2013 -- S 0426

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LC01736

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- MEDICAID GENERIC DRUG

SAVINGS

     Introduced By: Senators Pichardo, Crowley, and Cool Rumsey

     Date Introduced: February 26, 2013

     Referred To: Senate Health & Human Services

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:

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     CHAPTER 14.7

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THE RHODE ISLAND MEDICAID GENERIC DRUG COMPETITION AND SAVINGS ACT

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     42-14.7-1. Short title. – This act shall be known and may be cited as the “Medicaid

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Generic Drug Competition And Savings Act.”

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     42-14.7-2. Definitions. – As used in this chapter:

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     (1) “Medicaid” means the Medicaid program, established in title XIX of the social

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security act, which provides medical benefits to groups of low-income people. In this chapter,

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“Medicaid” refers to the state Medicaid program managed by the state of Rhode Island.

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     (2) “Generics” or “generic drugs” means copies of brand name drugs that are no longer

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protected by patents. Generics are drugs that contain the same active ingredient, are identical in

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strength, dosage form, and route of administration as the brand name innovator drug and has the

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same indications, dosing, and labeling and provides the same efficacy and safety profile to

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patients as the brand name innovator drug.

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     (3) “Generic manufacturers” means manufacturers, both domestic and international, that

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manufacture generic drugs and distribute those generics throughout the state through various

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distribution systems.

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     (4) “Competitive bidding” means a transparent procurement method in which bids from

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generic manufacturers are invited by openly advertising the scope, specifications, and terms and

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conditions of the proposed contract as well as the criteria by which the bids will be evaluated. The

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objective of competitive bidding is obtaining goods at the lowest prices by stimulating

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competition, and by preventing favoritism.

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     42-14.7-3. Findings. – The general assembly hereby finds and declares that:

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     (1) With every prescription filled with a generic, the consumer receives the same

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medicine as the brand name, with the same quality and same result, but at a much lower cost.

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     (2) For more than twenty-five (25) years, America’s generic pharmaceutical industry has

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been providing the food and drug administration (FDA) approved generic versions of brand name

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medicines at a savings to consumers of thirty percent (30%) to as much as eighty percent (80%).

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     (3) Millions of Medicaid recipients nationwide are using generics to treat a variety of

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medical conditions, including infection, heart disease and cancer. Generics are rigorously tested

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by the FDA and must prove that they are the same medicine with the same active ingredient,

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strength and dosage as their brand name counterpart. Today, there are thousands of generic drugs

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available and all are manufactured and inspected under the same strict quality guidelines as a

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brand.

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     (4) For most brand name products there are multiple generics available and these generics

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can vary greatly in prices.

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     (5) While the state Medicaid program has encouraged the use of generics drugs by

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Medicaid recipients, it has not taken advantage of the savings that could be generated by taking

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advantage of the competition among generic manufacturers which vary greatly in their pricing of

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generic drugs.

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     42-14.7-4. Competitive bidding. – The Rhode Island department of human services shall

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require all generic manufacturers whose products are to be provided to Medicaid recipients to

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engage in a competitive bidding process created by the department of health to ensure that it is

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providing Medicaid recipients with quality generic products at a competitively bid cost.

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     SECTION 2. This act shall take effect upon passage.

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LC01736

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- MEDICAID GENERIC DRUG

SAVINGS

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     This act would require manufacturers of generic drugs provided to Medicaid recipients to

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engage in a competitive bidding process.

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     This act would take effect upon passage.

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LC01736

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