Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 163 Second Substitute (2018GS)

Sponsor

Rep. Thurston, N.  (Thurston’s own bill)

Final action

House/ filed 3/8/2018

Outcome

Failed / filed without passage

Summary

What it does

• This bill:
• defines terms;
• requires the Department of Health to:
• design a prescription drug importation program;
• apply for approval of the prescription drug importation program;
• if the program is approved, implement the provisions of the program; and
• if approval is denied, study how the state can obtain approval for the program;
• describes the requirements of the prescription drug importation program; and
• modifies the Pharmacy Practice Act and the Utah Antitrust Act to make certain anticompetitive activities illegal.

Every vote on this bill

Bill text

PRESCRIPTION DRUG IMPORTATION PROGRAM
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Norman K. Thurston
Senate Sponsor: 
 Deidre M. Henderson
LONG TITLE
General Description:
This bill requires the Department of Health to design a wholesale Canadian prescription
drug importation program, apply for approval of the program by the Secretary of the
United States Department of Health and Human Services, and, if the prescription drug
importation program is approved, to implement the provisions of the program.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ requires the Department of Health to:
• design a prescription drug importation program;
• apply for approval of the prescription drug importation program;
• if the program is approved, implement the provisions of the program; and
• if approval is denied, study how the state can obtain approval for the program;
▸ describes the requirements of the prescription drug importation program; and
▸ modifies the Pharmacy Practice Act and the Utah Antitrust Act to make certain
anticompetitive activities illegal.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
76-10-3104
, as renumbered and amended by Laws of Utah 2013, Chapter 187
ENACTS:
26-62-101
, Utah Code Annotated 1953
26-62-102
, Utah Code Annotated 1953
26-62-201
, Utah Code Annotated 1953
26-62-202
, Utah Code Annotated 1953
26-62-301
, Utah Code Annotated 1953
26-62-302
, Utah Code Annotated 1953
26-62-303
, Utah Code Annotated 1953
26-62-304
, Utah Code Annotated 1953
26-62-305
, Utah Code Annotated 1953
58-17b-626
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
26-62-101
 is enacted to read:
CHAPTER 62. CANADIAN PRESCRIPTION DRUG IMPORTATION ACT
Part 1. General Provisions.
 26-62-101.
Title.
This chapter is known as the "Canadian Prescription Drug Importation Act."
Section 2. Section 
26-62-102
 is enacted to read:
 26-62-102.
Definitions.
As used in this chapter:
 (1) "Health insurer" means:
 (a) an insurer who offers health care insurance as that term is defined in Section
31A-1-301
;
 (b) for health benefits offered to state employees under Section 
49-20-202
, the Public
Employees' Benefit and Insurance Program created in Section 
49-20-103
; or
 (c) a workers' compensation insurer:
 (i) authorized to provide workers' compensation insurance in the state; or
 (ii) that is a self-insured employer as defined in Section 
34A-2-201.5
.
 (2) "Prescription drug importation program" means the Canadian Prescription Drug
Importation Program established under Section 
26-62-301
.
 (3) "Secretary" means the secretary of the United States Department of Health and
Human Services.
Section 3. Section 
26-62-201
 is enacted to read:
Part 2. Application and Certification.
 26-62-201.
Application for approval of prescription drug importation program
and certification of Canadian drug importation.
(1) The department shall submit to the secretary:
 (a) no later than July 31, 2018, a letter of intent to seek approval for a program to allow
for the importation of prescription drugs from Canada into the state under the provisions of 21
U.S.C. Sec. 384(l); and
 (b) no later than December 31, 2018, an application for:
 (i) the approval of a program to allow for the importation of prescription drugs from
Canada into the state under the provisions of 21 U.S.C. Sec. 384(l); and
 (ii) certification by the secretary to the United States Congress, in accordance with 21
U.S.C. Sec. 384(l), that importation of Canadian prescription drugs will:
 (A) pose no additional risk to the public's health and safety; and
 (B) result in a significant reduction in the cost of covered products to the American
consumer.
 (2) The application described in Subsection (1)(b) shall contain:
 (a) the findings of the prescription drug importation study described in Section
26-62-202
;
 (b) a description of the prescription drug importation program designed by the
department in accordance with the provisions of this chapter, including measures that will be
taken to:
 (i) comply with existing state and federal law; and
 (ii) reduce the risk to the public's health and safety; and
 (c) an estimate of the reduction in the cost of covered products and health insurance
premiums to Utah consumers.
 (3) If the application for the prescription drug importation program is not approved by
the secretary, the department shall submit a new application in accordance with the
requirements in Subsection (2) on or before December 1 of each year until the earlier of:
 (a) approval of the prescription drug importation program by the secretary; or
 (b) January 1, 2023.
 (4) On or before December 1 of each year that the department submits an application
under Subsection (2) or (3), the department shall submit a written report to the Health and
Human Services Interim Committee regarding the results of the application and any updated
findings and recommendations.
Section 4. Section 
26-62-202
 is enacted to read:
 26-62-202.
Prescription drug importation study.
(1) As funding is available, the department shall study how to gain approval by the
secretary for the state to import certain prescription drugs from Canada for eventual use by
Utah consumers.
 (2) The study described in Subsection (1) shall include:
 (a) a plan for operating the prescription drug importation program;
 (b) a plan to ensure that prescription drugs imported into the state under the
prescription drug importation program meet applicable United States federal and state
standards for safety and effectiveness;
 (c) examples of prescription drugs with the highest potential for consumer savings
through importation at the time of the study;
 (d) an estimate of the total potential consumer savings attributable to importation of
prescription drugs;
 (e) potential wholesalers with whom the state could contract to distribute imported
prescription drugs;
 (f) proposed amendments to state law to facilitate importation by the state; and
 (g) in coordination with the Office of the Attorney General, proposed amendments to
state law to inhibit pharmaceutical manufacturers from manipulating the pharmaceutical
market in the state or adversely affecting consumer access to pharmaceuticals under the
prescription drug importation program.
 (3) The department shall consult with the Utah State Board of Pharmacy,
representatives of the pharmaceutical industry, patient advocates, and others representing
persons who could be affected by the prescription drug importation program in conducting the
study in this section.
 (4) No later than November 1, 2018, the department shall submit a written report to the
Health and Human Services Interim Committee on the findings and recommendations of the
study described in this section.
Section 5. Section 
26-62-301
 is enacted to read:
Part 3. Prescription Drug Importation Program.
 26-62-301.
Canadian Prescription Drug Importation Program.
The department shall establish a Canadian Prescription Drug Importation Program in
accordance with the provisions in this chapter.
Section 6. Section 
26-62-302
 is enacted to read:
 26-62-302.
Program requirements.
The prescription drug importation program established under Section 
26-62-301
 shall:
 (1) only allow for the importation of prescription drugs that have been identified by the
department in the pharmaceutical importation list described in Section 
26-62-303
;
 (2) monitor consumer prices to ensure that market competition and routine health plan
administration provide significant savings for Utah consumers;
 (3) specify the actions that the department, the Insurance Department, and the
Department of Commerce will take if market competition and routine health plan
administration does not result in significant savings for Utah consumers;
 (4) only use Canadian suppliers regulated under relevant Canadian federal or provincial
laws;
 (5) if required by the secretary, establish a process to ensure the purity, chemical
composition, and potency of imported products;
 (6) ensure that imported prescription drugs will not be distributed, dispensed, or sold
outside of the state;
 (7) ensure that a participating health insurer keeps formularies and claims payment
systems up to date with the prescription drugs provided through the prescription drug
importation program;
 (8) ensure that a participating health insurer bases patient cost sharing on a reasonable
commercial price for imported prescription drugs;
 (9) require that a participating health insurer demonstrate to the Insurance Department
how savings on imported prescription drugs are reflected in premiums;
 (10) ensure that the program does not import a generic prescription drug that would
violate United States patent laws;
 (11) comply with the track and trace requirements in Title II of the Drug Security and
Quality Act, 4 U.S.C. Sec. 360eee, et seq., before imported prescription drugs come into
possession of the wholesaler;
 (12) ensure that the supply and distribution chain is in compliance with applicable
United States federal and state law after imported prescription drugs are in the possession of
the wholesaler;
 (13) ensure that the prescription drug importation program is adequately financed
through an efficient approach that does not jeopardize significant consumer savings;
 (14) require publication of the wholesalers' acquisition cost of each imported
prescription drug;
 (15) for an imported prescription drug, require a participating pharmacy to disclose
upon request the price of the drug that the participating pharmacy will charge to a patient who
is not covered by a health plan or contract; and
 (16) include an audit function described in Section 
26-62-304
.
Section 7. Section 
26-62-303
 is enacted to read:
 26-62-303.
Pharmaceutical importation list.
(1) (a) The department shall coordinate with the Utah State Board of Pharmacy to
develop and periodically revise a pharmaceutical importation list in accordance with this
section.
 (b) The department may coordinate with a working group created under the direction of
the Utah State Board of Pharmacy to satisfy the requirement in Subsection (1)(a).
 (2) The pharmaceutical importation list described in Subsection (1)(a):
 (a) shall include prescription drugs that:
 (i) may be imported from Canada under applicable United States federal and state law;
and
 (ii) are expected to generate substantial savings for Utah consumers; and
 (b) may not include a prescription drug that is:
 (i) a controlled substance, as that term is defined in 21 U.S.C. Sec. 802;
 (ii) a biological product, as that term is defined in 42 U.S.C. Sec. 262;
 (iii) an infused drug, including a peritoneal dialysis solution;
 (iv) an intravenously injected drug;
 (v) a drug that is inhaled during surgery; or
 (vi) a drug that may not be imported under applicable United States federal and state
law.
 (3) A health insurer shall provide the department and the Utah State Board of
Pharmacy or the designees of the Utah State Board of Pharmacy with any information
requested by the department regarding:
 (a) the cost of a prescription drug to the health insurer, including the amount of any
discount or rebate;
 (b) the quantity of a prescription drug that is dispensed to covered individuals,
regardless of whether the health insurer pays for the prescription drug; and
 (c) the amount of any co-pay or other charge that a health insurer imposes on a covered
individual for the prescription drug.
 (4) The information described in Subsection (3):
 (a) shall only be used for the purpose of developing the pharmaceutical importation list
or enforcing provisions of this chapter;
 (b) is proprietary information that the department, the Utah State Board of Pharmacy,
or a designee of the Utah State Board of Pharmacy may not disclose to any person;
 (c) is a private record for the purpose of Title 63G, Chapter 2, Government Records
Access and Management Act; and
 (d) may not contain personally identifiable personal health care information that is
protected by the Health Insurance Portability and Accountability Act as defined in Section
31A-1-301
.
 (5) The department shall:
 (a) review the pharmaceutical importation list every three months to ensure that the
pharmaceutical importation list continues to meet the requirements in Subsection (2); and
 (b) establish policies and procedures by rule made in accordance with Title 63G,
Chapter 3, Utah Administrative Rulemaking Act, for updating the pharmaceutical importation
list in accordance with Subsection (5)(a).
Section 8. Section 
26-62-304
 is enacted to read:
 26-62-304.
Audits.
(1) The prescription drug importation program established under Section 
26-62-301
shall include regular audits of suppliers, importers, wholesalers, retail pharmacies, health
insurers, and other persons who participate in the prescription drug importation program.
 (2) The audit function in Subsection (1) shall:
 (a) include a review of the:
 (i) methodology used to determine the prescription drugs with the greatest potential for
savings;
 (ii) process used to ensure that Canadian suppliers are of high quality, high
performance, and in full compliance with Canadian laws;
 (iii) methods used to ensure that imported prescription drugs under the prescription
drug importation program are not shipped, sold, or dispensed outside the state once in the
possession of the wholesaler or the wholesaler's contractors; and
 (iv) processes used to ensure that imported prescription drugs are pure, unadulterated,
potent, and safe; and
 (b) ensure that Utah consumers benefit from significant savings by verifying that:
 (i) participating pharmacies and administering providers are not charging rates that
jeopardize significant consumer savings to any consumer or participating health plan;
 (ii) a participating health insurer's formularies and claims processing systems remain
up to date with all relevant aspects of the prescription drug importation program;
 (iii) a participating health insurer bases patient coinsurance and other cost sharing on a
commercially reasonable rate for covered, imported prescription drugs that does not jeopardize
significant consumer savings;
 (iv) a participating health insurer reimburses participating pharmacies and
administering providers no more than a commercially reasonable rate for imported, dispensed
prescription drugs;
 (v) the prescription drug importation program is adequately financed to support all
administrative functions while generating significant consumer savings;
 (vi) the prescription drug importation program does not put consumers at a higher
health and safety risk than if the program did not exist;
 (vii) the prescription drug importation program continues to provide Utah consumers
with substantial savings on imported prescription drugs; and
 (viii) a participating pharmacy's ability to negotiate professional fees is not impeded.
 (2) The department shall coordinate with the Insurance Department and the
Department of Commerce to conduct audits in accordance with this section and to enforce the
provisions of this chapter.
Section 9. Section 
26-62-305
 is enacted to read:
 26-62-305.
Implementation.
(1) The department is responsible for implementing the provisions of the prescription
drug importation program upon:
(a) certification by the secretary to the United States Congress, in accordance with 21
U.S.C. Sec. 384(l), that importation of Canadian prescription drugs will:
(i) pose no additional risk to the public's health and safety; and
(ii) result in a significant reduction in the cost of covered products to the American
consumer;
(b) approval by the secretary of the prescription drug importation program; and
(c) satisfying any other requirements of state and federal law for the importation of
prescription drugs from Canada.
(2) The department shall implement the prescription drug importation program by
contracting with any wholesale pharmacy that:
(a) is licensed to operate in the state as a class C pharmacy under Section 
58-17b-302
;
(b) complies with the program requirements described in Section 
26-62-302
; and
(c) agrees to any additional conditions of participation that may be established by the
department in accordance with the requirements of federal law and this chapter.
(3) (a) The department may establish fees, in accordance with Section 
63J-1-504
, on an
entity that participates in the prescription drug importation program for the importation of
prescription drugs.
(b) The fees in Subsection (3)(a) may not exceed the amount necessary to cover the
cost the department incurs to implement this chapter.
(c) The department shall deposit in the General Fund the fees described in Subsection
(3)(a) as a dedicated credit to be used solely to pay for the cost of implementing this chapter.
(4) Before the conditions described in Subsection (1) are satisfied, the department:
(a) may, to the extent allowed under United State federal and state law:
(i) design the prescription drug importation program; and
(ii) negotiate with wholesalers in Canada and the United States regarding the potential
implementation of the prescription drug importation program; and
(b) may not:
(i) allow the importation of any prescription drugs under this chapter; or
(ii) implement any provisions of the prescription drug importation program that would
violate United States federal or state law.
Section 10. Section 
58-17b-626
 is enacted to read:
 58-17b-626.
Pharmaceutical manufacturer -- Prohibited conduct -- Penalties.
(1) A pharmaceutical manufacturer may not:
 (a) take any action, by agreement, unilaterally, or otherwise, that has the effect of
fixing or otherwise controlling the price that a pharmaceutical supplier, distributor, or dispenser
charges or advertises for pharmaceuticals in the drug importation program; or
 (b) discriminate against a pharmaceutical supplier, distributor, or dispenser based on
whether the supplier, distributor, or dispenser participates in the prescription drug importation
program established under Section 
26-62-301
.
 (2) The attorney general may bring a civil action or seek an injunction against any
person who violates a provision of this section.
Section 11. Section 
76-10-3104
 is amended to read:
76-10-3104.
Illegal anticompetitive activities.
(1) Every contract, combination in the form of trust or otherwise, or conspiracy in
restraint of trade or commerce is declared to be illegal.
(2) It shall be unlawful for any person to monopolize, or attempt to monopolize, or
combine or conspire with any other person or persons to monopolize, any part of trade or
commerce.
(3) For purposes of the importation of prescription drugs under Title 26, Chapter 62,
Canadian Prescription Drug Importation Act, in addition to the activities described in
Subsections (1) and (2), a unilateral act in the form of a trust or otherwise, in restraint of trade
or commerce, is unlawful.
Legislative Review Note
Office of Legislative Research and General Counsel