SB 50

Elimination of cost sharing for prescription drugs under the Medical Assistance program

Under current law, certain persons who receive health services under the Medical Assistance program, also known in this state as BadgerCare, are required to contribute a cost-sharing payment to the cost of certain health services. This bill eliminates all cost-sharing payments for prescription drugs under the Medical Assistance program. The Medical Assistance program is a joint state and federal program that provides health services to individuals who have limited financial resources.

Cost-sharing cap on insulin

The bill prohibits every health insurance policy and governmental self-insured health plan that covers insulin and imposes cost sharing on prescription drugs from imposing cost sharing on insulin in an amount that exceeds $35 for a one-month supply. Current law requires every health insurance policy that provides coverage of expenses incurred for treatment of diabetes to provide coverage for specified expenses and items, including insulin. The required coverage under current law for certain diabetes treatments other than insulin infusion pumps is subject to the same exclusions, limitations, deductibles, and coinsurance provisions of the policy as other covered expenses. The bill’s cost-sharing limitation on insulin supersedes the specification that the exclusions, limitations, deductibles, and coinsurance are the same as for other coverage.

Fiduciary and disclosure requirements for pharmacy benefit managers

The bill imposes fiduciary and disclosure requirements on pharmacy benefit managers. Pharmacy benefit managers contract with health plans that provide prescription drug benefits to administer those benefits for the plans. They also have contracts with pharmacies and pay the pharmacies for providing drugs to the plan beneficiaries.

The bill provides that a pharmacy benefit manager owes a fiduciary duty to a health plan sponsor. The bill also requires that a pharmacy benefit manager annually disclose all of the following information to the plan sponsor:

1. The indirect profit received by the pharmacy benefit manager from owning a pharmacy or service provider.

2. Any payments made to a consultant or broker who works on behalf of the plan sponsor.

3. From the amounts received from drug manufacturers, the amounts retained by the pharmacy benefit manager that are related to the plan sponsor’s claims or bona fide service fees.

4. The amounts received from network pharmacies and the amount retained by the pharmacy benefit manager.

Reimbursements for certain 340B program entities

The bill prohibits any person from reimbursing certain entities that participate in the federal drug pricing program, known as the 340B program, for a drug subject to an agreement under the program at a rate lower than that paid for the same drug to pharmacies that have a similar prescription volume. The bill also prohibits a person from imposing any fee, charge back, or other adjustment on the basis of the entity’s participation in the 340B program. The entities covered by the prohibitions under the bill are federally qualified health centers, critical access hospitals, and grantees under the federal Ryan White HIV/AIDS program, as well as these entities’ pharmacies and any pharmacy with which any of the entities have contracted to dispense drugs through the 340B program.

Drug repository program

Under current law, the Department of Health Services must maintain a drug repository program under which any person may donate certain drugs or supplies to be dispensed to and used by eligible individuals, prioritizing uninsured and indigent individuals. The bill allows DHS to partner with out-of-state drug repository programs. The bill also allows out-of-state persons to donate to the drug repository program in Wisconsin and persons in Wisconsin to donate to participating drug repository programs in other states. Further, the bill directs DHS to study and implement a centralized, physical drug repository program.

Value-based diabetes medication pilot project

The bill directs the Office of the Commissioner of Insurance to develop a pilot project under which a pharmacy benefit manager and pharmaceutical manufacturer are directed to create a value-based, sole-source arrangement to reduce the costs of prescription diabetes medication. The bill allows OCI to promulgate rules to implement the pilot project.

Pharmacist continuing education credits for volunteering at free and charitable clinics

Under current law, a licensed pharmacist must renew his or her license every two years. An applicant for renewal of a pharmacist license must submit proof that he or she has completed 30 hours of continuing education within the two-year period immediately preceding the date of his or her application. The bill allows pharmacists to meet up to 10 hours of the continuing education requirement for each two-year period by volunteering at a free and charitable clinic approved by the Pharmacy Examining Board.

Prescription drug importation program

The bill requires the commissioner of insurance, in consultation with persons interested in the sale and pricing of prescription drugs and federal officials and agencies, to design and implement a prescription drug importation program for the benefit of and that generates savings for Wisconsin residents. The bill establishes requirements for the program, including all of the following:

1. The commissioner must designate a state agency to become a licensed wholesale distributor or contract with a licensed wholesale distributor and to seek federal certification and approval to import prescription drugs.

2. The program must comply with certain federal regulations and import from Canadian suppliers only prescription drugs that are not brand-name drugs, have fewer than four competitor drugs in this country, and for which importation creates substantial savings.

3. The commissioner must ensure that prescription drugs imported under the program are not distributed, dispensed, or sold outside of Wisconsin.

4. The program must have an audit procedure to ensure the program complies with certain requirements specified in the bill.

Before submitting the proposed program to the federal government for certification, the commissioner must submit the proposed program to the Joint Committee on Finance for its approval.

Pharmacy benefits tool grants

The bill directs OCI to award grants in an amount of up to $500,000 in each fiscal year to health care providers to develop and implement a patient pharmacy benefits tool that would allow prescribers to disclose the cost of prescription drugs for patients. The tool must be usable by physicians and other prescribers to determine the cost of prescription drugs for their patients. Any health care provider that receives a grant to develop and implement a patient pharmacy benefits tool is required to contribute matching funds equal to at least 50 percent of the total grant awarded.

Prescription drug purchasing entity study

The bill requires OCI to conduct a study on the viability of creating or implementing a state prescription drug purchasing entity.

Licensure of pharmacy services administrative organizations

The bill requires that a pharmacy services administrative organization (PSAO) be licensed by OCI. Under the bill, a PSAO is an entity operating in Wisconsin that does all of the following:

1. Contracts with an independent pharmacy to conduct business on the pharmacy’s behalf with a third-party payer.

2. Provides at least one administrative service to an independent pharmacy and negotiates and enters into a contract with a third-party payer or pharmacy benefit manager on the pharmacy’s behalf.

The bill defines “independent pharmacy” to mean a licensed pharmacy operating in Wisconsin that is under common ownership with no more than two other pharmacies. “Administrative service” is defined to mean assisting with claims or audits, providing centralized payment, performing certification in a specialized care program, providing compliance support, setting flat fees for generic drugs, assisting with store layout, managing inventory, providing marketing support, providing management and analysis of payment and drug dispensing data, or providing resources for retail cash cards. The bill defines “third-party payer” to mean an entity operating in Wisconsin that pays or insures health, medical, or prescription drug expenses on behalf of beneficiaries. The bill uses the current law definition of “pharmacy benefit manager,” which is an entity doing business in Wisconsin that contracts to administer or manage prescription drug benefits on behalf of an insurer or other entity that provides prescription drug benefits to Wisconsin residents.

To obtain the license required by the bill, a person must apply to OCI and provide the contact information for the applicant and a contact person, evidence of financial responsibility of at least $1,000,000, and any other information required by the commissioner by rule. Under the bill, the license fee is set by the commissioner, and the term of a license is two years.

The bill also requires that a PSAO disclose to OCI the extent of any ownership or control by an entity that provides pharmacy services; provides prescription drug or device services; or manufactures, sells, or distributes prescription drugs, biologicals, or medical devices. The PSAO must notify OCI within five days of any material change in its ownership or control related to such an entity.

Licensure of pharmaceutical representatives

The bill requires a pharmaceutical representative to be licensed by OCI and to display the pharmaceutical representative’s license during each visit with a health care professional. The bill defines “pharmaceutical representative” to mean an individual who markets or promotes pharmaceuticals to health care professionals on behalf of a pharmaceutical manufacturer for compensation.

The term of a license issued under the bill is one year, and the license is renewable. The application to obtain or renew a license must include the applicant’s contact information, a description of the type of work in which the applicant will engage, the license fee, an attestation that professional education requirements are met, proof that any penalties and other fees are paid, and any other information required by OCI by rule. Under the bill, the license fee is set by the commissioner. The bill requires the pharmaceutical representative to report, within four business days, any change to the information provided on the application or any material change to the pharmaceutical representative’s business operations or other information required to be reported under the bill.