CHAPTER 259

FORMERLY

SENATE SUBSTITUTE NO. 1

FOR

SENATE BILL NO. 6

AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE RELATING TO PRESCRIPTION DRUG PAYMENT ASSISTANCE FOR LOW-INCOME RESIDENTS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

Section 1. Amend Title 16, Delaware Code by adding thereto a new chapter to read as follows:

"Chapter 30. Prescription Drug Payment Assistance Program

§3001. Short title.

This act shall be known and may be cited as the 'Delaware Prescription Drug Payment Assistance Program'.

§3002. Purpose.

The purpose of this chapter is to provide payment assistance for prescription drugs to Delaware's low-income senior and disabled citizens who are ineligible for, or do not have, prescription drug benefits or coverage through federal, state, or private sources.

§3003. Definitions.

a. 'Department' shall mean the Department of Health and Social Services.

b. 'Eligible Person' shall mean a person eligible for the Delaware Prescription Drug Payment Assistance Program pursuant to §3004 of this Chapter.

c. 'Prescription drugs' shall mean drugs and supplies that have been approved as safe and effective by the Federal Food and Drug Administration or are otherwise legally marketed in the United States, including items related to diabetes management, if not covered by Medicare, that a physician has deemed medically necessary for the diagnosis and/or treatment of the patient. For the purposes of this Chapter, prescription drugs may include cost effective over-the-counter pharmaceutical products if prescribed by a health care provider authorized to prescribe prescription drugs as an alternative to more costly drugs. Prescription drugs covered under this Chapter shall be limited and subject to the provisions of §3005 and the rules and regulation adopted pursuant thereto.

d. The 'Program' shall mean the Prescription Drug Payment Assistance Program.

e. 'Secretary' shall mean the Secretary of the Department of Health and Social Services.

§3004. Eligibility.

To be eligible for payment assistance for prescription drugs a person must:

(1) be a U.S. citizen or a lawfully admitted alien;

(2) have income that is less than 200% of the Federal Poverty Level (FPL) or have prescription drug expenses that exceed 40% of his or her annual income;

(3) be a resident of the State of Delaware;

(4) be ineligible for Medicaid prescription benefits;

(5) be ineligible for Nemours Health Clinic Pharmaceutical benefit as defined on 1/1/99;

(6) be ineligible for and/or not receiving a prescription drug benefit through a Medicare supplemental policy or any other third party payer prescription benefit; and

(7) be an individual aged 65 or over or be an individual between the ages 19 and 64 who is otherwise eligible for benefits under Title II of the Social Security Act (Federal Old Age, Survivors, and Disability Insurance Benefits).

§3005. Program administration.

(a) The Delaware Prescription Drug Payment Assistance Program shall be administered by the Department. The Department shall promulgate and adopt rules and regulations as are necessary to implement the Program in a cost-effective manner and to ensure the Program is the payer of last resort for prescription drugs. Rules and regulations shall include the following:

(1) Payment assistance shall not exceed $2,500 per State fiscal year to assist each eligible person in the purchase of prescription drugs.

(2) The Department shall restrict covered prescription drugs covered under the Program to those manufactured by pharmaceutical companies that agree to provide manufacturer rebates. The Department shall establish a State rebate program to collect rebates from pharmaceutical manufacturers in an amount consistent with the Medicaid rebate of 15.1% of Average Manufacturer (AMP) for innovator/brand name products and 11% of Average Manufacturer Price (AMP) for non-innovator/generic products.

(3) The Department shall develop a co-payment requirement which shall not exceed 25% of the acquisition cost but shall be no lower than $5.00. Co-payment amounts may vary when a generic drug is purchased be eligible persons in the Program. The co-pay may be waived in cases of severe hardship.

(4) The Secretary or the Secretary's designee shall provide a clear, written explanation defining the scope of the Program's coverage, the amount of the cost-sharing requirements and any limitations on access to covered prescription drugs. The Department shall provide notice, when 75% of the cap has been expended. The Department will also notify persons of the process to appeal a decision denying reimbursement for prescription drugs or denying a person's eligibility for the Program. Services shall begin on the 1st day of the month, following the month that eligibility is determined. Eligible individuals will receive an identification card for the Program.

(5) No drug prescription may exceed 100 dosing units or a 34-day supply, whichever is greater.

(6) No system of administration shall make a direct cash payment to any eligible person.

(7) The Department shall require a mandatory point-of-sale claims submission within 14 days unless extenuating circumstances, as defined by the Department, exist.

(b) The Department may promulgate and adopt rules and regulations consistent with the following:

(1) Limiting application to the Program to a specific open-enrollment period, with coverage effective as of the date the application is approved.

(2) Imposing an annual enrollment fee in an amount not to exceed $20.00 to be paid by all eligible persons in the Program to defray administrative expenses. Payment of any such fee shall be credited to a special fund to be designated as the Prescription Assistance Fund. For each fiscal year, the maximum unencumbered balance which shall remain in the Prescription Assistance Fund at the end of any fiscal year shall be no more than the administrative cost of the program in the subsequent fiscal year.

(3) Determining income eligibility of a person by any reasonable means, including, but not limited to a review of the person's most recent federal and state income tax returns and copies of income checks. Residency and age/disability eligibility may be verified by submission of such documents as the Secretary or the Secretary's designee deems reasonable.

(4) Rules and Regulations the Secretary deemed necessary to implement the Program consistent with the purposes outlined herein and appropriations provided to implement this Program.

§3006. Semi-Annual Report.

The Department shall maintain data to evaluate the cost and effectiveness of the Program and shall produce a semi-annual report summarizing participant demographics, utilization, utilization review results, and such other available information as may be needed to evaluate the costs and benefits of the Program.

§3007. Pharmacist duty.

A pharmacist shall not dispense or provide a covered prescription drug to an eligible person until the eligible person makes the required co-payment."

Section 2.The provisions of this Act shall be subject to appropriations. It is the intent of the General Assembly that some of the funds received by the State pursuant to the National Tobacco Settlement, known as the Master Settlement Agreement, may be utilized to help fund this Act. The General Assembly may also appropriate such other funds as may be required as it deems appropriate. Nothing in this legislation precludes application of federal dollars for purposes contained in this bill should such funds become available.

Section 3. The Department of Health and Social Services may use existing suppliers to implement this Act until July 1, 2002.

Section 4. Manufacturer rebates shall be used for overhead and administrative costs for the implementation of this Act. Any excess manufacturer rebates shall be used for program costs.

Section 5. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to that end the provisions of this Act are declared to be severable.

Section 6. This Act shall become effective on or before January 1, 2000.

Approved August 31,1999