provider
Services.
A BILL FOR AN ACT to amend the Indiana Code concerning
Medicaid.
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.
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.
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) For therapeutic drug classifications with at least two (2)
manufactured generically equivalent drug products, establish
a generically equivalent drug product Medicaid
reimbursement program, in consultation with the
therapeutics committee, that requires a manufacturer of a
generically equivalent drug product to submit pricing of the
generically equivalent drug product to the board for review
in the manner specified in section 50.5 of this chapter in order
to participate in the Medicaid program.
(b) The board shall use the clinical expertise of the therapeutics
committee in developing a preferred drug list and a generically
equivalent drug product Medicaid reimbursement program. 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:
purposes of IC 5-14-3-4(a)(1).
product for the therapeutic drug classification.
(e) At least annually, and at any other time determined by the
board, the office or the board may require a generically equivalent
drug product manufacturer to submit the costs of a generically
equivalent drug product under subsection (b).
(f) The office shall reimburse a provider under the Medicaid
program for a generically equivalent drug product at the rate
determined by the drug utilization review board for the
therapeutic classification under this section.
(g) In the implementation of the generically equivalent drug
product Medicaid reimbursement program, the board shall
determine the rates of a therapeutic classification in the following
manner:
(1) For the five (5) therapeutic classifications that have:
(A) at least two (2) manufactured generically equivalent
drug products; and
(B) the most expensive generic equivalent drug products;
the board shall submit the rate determined by the board
under this section to the office not later than January 1, 2012.
(2) For the next five (5) therapeutic classifications that:
(A) have at least two (2) generically equivalent drug
products; and
(B) are prescribed the most frequently in the Medicaid
program;
the board shall submit the rate determined under this section
to the office not later than May 1, 2012.
(3) For the remaining therapeutic classifications that have at
least two (2) manufactured generically equivalent drug
products, the board shall submit the rate determined under
this section to the office not later than September 1, 2012.
(h) The office may adopt rules under IC 4-22-2 necessary to
implement this section.