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SB19-005

Import Prescription Drugs From Canada

Concerning wholesale importation of prescription pharmaceutical products from Canada for resale to Colorado residents, and, in connection therewith, making an appropriation.
Session:
2019 Regular Session
Subject:
Public Health
Bill Summary

Prescription drugs - Canadian prescription drug importation program - federal approval - eligible importers and suppliers - eligible prescription drugs - distribution requirements - reports - rules - appropriations. The act creates the "Canadian Prescription Drug Importation Program" (program) in the department of health care policy and financing (department). On or before September 1, 2020, the department shall submit a request to the United States secretary of health and human services for approval of the program. The department shall begin operating the program not later than 6 months after receiving such approval. The department may expend money for the purpose of requesting approval of the program, but the department cannot spend any other money to implement the program until the department receives approval of the program.

Upon receiving approval of the program, the department shall contract with 1 or more vendors to provide services under the program. Each vendor, in consultation with the department and any other vendors, shall establish a wholesale prescription drug importation list (importation list) that identifies the prescription drugs that have the highest potential for cost savings to the state. Each vendor shall revise the list at least annually and at the direction of the department. The department shall review the importation list at least every 3 months to ensure that it continues to meet the requirements of the program. The department may direct a vendor to revise the list, as necessary.

Each vendor shall:

  • Identify, in consultation with the department, Canadian suppliers who are in full compliance with relevant Canadian federal and provincial laws and regulations and who have agreed to export prescription drugs identified on the importation list;
  • Verify that such Canadian suppliers meet the requirements of the program and will export prescription drugs at prices that provide cost savings to the state;
  • Contract with such eligible Canadian suppliers, or facilitate contracts between eligible importers and Canadian suppliers, to import prescription drugs under the program;
  • Assist the department in developing and administering a distribution program within the program;
  • Assist the department with the preparation of an annual report and provide any information requested by the department for the report;
  • Ensure the safety and quality of drugs imported under the program;
  • Maintain a list of all eligible importers that participate in the program;
  • Ensure compliance with the federal "Drug Quality and Security Act" by all Canadian suppliers, eligible importers, distributors, and other participants in the program;
  • Provide an annual financial audit of its operations to the department;
  • Provide to the department quarterly financial reports specific to the program, which reports must include information concerning the performance of the vendor's subcontractors and vendors;
  • Submit evidence of a surety bond in an amount of at least $25,000 with any bid or initial contract negotiation documents and maintain documentation of evidence of the surety bond with the department throughout the contract term; and
  • Maintain the information and documentation submitted to the department for at least 7 years.

The act imposes certain requirements for drugs that are imported under the program, and the act prohibits certain drugs from being imported under the program.

The act states that the following entities are eligible importers under the program:

  • A pharmacist or wholesaler employed by or under contract with a medicaid pharmacy, for dispensing to the pharmacy's medicaid recipients;
  • A pharmacist or wholesaler employed by or under contract with the department of corrections, for dispensing to inmates in the custody of the department of corrections;
  • Commercial plans, as defined by rules promulgated by the medical services board and as approved by the federal government; and
  • A licensed Colorado pharmacist or wholesaler approved by the department.

An eligible importer may import a prescription drug from a Canadian supplier if:

  • The drug meets federal food and drug administration standards and is not a controlled substance, biological product, infused or intravenously injected drug, a drug that is inhaled during surgery, or a parenteral drug deemed a threat to public health; and
  • Importing the drug is expected to generate cost savings and would not violate federal patent laws.

The act requires the department to designate an office or division that must be a licensed pharmaceutical wholesaler or that shall contract with a licensed pharmaceutical wholesaler. The designated office shall:

  • Set a maximum profit margin so that a wholesaler, distributor, pharmacy, or other licensed provider participating in the program maintains a profit margin that is no greater than the profit margin that the wholesaler, distributor, pharmacy, or other licensed provider would have earned on the equivalent nonimported drug;
  • Exclude generic products if the importation of the products would violate United States patent laws applicable to United States-branded products;
  • Comply with certain federal requirements concerning drug quality and security; and
  • Determine a method for covering the administrative costs of the program.

Each participating eligible importer and Canadian supplier shall submit to the vendor specified information about each drug to be acquired by the importer or to be supplied by the Canadian supplier under the program.

The department shall immediately suspend the importation of a specific drug or the importation of drugs by a specific eligible importer if it discovers that any drug or activity is in violation of the act or any federal or state law or regulation. The department may revoke the suspension if, after conducting an investigation, it determines that the public is adequately protected from counterfeit or unsafe drugs being imported into this state.

The executive director of the department shall promulgate rules as necessary for the administration of the program. The department shall approve a method of financing the administrative costs of the program, which method may include imposing a fee on each prescription pharmaceutical product sold through the program or any other appropriate method determined by the department to finance administrative costs. The department shall not require a fee in an amount that the department determines would significantly reduce consumer savings.

On or before December 1, 2021, and on or before December 1 each year thereafter, the department shall submit a report to the governor, the president of the senate, and the speaker of the house of representatives concerning the operation of the program during the previous fiscal year.

For the 2019-20 fiscal year, the act appropriates $1,041,802 to the department to implement the act, $134,719 of which is reappropriated to the department of law to provide legal services to the department.


(Note: This summary applies to this bill as enacted.)

Status

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