2022 -- H 7116

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LC003746

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS - PHARMACEUTICAL COST

TRANSPARENCY

     

     Introduced By: Representatives J Lombardi, and Morales

     Date Introduced: January 20, 2022

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS"

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is hereby amended by adding thereto the following chapter:

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CHAPTER 19.3

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PHARMACEUTICAL COST TRANSPARENCY

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     5-19.3-1. Pharmaceutical cost transparency -- Findings.

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     The general assembly hereby finds and declares as follows:

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     (1) The costs of prescription drugs have been increasing with regularity;

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     (2) Containing health care costs requires containing prescription drug costs; and

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     (3) In order to contain prescription drug costs, it is essential to understand the drivers of

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those costs, as transparency is the first step toward cost containment.

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     5-19.3-2. Definitions.

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     As used in this chapter:

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     (1) "Board" means the state board of pharmacy created pursuant to § 5-19.1-3.

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     (2) "Department" means the Rhode Island department of health.

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     (3) "Manufacturer" means a person or entity licensed to manufacture legend drugs pursuant

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to § 5-19.1-12.

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     (4) "Prescription drug" means a drug as defined in 21 U.S.C. § 321.

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     5-19.3-3. Identification of high cost prescription drugs.

 

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     (a)(1) The state board of pharmacy, in collaboration with the department, shall identify

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annually up to fifteen (15) prescription drugs on which the state spends significant health care

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dollars and for which the wholesale acquisition cost has increased by fifty percent (50%) or more

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over the past five (5) years or by fifteen percent (15%) or more over the past twelve (12) months,

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creating a substantial public interest in understanding the development of the drugs' pricing. The

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drugs identified shall represent different drug classes.

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     (2) The board shall provide to the office of the attorney general the list of prescription drugs

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developed pursuant to this subsection and the percentage of the wholesale acquisition cost increase

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for each drug and shall make the information available to the public on the board's website.

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     (b)(1) For each prescription drug identified pursuant to subsection (a) of this section, the

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office of the attorney general shall require the drug's manufacturer to provide a justification for the

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increase in the wholesale acquisition cost of the drug in a format that the attorney general

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determines to be understandable and appropriate. The manufacturer shall submit to the office of

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the attorney general all relevant information and supporting documentation necessary to justify the

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manufacturer's wholesale acquisition cost increase, which may include:

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     (i) All factors that have contributed to the wholesale acquisition cost increase;

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     (ii) The percentage of the total wholesale acquisition cost increase attributable to each

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factor; and

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     (iii) An explanation of the role of each factor in contributing to the wholesale acquisition

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cost increase.

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     (2) Nothing in this section shall be construed to restrict the legal ability of a prescription

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drug manufacturer to change prices to the extent permitted under federal law.

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     (c) The attorney general, in consultation with the department, shall provide a report to the

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general assembly on or before December 1 of each year based on the information received from

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manufacturers pursuant to this section. The attorney general shall also post the report on the office

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of the attorney general's website.

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     (d) Information provided to the office of the attorney general pursuant to this section is

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exempt from public inspection and copying and is not a public record pursuant to chapter 2 of title

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38 ("access to public records"), and shall not be released in a manner that allows for the

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identification of an individual drug or manufacturer or that is likely to compromise the financial,

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competitive, or proprietary nature of the information.

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     5-19.3-4. Injunctive relief.

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     The attorney general may bring a civil action in the superior court for Providence county

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for injunctive relief, costs, and attorneys' fees, and to impose on a manufacturer that fails to provide

 

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the information required by § 5-19.3-3(b) a civil penalty of no more than ten thousand dollars

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($10,000) per violation. Each unlawful failure to provide information shall constitute a separate

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violation.

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     5-19.3-5. Rulemaking.

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     (a) On or before January l, 2023, the insurance commissioner shall adopt rules and

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regulations to require all health insurers that offer health benefit plans to Rhode Island residents

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through HealthSource RI or any successor health benefit exchange to provide information to

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enrollees, potential enrollees, and health care providers about the exchange plans' prescription drug

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formularies.

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     (b) The rules shall ensure that:

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     (1) The formulary is posted online in a standard format established by the insurance

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commissioner;

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     (2) The formulary is updated frequently and is searchable by enrollees, potential enrollees,

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and health care providers; and

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     (3) The formulary includes information about the prescription drugs covered, applicable

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cost-sharing amounts, drug tiers, prior authorization, step therapy, and utilization management

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requirements.

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     5-19.3-6. Dispensing fees.

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     (a) The department shall use the same dispensing fee in its reimbursement formula for

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340B prescription drugs as the department uses to pay for non-340B prescription drugs under the

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Medicaid program.

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     (b) Notwithstanding the provisions of subsection (a) of this section, the department is

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authorized to modify the dispensing fee or reimbursement formula provided to federally qualified

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health centers and Title X family planning clinics for dispensing 340B prescription drugs to

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Medicaid beneficiaries.

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     5-19.3-7. Drug reimbursement - Reporting.

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     (a) The department shall:

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     (1) Determine the formula used by other states' Medicaid programs to reimburse covered

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entities that use 340B pricing for dispensing prescription drugs to Medicaid beneficiaries;

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     (2) Evaluate the advantages and disadvantages of using the same dispensing fee in its

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reimbursement formula for 340B prescription drugs as the department uses to pay for non-340B

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prescription drugs under the Medicaid program; and

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     (3) Identify the benefits, if any, of 340B drug pricing to consumers, other payers, and the

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overall health care system.

 

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     (b) On or before March 15, 2023, the department shall report to the house of

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representatives, the senate, and the governor's office regarding its findings and recommendations,

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including recommended modifications to Rhode Island's 340B reimbursement formula, if any, and

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the financial implications of implementing any recommended modifications.

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     5-19.3-8. Out-of-pocket prescription drug limits – Advisory commission.

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     (a) The Rhode Island department of health shall convene an advisory commission to

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develop options for all qualified health benefit plans to be offered on the Rhode Island health benefit

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exchange for the 2024 plan year, including:

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     (1) One or more plans with a higher out-of-pocket limit on prescription drug coverage than

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the limit established pursuant to current law and regulations; and

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     (2) Two (2) or more plans with an out-of-pocket limit at or below the limit established

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pursuant to current law and regulations.

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     (b) The advisory commission shall include at least the following members:

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     (1) A representative of the Rhode Island health benefits exchange, appointed by the

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governor;

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     (2) A representative of each of the commercial health insurers offering plans on the Rhode

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Island health benefit exchange, appointed by each insurer;

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     (3) The insurance commissioner, or designee;

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     (4) A representative of the exchange advisory board established pursuant to § 42-157-7,

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appointed by the governor;

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     (4) A representative of a Rhode Island AIDS services organization, appointed by the

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governor;

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     (5) The director of the department of administration, or designee;

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     (6) The director of the department of health, or designee;

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     (7) A consumer nominated by a Rhode Island AIDS services organization and appointed

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by the governor;

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     (8) A representative of the American Cancer Society appointed by the governor; and

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     (9) A consumer nominated by the American Cancer Society and appointed by the governor.

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     (c)(1) The advisory commission shall meet at least six (6) times prior to the department

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submitting plan designs to the state board of pharmacy for approval.

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     (2) In developing the standard qualified health benefit plan designs for the 2024 plan year,

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the department shall present the recommendations of the advisory commission established pursuant

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to this section.

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     5-19.3-9. Reports.

 

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     (a) On or before February 15, 2023, the department shall provide to the governor, the house

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of representatives, and the senate:

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     (1) An overview of the cost-share increase trend for all qualified health benefit plans

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offered on the Rhode Island health benefit exchange for the 2017 through 2022 plan years that were

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subject to the out-of-pocket prescription drug limit established in state law or regulation;

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     (2) Detailed information regarding lower cost-sharing amounts for selected services that

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will be available in all qualified health benefit plans in the 2023 plan year due to the flexibility to

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increase the out-of-pocket prescription drug limits established pursuant to this chapter;

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     (3) A comparison of the bronze-level qualified health benefit plans offered in the 2023 plan

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year in which there will be flexibility in the out-of-pocket prescription drug limit established under

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state law and regulation;

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     (4) Information about the process engaged in by the advisory commission established in

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this chapter and the information considered to determine modifications to the cost-sharing amounts

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in all qualified health benefit plans for the 2023 plan year, including prior year utilization trends,

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feedback from consumers and health insurers, health benefit exchange outreach and education

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efforts, and relevant national studies;

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     (5) Cost-sharing information for standard qualified health benefit plans from states with

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federally-facilitated exchanges compared to those on the Rhode Island health benefit exchange;

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and

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     (6) An overview of the outreach and education plan for enrollees in all qualified health

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benefit plans offered on the Rhode Island health benefit exchange.

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     (b) On or before February l, 2024, the department shall report to the governor, the house

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of representatives, and the senate:

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     (1) Enrollment trends in all qualified health benefit plans offered on the Rhode Island

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health benefit exchange; and

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     (2) Recommendations from the advisory commission established pursuant to § 5-19.3-8

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regarding modification of out-of-pocket prescription drug cost limits.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS - PHARMACEUTICAL COST

TRANSPARENCY

***

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     This act would direct the state board of pharmacy, in collaboration with the department of

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health, to annually identify up to fifteen (15) prescription drugs on which the state spends

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significant health care dollars due to increases in costs. This list would be provided to the attorney

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general's office, and the attorney general's office would require the drug's manufacturers to submit

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relevant information and documentation to justify these cost increases. The act would also direct

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the department of health to use the same dispensing fee in its reimbursement formula for 340B

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prescription drugs as it uses to pay for non-340B prescription drugs under the Medicaid program,

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and to provide information to the general assembly and the governor about these programs. The act

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would also establish an advisory commission on out-of-pocket prescription drug costs who would

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study these costs and make reports and recommendations to the governor and the general assembly.

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     This act would take effect upon passage.

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