SECTIONS 130500-130502 - California Statutes

HEALTH AND SAFETY CODE

SECTION 130500-130502

130500. (a) This division shall be known, and may be cited, as the
California Discount Prescription Drug Program.
(b) This division shall become operative on and after July 1,
2010.
(c) The California Discount Prescription Drug Program shall be
implemented only if, and to the extent that, a Budget Act or other
statute that is enacted on or before February 1, 2015, includes or
makes an appropriation of moneys to the department to implement this
program.
(d) Notwithstanding any other provision of this division, if the
California Discount Prescription Drug Program is not implemented
pursuant to subdivision (c), this division shall become inoperative
on February 1, 2015, and as of January 1, 2016, is repealed, unless a
later enacted statute, that is enacted before January 1, 2016,
deletes or extends the dates on which it becomes inoperative and is
repealed.

130501. For purposes of this division, the following definitions
shall apply:
(a) "Average manufacturer's price" has the same meaning as this
term is defined in Section 1927(k)(1) of the federal Social Security
Act (42 U.S.C. Sec. 1396r-8(k)(1)).
(b) "Department" means the State Department of Health Care
Services.
(c) "Eligible Californian" means a resident of the state who meets
any one or more of the following:
(1) Has total unreimbursed medical expenses equal to at least 10
percent of his or her family's income where the family's income does
not exceed the state median family income.
(2) To the extent allowed by federal law, is enrolled in the
Medicare Program, but whose prescription drugs are not covered by the
Medicare Program.
(3) Has a family income that does not exceed 300 percent of the
federal poverty guidelines and who does not have outpatient
prescription drug coverage paid for by any one of the following:
(A) In whole by the Medi-Cal program.
(B) In whole or in part by the Healthy Families Program or other
programs funded by the state.
(C) In whole or in part by another third-party payer, provided
that the individual has not reached the annual limit on his or her
prescription drug coverage.
(4) For purposes of this subdivision, the cost of drugs provided
under this division is considered an expense incurred by the family
for eligibility determination purposes.
(d) "Fund" means the California Discount Prescription Drug Program
Fund.
(e) "Manufacturer" means a drug manufacturer as defined in Section
4033 of the Business and Professions Code.
(f) "Manufacturer's rebate" means the rebate for an individual
drug or aggregate rebate for a group of drugs necessary to make the
price for the drug ingredients equal to or less than the applicable
benchmark price.
(g) "Medicaid best price" has the same meaning as this term is
defined in Section 1927(c)(1)(C) of the Social Security Act (42
U.S.C. Sec. 1396r-8(c)(1)(C)).
(h) "Multiple-source drug" has the same meaning as this term is
defined in Section 1927(k)(7) of the Social Security Act (42 U.S.C.
Sec. 1396r-8(k)(7)).
(i) "National drug code" or "NDC" means the unique 10-digit,
three-segment number assigned to each drug product listed under
Section 510 of the federal Food, Drug, and Cosmetic Act (21 U.S.C.
Sec. 360). This number identifies the labeler or vendor, product, and
trade package.
(j) "National sales data" means prescription data obtained from a
national-level prescription tracking service.
(k) "Participating manufacturer" means a drug manufacturer that
has contracted with the department to provide an individual drug or
group of drugs for the program.
(l) "Participating pharmacy" means a pharmacy that has executed a
pharmacy provider agreement with the department for this program.
(m) "Pharmacy contract rate" means the negotiated per prescription
reimbursement rate for drugs dispensed to eligible Californians. The
department shall establish a single, basic pharmacy rate, but may
contract at different rates with pharmacies in order to provide
access throughout the state.
(n) "Prescription drug" means any drug that bears the legend:
"Caution: federal law prohibits dispensing without prescription," "Rx
only," or words of similar import.
(o) "Private discount drug program" means a prescription drug
discount card or manufacturer patient assistance program that
provides discounted or free drugs to eligible individuals. For the
purposes of this division, a private discount drug program is not
considered insurance or a third-party-payer program.
(p) "Program" means the California Discount Prescription Drug
Program.
(q) "Single-source drug" has the same meaning as this term and the
term innovator multiple-source drug are defined in Section 1927(k)
(7) of the Social Security Act (42 U.S.C. Sec. 1396r-8(k)(7)).
(r) "Therapeutic category" means a drug or a grouping of drugs
determined by the department to have similar attributes and to be
alternatives for the treatment of a specific disease or condition.
(s) "Volume weighted average discount" means the aggregated
average discount for the drugs of a manufacturer, weighted by each
drug's percentage of the total prescription volume of that
manufacturer's drugs. For purposes of this calculation, discounts
shall include any rebate amounts used to fund program costs pursuant
to Section 130542.1. Drugs excluded from contracting by the
department, pursuant to subdivision (d) of Section 130506 and in a
manner consistent with subdivision (c) of Section 130506, shall be
excluded from the calculation of the volume weighted average
discount. National sales data shall be used to calculate the volume
weighted average discount pursuant to Section 130506. Program
utilization data shall be used to calculate the volume weighted
average discount pursuant to Section 130507.

130502. The California Discount Prescription Drug Program is hereby
established within the department.