DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 384 Original 2018 Regular Session Talbot
Abstract: Requires the La. Department of Health to develop and submit for federal approval a
program for importing prescription drugs from Canada.
Proposed law creates the Canadian Prescription Drug Importation Program to be administered by
the La. Department of Health (LDH).
Proposed law requires LDH to prepare and submit to the secretary of the U.S. Department of Health
and Human Services all of the following:
(1)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 applicable provisions of federal law.
(2)An application for all of the following:
(a)The approval of a program to allow for the importation of prescription drugs from
Canada into the state under the applicable provisions of federal law.
(b)Certification by the secretary of the U.S. Department of Health and Human Services
to the U.S. Congress, in accordance with federal law, that importation of Canadian
prescription drugs will do all of the following:
(i)Pose no additional risk to public health and safety.
(ii)Result in a significant reduction in the cost of covered products to the
American consumer.
Proposed law requires that the letter of intent described in (1) above be submitted on or before July
31, 2018; and that the application described in (2) above be submitted on or before Dec. 31, 2018.
Proposed law requires that the application for the prescription drug importation program feature all
of the following:
(1)A description of the program including measures that will be taken to comply with existing
state and federal law and to minimize risk to public health and safety.
(2)An estimate of the reduction in the cost of covered products and health insurance premiums to La. consumers.
Proposed law stipulates that if the application for the program is not approved by the federal health
agency, then LDH shall submit a new application on or before Dec. 1 annually until the earlier of the
following dates:
(1)The date of approval of the program.
(2)Jan. 1, 2023.
Proposed law requires that or before Dec. 1 of each year that LDH submits an application for
approval of the prescription drug importation program, the department shall submit a written report
to the House and Senate committees on health and welfare regarding the results of the application
and any updated findings and recommendations.
Proposed law provides that prescription drug importation program shall feature all of the following
assurances, functions, requirements, and limitations:
(1)Allow for the importation of prescription drugs, exclusively, that have been identified by
LDH in the pharmaceutical importation list provided for in proposed law.
(2)Monitor consumer prices to ensure that market competition and routine health plan
administration provide significant savings for La. consumers.
(3)Specify the actions that LDH and the La. Department of Insurance will take if market
competition and routine health plan administration does not result in significant consumer
savings.
(4)Only use Canadian suppliers regulated under applicable federal or provincial laws of Canada.
(5)If required by the secretary of the U.S. Department of Health and Human Services, 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 the program does not import a generic prescription drug that would violate U.S.
patent laws.
(8)Comply with the track and trace requirements provided in the federal Drug Security and
Quality Act prior to allowing imported prescription drugs to come into possession of the
wholesaler.
(9)Ensure that the prescription drug supply and distribution chain is in compliance with present
law and U.S. federal law after imported prescription drugs are in the possession of the wholesaler.
(10)Ensure that the program is adequately financed through an efficient approach that does not
jeopardize significant consumer savings.
(11)Require publication of a wholesaler's acquisition cost of each imported prescription drug.
(12)With respect to 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.
(13)Include an audit function that complies with the provisions of proposed law.
(14)Ensure that participation by any wholesaler, health insurer, healthcare provider, or consumer
is voluntary.
Proposed law requires LDH to coordinate with the La. Board of Pharmacy to develop and
periodically revise a pharmaceutical importation list. Provides that such list shall include
prescription drugs that may be imported from Canada under present law and U.S. federal law and
that are expected to generate substantial savings for La. consumers. Stipulates that the list shall not
include any prescription drug that may not be imported under present law or U.S. federal law.
Proposed law requires any health insurer participating in the program to provide LDH and the La.
Board of Pharmacy or the board's designee with any information that LDH requests concerning the
net per-unit cost of the health insurer's 20 highest-cost drugs and the quantity of those drugs
dispensed by the health insurer to covered individuals. Stipulates that no such information shall
contain any personally identifiable health information protected by federal law. Declares all such
information to be proprietary information and not subject to disclosure under present law relative
to public records, R.S. 44:1 et seq.
Proposed law requires LDH to review the pharmaceutical importation list every three months to
ensure that the list continues to meet the requirements of proposed law.
Proposed law provides that the prescription drug importation program shall include audits of
suppliers, importers, wholesalers, retail pharmacies, health insurers, and other persons who
participate in the program as appropriate and necessary. Requires that such audit function
incorporate a review of all of the following:
(1)The methodology used to determine the prescription drugs with the greatest potential for
savings.
(2)The process used to ensure that Canadian suppliers are of high quality, high performance,
and in full compliance with Canadian laws.
(3)Methods used to ensure that prescription drugs imported under the program are not shipped, sold, or dispensed outside of La. once in the possession of the wholesaler or the wholesaler's
contractors.
(4)Processes used to ensure that imported prescription drugs are pure, unadulterated, potent, and
safe.
Proposed law requires that the audit function verify all of the following:
(1)That participating pharmacies and administering providers are not charging rates that
jeopardize significant consumer savings to any consumer or participating health plan.
(2)That the program is adequately financed to support all administrative functions while
generating significant consumer savings.
(3)That the program does not put consumers at a higher health and safety risk than if the
program did not exist.
(4)That the program continues to provide La. consumers with substantial savings on imported
prescription drugs.
(5)That the ability of any participating pharmacy to negotiate professional fees is not impeded.
Proposed law requires LDH to collaborate with the La. Department of Insurance to conduct audits
in accordance with proposed law and to enforce the provisions of proposed law.
Proposed law provides that LDH shall commence to implement the prescription drug importation
program only after all of the following have occurred:
(1)The secretary of the U.S. Department of Health and Human Services certifies to the U.S.
Congress that importation of Canadian prescription drugs will pose no additional risk to
public health and safety, and will result in a significant reduction in the cost of covered
products to the American consumer.
(2)The secretary of the U.S. Department of Health and Human Services approves the program.
(3)All other requirements of present law and federal law for the importation of prescription
drugs from Canada have been satisfied.
(4)LDH has collected fees authorized by proposed law in an amount sufficient to cover the
startup costs of the program.
Proposed law provides that LDH may do all of the following prior to commencing to implement the
prescription drug importation program:
(1)Design the program. (2)Negotiate with wholesalers in Canada and the U.S. regarding the potential implementation
of the program.
Proposed law prohibits LDH from doing any of the following prior to commencing to implement the
prescription drug importation program:
(1)Authorizing the importation of any prescription drugs under proposed law.
(2)Implementing any provisions of the program that would violate present law or U.S. federal
law.
Proposed law requires LDH to implement the prescription drug importation program by contracting
with any wholesale pharmacy that meets all of the following conditions:
(1)Is licensed as a wholesale drug distributor in La.
(2)Is compliant with all applicable program requirements provided in proposed law.
(3)Agrees to any additional conditions of participation that the department may establish in
accordance with the requirements of United States federal law and this Part.
Proposed law requires LDH to assess fees to entities that participate in the prescription drug
importation program to cover all startup and implementation costs of the program. Stipulates that
LDH shall utilize such fee amounts exclusively for implementation of the provisions of proposed
law. Provides that such fees shall not exceed the amount necessary to cover the costs of
implementing proposed law.
Proposed law authorizes the La. Department of Insurance to assess fees to insurers that participate
in the prescription drug importation program in connection with proposed law relative to the
following:
(1)Actions in cases when health plan administration does not result in significant savings.
(2)Conducting audits in collaboration with LDH.
Proposed law stipulates that the La. Department of Insurance shall utilize fee amounts collected in
accordance with proposed law exclusively for the functions specified in proposed law. Provides that
such fees shall not exceed the amount necessary to cover the costs to the department of administering
its duties pursuant to proposed law.
Proposed law prohibits pharmaceutical manufacturers from doing any of the following:
(1)Taking 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 prescription drug importation program. (2)Discriminating against a pharmaceutical supplier, distributor, or dispenser based on whether
the supplier, distributor, or dispenser participates in the prescription drug importation
program.
Proposed law authorizes the La. attorney general to bring a civil action or seek an injunction against
any person who violates proposed law relative to prohibited conduct by pharmaceutical
manufacturers, and to seek any remedy available for violations of state antitrust law.
Proposed law provides that for each drug with an annual wholesale acquisition cost of $10,000 or
more, a pharmaceutical manufacturer shall submit a report to LDH if a price increase for that drug
will result in an increase in the wholesale acquisition cost that is equal to either of the following:
(1)At least 7.5% over a period of 12 months.
(2)At least 18% over a period of 36 months.
Proposed law requires pharmaceutical manufacturers subject to the reporting requirement provided
in proposed law to submit their reports to LDH no later than 30 days before the day on which the
price increase takes effect. Requires that each report include all of the following information:
(1)The increase in the cost of the drug, expressed as a percentage increase based on the price
of the drug before the cost increase.
(2)A justification for each price increase.
(3)The date on which each price increase takes effect.
(4)The total profit derived from sales of the drug, expressed in total dollars and as a percentage
of the pharmaceutical manufacturer's total profits for that calendar year.
(5)The total expenditures of the pharmaceutical manufacturer on materials and manufacturing
for the drug.
(6)The total research and development costs paid by the pharmaceutical manufacturer for the
development and production of the drug.
(7)The total administrative, marketing, and advertising costs for the drug.
(8)Any costs associated with direct-to-consumer coupons and patient assistance programs for
the drug.
Proposed law requires LDH to publish information on drug price increases submitted by
pharmaceutical manufacturers pursuant to proposed law at least once in every three month period
and in a manner that allows the information to be identified separately for each drug. Stipulates that
in doing so, LDH shall not disclose any information deemed to be a trade secret under present law. (Adds R.S. 40:2255.21-2255.30)