130th Ohio General Assembly
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S. B. No. 127As Introduced
As Introduced

124th General Assembly
Regular Session
2001-2002
S. B. No. 127


SENATORS Hagan, Ryan, Brady, DiDonato, Fingerhut, Furney, Herington, Mallory, McLin, Prentiss, Shoemaker



A BILL
To amend section 329.04 and to enact sections 5110.01, 5110.02, 5110.03, 5110.04, 5110.06, 5110.07, 5110.08, 5110.09, 5110.10, 5110.12, 5110.15, 5110.16, 5110.18, 5110.19, 5110.20, 5110.21, 5110.25, 5110.26, 5110.27, 5110.28, 5110.40, 5110.42, 5110.44, 5110.50, 5110.60, and 5110.62 of the Revised Code to create the Rx Program; to require the Director of Job and Family Services, on making a specified determination, to establish maximum retail prices for prescription drugs; to authorize the Director to act in the event of a severe shortage of prescription drugs; and to authorize a civil action for violation of certain prohibitions regarding pricing of prescription drugs.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1.  That section 329.04 be amended and sections 5110.01, 5110.02, 5110.03, 5110.04, 5110.06, 5110.07, 5110.08, 5110.09, 5110.10, 5110.12, 5110.15, 5110.16, 5110.18, 5110.19, 5110.20, 5110.21, 5110.25, 5110.26, 5110.27, 5110.28, 5110.40, 5110.42, 5110.44, 5110.50, 5110.60, and 5110.62 of the Revised Code be enacted to read as follows:
Sec. 329.04.  (A) The county department of job and family services shall have, exercise, and perform the following powers and duties:
(1) Perform any duties assigned by the state department of job and family services regarding the provision of public family services, including the provision of the following services to prevent or reduce economic or personal dependency and to strengthen family life:
(a) Services authorized by Title IV-A of the "Social Security Act," 49 110 Stat. 620 (1935) 2113 (1996), 42 U.S.C.A. 301, as amended, and known in this state as the Ohio works first program established by Chapter 5107. of the Revised Code and the prevention, retention, and contingency program established under Chapter 5108. of the Revised Code;
(b) Social services authorized by Title XX of the "Social Security Act" and provided for by section 5101.46 of the Revised Code;
(c) If the county department is designated as the child support enforcement agency, services authorized by Title IV-D of the "Social Security Act" and provided for by Chapter 3125. of the Revised Code. The county department may perform the services itself or contract with other government entities, and, pursuant to division (C) of section 2301.35 and section 2301.42 of the Revised Code, private entities, to perform the Title IV-D services.
(2) Administer disability assistance under Chapter 5115. of the Revised Code as required by the state department of job and family services;
(3) Administer burials insofar as the administration of burials was, prior to September 12, 1947, imposed upon the board of county commissioners and if otherwise required by state law;
(4) Cooperate with state and federal authorities in any matter relating to family services and to act as the agent of such authorities;
(5) Submit an annual account of its work and expenses to the board of county commissioners and to the state department of job and family services at the close of each fiscal year;
(6) Exercise any powers and duties relating to family services or workforce development activities imposed upon the county department of job and family services by law, by resolution of the board of county commissioners, or by order of the governor, when authorized by law, to meet emergencies during war or peace;
(7) Determine the eligibility for medical assistance of recipients of aid under Title XVI of the "Social Security Act";
(8) If assigned by the state director of job and family services under section 5101.515 of the Revised Code, determine applicants' eligibility for health assistance under the children's health insurance program part II;
(9) Enter into a plan of cooperation with the board of county commissioners under section 307.983, consult with the board in the development of the transportation work plan developed under section 307.985, establish with the board procedures under section 307.986 for providing services to children whose families relocate frequently, and comply with the contracts the board enters into under sections 307.981 and 307.982 of the Revised Code that affect the county department;
(10) For the purpose of complying with a partnership agreement the board of county commissioners enters into under section 307.98 of the Revised Code, exercise the powers and perform the duties the partnership agreement assigns to the county department;
(11) If the county department is designated as the workforce development agency, provide the workforce development activities specified in the contract required by section 330.05 of the Revised Code;
(12) Accept applications for the Rx program created by section 5110.02 of the Revised Code and make eligibility determinations for the program.
(B) The powers and duties of a county department of job and family services are, and shall be exercised and performed, under the control and direction of the board of county commissioners. The board may assign to the county department any power or duty of the board regarding family services and workforce development activities. If the new power or duty necessitates the state department of job and family services changing its federal cost allocation plan, the county department may not implement the power or duty unless the United States department of health and human services approves the changes.
Sec. 5110.01.  As used in this chapter:
(A) "Manufacturer of dangerous drugs," "terminal distributor of dangerous drugs," and "wholesale distributor of dangerous drugs" have the same meanings as in section 4729.01 of the Revised Code.
(B) "Medicaid" has the same meaning as in section 5111.01 of the Revised Code.
(C) "Prescription drug" means a dangerous drug as defined in division (F)(1) of section 4729.01 of the Revised Code.
(D) "Rx program participant" means an individual determined eligible for the Rx program and issued an Rx program enrollment card.
(E) "State health program" means a health program that is funded in whole or part with state funds or administered by a state agency.
Sec. 5110.02.  There is hereby established in the department of job and family services the Rx program. An Rx program participant shall receive an Rx program enrollment card to be presented to terminal distributors of dangerous drugs to receive discounts provided for under section 5110.15 of the Revised Code on prescription drugs covered by the program pursuant to section 5110.27 of the Revised Code.
Sec. 5110.03.  The director of job and family services may coordinate the Rx program with other programs administered by the director or, pursuant to an interagency agreement, directors of other state departments, to enhance efficiency, reduce the cost of prescription drugs, and maximize the benefits of the Rx program and other programs. Coordination may include making participants of other programs eligible for the Rx program.
Sec. 5110.04.  There is hereby created in the state treasury the Rx program fund. The fund shall consist of rebates made by manufacturers of dangerous drugs and wholesale distributors of dangerous drugs pursuant to rebate agreements entered into under section 5110.25 of the Revised Code and money the general assembly appropriates for the Rx program. The director of job and family services shall use money in the fund to reimburse a terminal distributor of dangerous drugs the amount of the discount the terminal distributor provides an Rx program participant on a prescription drug pursuant to section 5110.15 of the Revised Code and pay the terminal distributor a professional fee established by rules adopted under section 5110.06 of the Revised Code. The director shall also use money in the fund to pay the administrative costs of the Rx program, including administrative costs associated with contracted services, computers, and other reasonable administrative matters. Investment earnings of the fund shall be credited to the fund.
Sec. 5110.06.  The director of job and family services shall adopt rules in accordance with Chapter 119. of the Revised Code to implement the Rx program. The rules shall provide for all of the following:
(A) Simplified eligibility determination procedures for the Rx program;
(B) The manner in which a terminal distributor of dangerous drugs shall disclose to an Rx program participant the amount the program has saved the participant on the cost of a prescription drug covered by the Rx program that the participant purchases from the terminal distributor. The rules shall not require a terminal distributor of dangerous drugs to reveal any proprietary information.
(C) Claim forms to be used by a terminal distributor of dangerous drugs under section 5110.18 of the Revised Code;
(D) The amount of the professional fee to be paid to terminal distributors of dangerous drugs pursuant to section 5110.19 of the Revised Code. The professional fee shall be three dollars initially. The director shall review the professional-fee amount periodically to determine whether it should be increased.
(E) A schedule for manufacturers of dangerous drugs and wholesale distributors of dangerous drugs to pay rebates to the director pursuant to a rebate agreement entered into under section 5110.25 of the Revised Code;
(F) Notwithstanding this chapter, adjustments to the requirements and terms of the Rx program to accommodate any federally funded prescription drug programs created after the effective date of this section.
Sec. 5110.07.  The director of job and family services shall seek a waiver of federal law or regulation if necessary to implement the Rx program.
Sec. 5110.08.  The director of job and family services shall report enrollment in and the financial status of the Rx program to the speaker and minority leader of the house of representatives and the president and minority leader of the senate not later than the second week of each January.
Sec. 5110.09.  The director of job and family services shall undertake outreach efforts to publicize the Rx program and maximize enrollment in the program.
Sec. 5110.10.  An individual who meets all of the following requirements is eligible to participate in the Rx program.
(A) The individual is a resident of this state.
(B) Except as provided in section 5110.03 of the Revised Code, the individual is not eligible for a program under which federal, state, or county funds are used to pay part or all of the cost of the individual's prescription drugs.
(C) The individual does not have prescription drug coverage through a third-party payer, as defined in section 3901.38 of the Revised Code.
Sec. 5110.12.  An individual seeking to participate in the Rx program shall apply to the county department of job and family services of the county in which the individual resides.
Sec. 5110.15.  Each terminal distributor of dangerous drugs shall discount the amount it charges an Rx program participant for a prescription drug covered by the program. The amount of the discount shall be the amount of the rebate a manufacturer of dangerous drugs or wholesale distributor of dangerous drugs pays the director of job and family services for the prescription drug pursuant to a rebate agreement entered into under section 5110.25 of the Revised Code.
Sec. 5110.16.  In accordance with rules adopted under section 5110.06 of the Revised Code, a terminal distributor of dangerous drugs shall disclose to an Rx program participant the amount the program has saved the participant on the cost of a prescription drug covered by the program that the participant purchases from the terminal distributor.
Sec. 5110.18.  A terminal distributor of dangerous drugs that provides an Rx program participant a discount on a prescription drug pursuant to section 5110.15 of the Revised Code shall submit a claim to the director of job and family services verifying the amount the terminal distributor charged the participant for the prescription drug. The terminal distributor shall use a claim form prescribed in rules adopted under section 5110.06 of the Revised Code.
Sec. 5110.19.  Using claims submitted by a terminal distributor of dangerous drugs under section 5110.18 of the Revised Code, the director of job and family services shall reimburse a terminal distributor of dangerous drugs the amount of the discount the terminal distributor provides an Rx program participant on a prescription drug pursuant to section 5110.15 of the Revised Code and pay the terminal distributor the professional fee established by rules adopted under section 5110.06 of the Revised Code for each claim. The director shall make the reimbursements and payments on a weekly or biweekly basis.
Sec. 5110.20.  The director of job and family services shall not impose a transaction charge on a terminal distributor of dangerous drugs that submits a claim under section 5110.18 of the Revised Code.
Sec. 5110.21.  The director of job and family services shall not release any information included on a claim submitted to the director under section 5110.18 of the Revised Code that is subject to confidentiality protection under federal or state law.
Sec. 5110.25.  Each manufacturer of dangerous drugs and wholesale distributor of dangerous drugs that sells prescription drugs through a state health program shall enter into a rebate agreement with the director of job and family services under which the manufacturer or wholesale distributor is to make rebate payments to the director on a quarterly basis or in accordance with a schedule established by rules adopted under section 5110.06 of the Revised Code.
Sec. 5110.26.  The director of job and family services shall negotiate with each manufacturer of dangerous drugs and wholesale distributor of dangerous drugs that enters into a rebate agreement with the director under section 5110.25 of the Revised Code the amount of the rebate the manufacturer or wholesale distributor shall pay to the director under that section. In the process of negotiations, the director shall do both of the following:
(A) Take into consideration rebates provided for under 42 U.S.C.A. 1396r-8, the average wholesale price of prescription drugs, and any other information on prescription drug prices and price discounts available to the director;
(B) Use the director's best efforts to obtain a rebate amount that is at least as much as the amount of the rebate provided for under 42 U.S.C.A. 1396r-8 or not less than the amount the federal government receives as a discount, rebate, or price reduction for prescription drugs.
Sec. 5110.27.  The Rx program shall cover a prescription drug if the prescription drug is included in a rebate agreement entered into under section 5110.25 of the Revised Code.
Sec. 5110.28.  The director of job and family services shall maintain a list of manufacturers of dangerous drugs and wholesale distributors of dangerous drugs that do not enter into a rebate agreement with the director under section 5110.25 of the Revised Code. The director shall make the list available to the public.
Sec. 5110.40.  Not later than April 1, 2005, the director of job and family services shall do all of the following:
(A) Review medicaid recipients' use of prescription drugs and create a list of the one hundred prescription drugs most used by medicaid recipients and the one hundred prescription drugs for which the total cost was the highest. To make this determination, the director shall use data from the most recent six-month period for which such data is available.
(B) Determine the average amount terminal distributors of dangerous drugs charged Rx program participants for each prescription drug included on the list created under division (A) of this section on a date selected by the director;
(C) Determine the average amount terminal distributors of dangerous drugs charged persons other than Rx program participants for each prescription drug included on the list created under division (A) of this section on the date selected by the director under division (B) of this section.
Sec. 5110.42.  If the director of job and family services determines under section 5110.40 of the Revised Code that the average amount terminal distributors of dangerous drugs charged Rx program participants for one or more prescription drugs included on the list the director created under division (A) of that section is not reasonably comparable to the average amount terminal distributors charged persons other than Rx program participants for the same prescription drug, the director shall adopt rules in accordance with Chapter 119. of the Revised Code establishing maximum amounts terminal distributors of dangerous drugs may charge in this state for any or all prescription drugs. If required to adopt the rules, the director shall adopt the rules not later than October 1, 2005. The rules shall permit a terminal distributor of dangerous drugs to appeal the maximum price a rule establishes for a prescription drug in accordance with Chapter 119. of the Revised Code.
Sec. 5110.44.  (A) No terminal distributor of dangerous drugs shall charge more for a prescription drug than permitted by rules adopted under section 5110.42 of the Revised Code.
(B) A terminal distributor of dangerous drugs that violates division (A) of this section commits an unfair or deceptive act or practice in violation of section 1345.02 of the Revised Code.
Sec. 5110.50.  If the director of job and family services determines that there is a severe shortage of prescription drugs in this state that could threaten the public health or welfare, the director may take actions the director determines necessary.
Sec. 5110.60.  (A) No manufacturer of dangerous drugs, wholesale distributor of dangerous drugs, or terminal distributor of dangerous drugs shall do any of the following:
(1) Demand an unconscionable price for a prescription drug;
(2) Demand prices or terms for a prescription drug that leads to an unjust or unreasonable profit;
(3) Discriminate unreasonably against any person in the sale, exchange, distribution, or handling of a prescription drug dispensed or delivered in this state.
(B) A manufacturer of dangerous drugs, wholesale distributor of dangerous drugs, or terminal distributor of dangerous drugs that violates this section is liable in a civil action for all of the following:
(1) An amount equal to three times the amount of the injury caused by the violation;
(2) An amount not to exceed one hundred thousand dollars;
(3) The cost of bringing and prosecuting the action, including necessary and reasonable investigative costs, reasonable expert fees, and reasonable attorney's fees;
(4) In the case of a willful violation or a determination that the manufacturer of dangerous drugs, wholesale distributor of dangerous drugs, or terminal distributor of dangerous drugs previously has been found liable under this section, punitive damages.
Sec. 5110.62.  On behalf of a person, group of persons, state agency, or political subdivision injured by a violation of section 5110.60 of the Revised Code, the attorney general may bring a civil action against the manufacturer of dangerous drugs, wholesale distributor of dangerous drugs, or terminal distributor of dangerous drugs whose violation of that section caused the injury. There is a right to a jury trial in a civil action brought under this section. In addition to the awards provided by division (B) of section 5110.60 of the Revised Code, the attorney general may obtain injunctive relief. If punitive damages are awarded, the attorney general shall equitably distribute the damages to all injured parties, less reasonable costs to the attorney general for distributing the damages.
Section 2.  That existing section 329.04 of the Revised Code is hereby repealed.
Section 3.  Sections 1 and 2 of this act shall take effect January 1, 2002.
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