Senate Calendar

thursday, february 26, 2004

52nd DAY OF ADJOURNED SESSION

TABLE OF CONTENTS

                                                                                                                Page No.

Third Reading

S. 261      Renewable portfolio standard, authorizing interveners in proceedings before the PSB, conservation & use of energy, establishing energy-efficiency standards for new appliances & equip.      515

S. 308      No child left behind act.................................................................... 515

House Proposal of Amendment

S. 303      Relating to debt adjusters................................................................. 515

Notice Calendar

Favorable

S. 231      Disposition of rights of decedents..................................................... 516

H. 593     Village of Bradford and the town of Bradford................................... 516

Favorable with Recommendation of Amendment

S. 54        Practice of optometry...................................................................... 516

S. 206      Intermunicipal police cooperation and services................................. 523

S. 214      Hearing officers remuneration........................................................... 529

S. 288      State programs and policies on prescription drugs............................ 530

                        Health and Welfare committee report....................................... 530

                        Finance committee report......................................................... 545

Committee Bill for Notice

S. 311      Miscellaneous changes in statutes affecting AOT.............................. 558

Concurrent Resolutions for Notice

(For text, see Addendum to today’s Calendar)

S.C.R. 45   Warren H. Fournier 2004 Swanton Citizen of the Year.................... 72

S.C.R. 46    Honoring John K. Sprague of Brookfield........................................ 73

H.C.R. 189  Bennington Project Independence................................................. 75

H.C.R. 190  Honoring Tim Comolli................................................................... 76

H.C.R. 191  Vermont Town Fire Warden Program........................................... 77

H.C.R. 192  In memory of Patricia Barr............................................................ 78

H.C.R. 193  Congratulating Jason Barrett.......................................................... 79

H.C.R. 194  In memory of Dr. James S. Shea................................................... 80

H.C.R. 195  Congratulating Kathryn Budnik...................................................... 81

H.C.R. 196  Congratulating Marcus Falion........................................................ 82

H.C.R. 197  Congratulating Charles W. Johnson............................................... 83

H.C.R. 198  Congratulating Kyle S. Field.......................................................... 84

H.C.R. 199  Congratulating Laura (Capsey) Scott............................................. 85

H.C.R. 200  Honoring Julius “Jules” Larrow...................................................... 86

H.C.R. 201  In memory of Woodbury E. Rouse................................................ 87

H.C.R. 202  In memory of Mary (Burke) Plouffe............................................... 88

H.C.R. 203  Honoring S. Stacy Chapman......................................................... 89

H.C.R. 204  In memory of Jean Louis Rainville.................................................. 90

H.C.R. 205  In memory of Owen C. Mccuin, Jr................................................ 90

H.C.R. 206  Congratulating BFA/Fairfax Cheerleading Team............................ 91

H.C.R. 207  In memory of Lillian Loomis Reynolds........................................... 92

H.C.R. 208  In memory of Ronald Sunderland.................................................. 93

H.C.R. 209  Honoring Mary Hard Bort............................................................. 94

ORDERS OF THE DAY

ACTION CALENDAR

Third Reading

S. 261

An act relating to a renewable portfolio standard, to authorizing interveners in proceedings before the public service board, to enabling an efficiency utility to develop appropriate combined heat and power systems that result in the conservation and efficient use of energy, and to establishing energy-efficiency standards for certain new appliances and equipment.

S. 308

An act relating to compliance with the no child left behind act.

House Proposal of Amendment

S. 303

An act relating to debt adjusters.

The House proposes to the Senate to amend the bill as follows:

First:  In Sec. 1, 8 V.S.A. § 4865(a), by striking “$250,000.00” and inserting in lieu thereof “$50,000.00”

Second:  In Sec. 1, by striking 8 V.S.A. § 4873 in its entirety and inserting in lieu thereof a new 8 V.S.A. § 4873 to read as follows:

§ 4873.  EXCEPTIONS

The provisions of this chapter shall not apply to the following:

(1)  any attorney admitted to the practice of law in this state, when engaged in such practice;

(2)  any bank, fiduciary or financing or lending institution authorized to transact business in this state financial institution as defined in subdivision 11101(32) of this title or a lender licensed under chapter 73 of this title, which performs debt adjustment in the regular course of its principal business;

(3)  any person acting pursuant to any law of this state or of the United States or acting under the order of a court;

(4)  any bona fide nonprofit religious, fraternal, or cooperative organization offering debt adjustment services exclusively for members; and

(5)  any employee of a licensee when acting in the regular course of his or her employment; and

(6)  a certified public accountant licensed in this state, when services are rendered in the course of his or her practice as a certified public accountant.

(No Senate amendments)

Notice Calendar

Favorable

S. 231

An act relating to the final disposition rights of decedents.

Reported favorably by Senator White for the Committee on Health and Welfare.

(Committee vote: 6-0-0)

H. 593

An act relating to the village of Bradford and the town of Bradford.

Reported favorably by Senator White for the Committee on Government Operations.

(Committee vote: 5-0-1)

(For House amendments, see House Journal for February 19, 2004, page 249)

Favorable with Recommendation of Amendment

S. 54

An act relating to the practice of optometry.

Reported favorably with recommendation of amendment by Senator Mayo for the Committee on Health and Welfare.

The Committee recommends that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  26 V.S.A. § 1703 is amended to read:

§ 1703.  DEFINITIONS

As used in this chapter:

(a)(1)  “Board” means the state optometry board.

(b)(2)  The “practice of optometry” is defined to be means any one or combination of the following practices performed without the use of drugs:

(1)(A)  The examination of the human eyes and visual system for purposes of:

(A)(i) ascertaining diagnosing refractive and functional ability; or

(B)(ii) detecting the possible diagnosing the presence of eye and adnexa disease or injury, treating the disease or injury with the appropriate pharmaceutical agents and procedures in accordance with this chapter, and making appropriate referrals to a licensed physician when signs of possible disease or injury are found the appropriate health care provider when warranted.

(2)(B)  The detection diagnosis and correction of anomalies of the refractive and functional ability of the visual system and the enhancement of visual performance including, but not limited to, the following:

(A)(i)  the prescribing and employment of ophthalmic lenses, prisms, autorefractor or other automatic testing devices, frames, ophthalmic aids, and prosthetic materials as consistent with the health of the eye;

(B)(ii)  the prescribing and employment of contact lenses; and

(C)(iii)  administering visual training, vision therapy, orthoptics, and pleoptics.

(c)(3)  “Disciplinary action” or “disciplinary cases” includes any action taken by a board against a licensee or applicant premised upon a finding of wrongdoing or unprofessional conduct by the licensee or applicant. It includes all sanctions of any kind, including obtaining injunctions, issuing warnings, reprimands, suspensions or revocations of licenses and other similar sanctions and ordering restitution.

(d)(4)  “Financial interest” means being:

(A)  a licensed practitioner of optometry,; or

(B)  a person who deals in goods and services which are uniquely related to the practice of optometry,; or

(C)  a person who has invested anything of value in a business which provides optometric services.

Sec. 2.  26 V.S.A. § 1719(b) is amended to read:

(b)  Unprofessional conduct means:

(1)  Conduct which evidences moral unfitness to practice the occupation.

(2)  Any of the following except when reasonably undertaken in an emergency situation in order to protect life, health or property:

(A)  Practicing or offering to practice beyond the scope permitted by law.

(B)  Accepting and performing occupational responsibilities which the licensee knows or has reason to know that he or she is not competent to perform. Performing treatments or providing services which a licensee is not qualified to perform or which are beyond the scope of the licensee’s education, training, capabilities, experience, or scope of practice.

(C)  Performing occupational services which have not been authorized by the consumer or his or her legal representative.

Sec. 3.  26 V.S.A. § 1723 is amended to read:

§ 1723.  USE OF DIAGNOSTIC PHARMACEUTICAL AGENTS

Notwithstanding any prohibition on the use of drugs in section 1703 of this title, an An optometrist licensed under this chapter, and pursuant to the further limitations of this subchapter may procure and use certain drugs topically applied to the eye and known as mydriatics, cycloplegics, and topical anesthetics.  Such use shall be for detection purposes only, and nothing in this subchapter shall be construed to permit the administering of drugs for the medical or therapeutic treatment of any disease or the performing of surgery.

Sec. 4.  26 V.S.A. § 1724 is amended to read:

§ 1724.  SPECIFIC DRUGS; CONCENTRATIONS FORMULARY COMMITTEE

(a)  A formulary committee is established which is comprised of the following members: 

(1)  two ophthalmologists licensed in this state appointed by the commissioner of health;

(2)  two optometrists licensed in this state appointed by the state board of optometry; and

(3)  two doctors of pharmacology appointed by the director of the office of professional regulation.

(b) After 30 days notice to and consultation with an ophthalmologist designated by the head of ophthalmology at the University of Vermont, Upon the request of the board, the formulary committee shall define the specific drugs or classes of drugs and the concentrations and strengths thereof which optometrists shall be allowed to use pursuant to this subchapter and subchapter 6 of this title and.  The formulary committee shall meet within 30 days of receiving a written request to change the optometry formulary and shall render a decision on the request within 30 days of meeting.  The board shall adopt the optometry formulary and notify the state board of pharmacy of the board’s actions.  In deciding whether to include a particular drug in the formulary, the committee shall seek to balance, among other factors, the drug’s utilization frequency and alternatives to the proposed drug with its potential systemic or other risks.

(c)  The formulary committee shall receive administrative assistance from the state board of optometry.

Sec. 5.  26 V.S.A. § 1728 is amended to read:

§ 1728.  USE OF THERAPEUTIC PHARMACEUTICAL AGENTS

(a)  Notwithstanding the provisions of sections 1703 and 1723 of this title to the contrary, an An optometrist licensed under this chapter who possesses the endorsement required under section 1729 of this title, may:

(1)  prescribe anti‑infective, anti‑inflammatory and dilation reversal drugs, provided that those drugs are prescribed only for topical application to the eye.  When steroids are prescribed under this section, the optometrist shall:

(A)  consult with an ophthalmologist if the patient’s condition has not improved within seven days after initiation of treatment; and

(B)  refer the patient to an ophthalmologist if the steroid is to be used for longer than ten days all pharmaceutical agents for the appropriate diagnosis, management, and treatment of the eye and adnexa.

(2)  remove superficial foreign bodies from the eye and adnexa oculi, perform epilation of the eyelashes including electrolysis, punctal dilation, and lacrimal irrigation, and insert punctal plugs.

(b)  Nothing in this subchapter shall be construed to permit:

(1)  the use of therapeutic ultrasound, the use of injections except for the appropriate emergency stabilization of a patient, or the performance of surgery or the treatment of glaucoma.  “Surgery” means any procedure in which human tissue is cut, penetrated, thermally or electrically cauterized except when performing electrolysis, or otherwise infiltrated by mechanical or laser means in a manner not specifically authorized by this act;

(2) Nothing in this chapter shall be construed to permit the use of lasers for any procedure other than diagnostic testing; or

(3)  a licensee to perform indocyanine green angiography, removal of benign skin lesions involving subcutaneous injections, sub tenons injections, retrobulbar injections, intraocular injections, ketamine (IM) for an infant’s examination under anesthesia, management of skin and conjunctival neoplasms, and botox injections.

* * *

Sec. 6.  26 V.S.A. § 1728a is added to read:

§ 1728a.  PERMISSIBLE TREATMENTS; GLAUCOMA TYPES

(a)  A licensee may treat the following types of glaucoma on patients who are 16 years of age or older:

(1)  adult primary open angle glaucoma;

(2)  exfoliative glaucoma;

(3)  pigmentary glaucoma;

(4)  low tension glaucoma;

(5)  inflammatory (uveitic) glaucoma; and

(6)  emergency treatment of angle closure glaucoma.

(b)  This section shall not prohibit a licensee from administering appropriate emergency stabilization treatment to a patient.

Sec. 7.  26 V.S.A. § 1728b is added to read:

§ 1728b.  DISCLOSURE OF INFORMATION

(a)  A licensee permitted to treat glaucoma shall provide to patients diagnosed with glaucoma a disclosure statement, printed or typed in easily readable format, which includes the following information:

(1)  the licensee’s professional qualifications and experience, including postgraduate education and training received relevant to the treatment of glaucoma, including special courses;

(2)  the name or names of postsecondary educational institutions attended, dates attended, and degrees awarded;

(3)  the title of the glaucoma treatment training program, and the name and address of the provider or sponsoring entity of the program;

(4)  beginning and ending dates of the glaucoma treatment training program;

(5)  a description of the content of the glaucoma treatment training program;

(6)  any credentials awarded;

(7)  the following statement:

“All patients have the right to choose to be treated by either an optometrist or an ophthalmologist.  I have just described my training as an optometrist.  Ophthalmologists go to medical school for four years after college, then engage in supervised practice in a three‑year residency.  Their further training allows them to perform surgery and treat the most complex cases.  Optometrists and ophthalmologists often work together treating diseases of the eye.  When collaboration is not enough to provide adequate care, I will refer you to an ophthalmologist.”

(b)  The signed disclosure of information form shall be filed in the patient’s records, and a copy shall be provided to the patient.

Sec. 8.  26 V.S.A. § 1728c is added to read:

§ 1728c.  USE OF ORAL THERAPEUTIC PHARMACEUTICAL AGENT; COMMUNICATION WITH PRIMARY CARE PROVIDER

A licensee who employs an oral therapeutic pharmaceutical agent, as identified by the formulary committee established in section 1724 of this title, which might prove to have significant systemic adverse reactions or systemic side effects shall, in a manner consistent with Vermont law, ascertain the risk of systemic side effects through either a case history or by communicating with the patient’s primary care provider.  The licensee shall also communicate with the patient’s primary care provider, or with a physician skilled in diseases of the eye, when in the professional judgment of the licensee, it is medically appropriate.  The communication shall be noted in the patient’s permanent record.  The methodology of communication shall be determined by the licensee.

Sec. 9.  26 V.S.A. § 1728d is added to read:

§ 1728d.  DURATION OF TREATMENT WITHOUT REFERRAL

(a)  If a glaucoma patient does not respond to up to three topically administered pharmaceutical agents within a reasonable time, the licensee shall refer the patient to a licensed ophthalmologist.  No glaucoma patient shall be treated by an optometrist with more than three topically administered agents at any given time. 

(b)  If an oral medication is required to obtain an adequate clinical response, the licensee shall consult with a licensed ophthalmologist as soon as clinically prudent following initiation of the oral medication.  This section shall not require that the licensee transfer care of the patient to the consulting ophthalmologist, but does require that the patient be seen by the consulting ophthalmologist.

Sec. 10.  26 V.S.A. § 1729 is amended to read:

§ 1729.  APPLICATION; EXAMINATION

(a)  Upon application, the board shall certify eligible licensees to use therapeutic drugs and to remove superficial foreign bodies perform procedures as authorized by section 1728 subdivision 1728(a)(2) of this title, if the applicant meets the requirements of section 1715 of this chapter for licensure by examination or meets the requirements of section 1716 of this chapter for licensure by endorsement, and is authorized under the license of another jurisdiction to use therapeutic pharmaceutical agents.

* * *

(d)  A licensee who is certified to use therapeutic pharmaceutical agents shall demonstrate proof of current cardiopulmonary resuscitation certification as a condition of initial certification and of license renewal.  Acceptable courses shall include:

(1)  courses in external cardiopulmonary resuscitation which are approved by the Vermont Heart Association or the American Red Cross; and

(2)  courses which include a review of diseases or conditions which might produce emergencies such as anaphylactic shock, diabetes, heart condition, or epilepsy.

(e)  A licensee certified to use therapeutic pharmaceutical agents shall, as part of required continuing education, receive not less than 50 percent of his or her continuing education in the use of pharmaceuticals, including treating possible complications arising from their use, and the treatment of glaucoma.

Sec. 11.  26 V.S.A. § 1729a is added to read:

§ 1729a.  PREREQUISITES TO TREATING GLAUCOMA

A licensee who is already certified to use therapeutic pharmaceutical agents and who graduated from a school of optometry prior to 2003 and is not certified in another jurisdiction having substantially similar prerequisites to treating glaucoma shall, in addition to being certified to use therapeutic pharmaceutical agents, provide to the board verification of successful completion of an 18‑hour course and examination offered by the State University of New York State College of Optometry or similar accredited institution.  Successful completion shall include passing an examination substantially equivalent to the relevant portions on glaucoma and orals of the examination given to current graduates of optometry school and shall require the same passing grade.  The course shall cover the diagnosis and treatment of glaucoma and the use of oral medications and shall be taught by both optometrists and ophthalmologists.  In addition, the licensee shall collaborate with an ophthalmologist regarding his or her current glaucoma patients for six months and at least five new glaucoma patients before treating glaucoma patients independently.  These five new glaucoma patients shall be seen at least once by the collaborating ophthalmologist.

Sec. 12.  SUNSET; REPORT

(a)  26 V.S.A. § 1724 (formulary committee) shall be repealed in its entirety on December 31, 2005.  Any formulary in effect on this date shall remain in effect unless or until a process for adopting a new formulary is authorized by law.

(b)  On or before December 1, 2005, the director of the office of professional regulation shall submit a report to the general assembly which evaluates the strengths and weaknesses of the amendments to 26 V.S.A. § 1724 (formulary committee) contained in this act.

(Committee vote: 6-0-0)

Reported favorably by Senator Campbell for the Committee on Appropriations.

(Committee vote: 7-0-0)

S. 206

An act relating to intermunicipal police cooperation and services.

Reported favorably with recommendation of amendment by Senator White for the Committee on Government Operations.

The Committee recommends that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  21 V.S.A. § 1722(13) is amended to read:

(13)  “Municipal employer” means a city, town, village, fire district, lighting district, consolidated water district, housing authority, union municipal district, or any of the political subdivisions of the state of Vermont which employs five or more employees as defined in this section.

Sec. 2.  24 V.S.A. § 1936(a) is amended to read:

(a)  If the legislative body of a municipality does not establish a police department or appoint a chief of police, temporary police officers appointed pursuant to subsection (a) of section 1931 1931(a) of this title shall serve under the direction and control of the constable of the municipality, unless the town votes at an annual or special town meeting duly warned for such purpose to have the temporary police officers under the direction and control of the legislative body.

Sec. 3.  24 V.S.A. § 1938(a) is amended to read:

(a)  Municipalities as defined in section 2001 of this title Cities, towns, incorporated villages, the University of Vermont, sheriffs, and state agencies may enter into agreements to provide for intermunicipal police services.  Intermunicipal police services include general police services, task forces, and other specialized investigative units to provide police services within the boundaries of the participating municipalities and counties.  This section shall only be applicable to such specialized investigative units or task forces and shall not apply to arrangements for basic or general police services.

Sec. 4.  24 V.S.A. § 1939 is added to read:

§ 1939.  LAW ENFORCEMENT ADVISORY BOARD

(a)  A law enforcement advisory board is created within the department of public safety to advise the commissioner of public safety, the governor, and the general assembly on issues involving the cooperation and coordination of all agencies which exercise law enforcement responsibilities.  The board shall review any matter which affects more than one law enforcement agency.  The board shall comprise the following members:

(1)  the commissioner of the department of public safety;

(2)  the director of the Vermont state police;

(3)  the director of the Vermont criminal justice support division;

(4)  a member of the Vermont association of chiefs of police appointed by the president of the association;

(5)  a member of the Vermont sheriff’s association appointed by the president of the association;

(6)  a representative appointed by the Vermont league of cities and towns appointed by the executive director;

(7)  a member of the Vermont police association appointed by the president of the association;

(8)  the attorney general or his or her designee;

(9)  a state’s attorney appointed by the executive director of the department of state’s attorneys and sheriffs;

(10)  the U.S. attorney or his or her designee; and

(11)  the executive director of the Vermont criminal justice training council.

(b)  The board shall elect a chair and a vice chair which shall rotate among the various member representatives.  Each member shall serve a term of two years.  The board shall meet at the call of the chair.  A quorum shall consist of six members, and decisions of the board shall require the approval of a majority of those members present and voting.

(c)  The board shall undertake an ongoing formal review process of law enforcement policies and practices with a goal of developing a comprehensive approach to providing the best services to Vermonters, given monies available.  The board shall also provide educational resources to Vermonters about public safety challenges in the state.

(d)  The board shall meet no fewer than six times a year to develop policies and recommendations for law enforcement priority needs, including retirement benefits, recruitment of officers, training needs, homeland security issues, dispatching, and comprehensive drug enforcement.  The board shall present its findings and recommendations in brief summary to the general assembly and the governor annually by January 15.

Sec. 5.  24 V.S.A. § 4802 is amended to read:

§ 4802.  APPROVAL OF PLAN

(a)  Every agreement for a union municipal district or interlocal contract under this chapter shall be submitted to the attorney general before being presented to the voters for acceptance or rejection.  The attorney general shall determine whether the agreement is in proper form and compatible with the laws of this state.  In the event that the attorney general fails to notify the joint survey committee provided for in subchapter 2 of this chapter of his or her determination within thirty 30 days after receipt of a copy of the agreement or contract it shall be deemed to have been approved.

(b)  In the event that an agreement for a union municipal district or interlocal contract deals in whole or in part with services or facilities over which an officer or agency of the state government has constitutional or statutory powers of control, the agreement or contract shall be submitted to him or her or it, at the time of its submission to the attorney general.  The officer or agency involved may file objections with the attorney general and the central planning office.

(c)  No agreement or contract shall be submitted to the voters unless it has been approved by the attorney general under subsection (a) of this section.

Sec. 6.  24 V.S.A. § 4833 is amended to read:

§ 4833.  OFFICERS

The members of a joint municipal survey committee shall consist of three an equal number of representatives from each municipality designated by the legislative branch.  If there is a local planning commission one of the three members shall be a member of the commission and if the municipality is in an area served by a regional planning commission, a member of that commission, chosen by the commission, shall be an ex officio member of the joint survey committee.  Members of the legislative branch of a municipality may serve as members of the committee.  The committee shall elect from their its own number a chairman chair and secretary and other necessary officers to serve for such period as the members shall decide.

Sec. 7.  24 V.S.A. § 4863 is amended to read:

§ 4863.  APPROVAL OF AGREEMENT

(a)  Any participating municipality may enter into the agreement for the formation of the union municipal district at any annual or special meeting of such municipality duly warned for such purpose.

(b)  At least one public hearing on the proposed agreement shall be held in each municipality.  The last public hearing for such purpose shall be held not less than five, nor more than fifteen days prior to the date of the annual or special meeting to consider the proposed agreement.  Public notice shall be given of the public hearing, by the publication of the date, place and purpose of the hearing in a newspaper of general publication in the municipality and the posting of a notice in one or more public places within the municipality not less than fifteen days prior to the date of the public hearing.  The notice shall make reference to a place within the municipality where copies of the proposed agreement may be examined.

(c)  The vote on the question of accepting the agreement shall be by printed ballot substantially as follows:

(1)  Shall the – (name of municipality) – enter into an agreement for the formation of a union municipal district to be known as “       “. “          .”

(d)(c) The polls shall remain open for at least eight consecutive hours and all All elections in the separate municipalities shall be held on the same day. The vote shall be by Australian ballot as provided for in subchapter 3 of chapter 55 of Title 17.  Early or absentee voting, as provided by sections 121 to 147 of Title 17, shall be permitted.

(e)(d)  Where three or more municipalities are concerned in the voting, and at least two approve the agreement, rejection of the agreement by one or more shall not defeat the creation of a district composed of the municipalities voting affirmatively on the question, if the joint survey committee decides that it is feasible or practical to continue the district as a geographic unit, unless the agreement as proposed expressly provides that specific participating municipalities or a minimum number of participating municipalities shall approve the agreement.  Members from municipalities rejecting the agreement may take no part in the decision of the joint survey committee, or in any subsequent matters relating to the agreement rejected by the municipalities they represent.

(f)(e)  The governing body of the district may authorize the inclusion of additional municipalities outside of the district.  Any authorized municipality may take action to enter into the district according to the approval procedures contained herein.

(g)(f)  A municipality which is a member of a union municipal district may vote to withdraw from the union municipal district if one year has elapsed since said union municipal district has become a body politic and corporate as provided in section 4865 of this title and if the union municipal district has not voted to bond for construction and improvements as provided in section 4866 of this title.

(h)(g)  When a majority of the voters of a member municipality present and voting at a meeting of such municipality duly warned for that purpose shall vote to withdraw from a union municipal district, the vote shall be certified by the clerk of that municipality to the governing body of the union municipal district.  Thereafter, the governing body of the union municipal district shall give notice to the remaining member municipalities of the vote to withdraw and such body shall hold a meeting to determine whether it is in the best interests of the district to continue to exist.  Representatives of the member municipalities shall be given an opportunity to be heard at such meeting together with any other interested persons.  After such meeting, the governing body may declare the district dissolved immediately or as soon thereafter as each member municipality’s financial obligations have been satisfied, or it may declare that the district shall continue to exist despite the withdrawal of the member municipality.

(i)(h)  A vote of withdrawal taken after a union municipal district has become a body politic and corporate but less than one year after that date shall be null and void.  A vote of withdrawal taken after the union municipal district has voted to bond itself for construction and improvements shall likewise be null and void.

(j)(i)  The membership of the withdrawing municipality shall terminate as of one year following the vote to withdraw or as soon after such one year period as the financial obligations of said withdrawing municipality have been paid to the union municipal district.

Sec. 8.  24 V.S.A. § 4864 is added to read:

§ 4864.  EMPLOYEE ORGANIZATIONS; POLICE EMPLOYEES; STATE LABOR RELATIONS BOARD

If an employee organization is the exclusive bargaining representative of employees in one or more participating municipalities in a proposed agreement to create a union municipal district for the purpose of providing services currently provided by these employees, any questions of unit determination or representation involving these employees shall be resolved by the state labor relations board pursuant to chapter 22 of Title 21.

Sec. 9.  24 V.S.A. § 4866 is amended to read:

§ 4866.  POWERS AND DUTIES

A union municipal district may:

(1)  Hire and fix the compensation of employees.

(2)  Contract with consultants and other experts for services.

(3)  Contract with the state of Vermont or the federal government, or any agency or department thereof, for services.

(4)  Contract with any participating municipality for the services of any officers or employees of that municipality useful to it.

(5)  Contract with a county sheriff to provide law enforcement services to the union district.

(6)  Promote cooperative arrangements and coordinated action among its participating municipalities.

(6)(7)  Make recommendations for review and action to its participating municipalities and other public agencies which perform functions within the region in which its participating municipalities are located; and.

(7)(8)  Exercise any other powers which are exercised or are capable of exercise by any of its participating municipalities, and necessary or desirable for dealing with problems of mutual concern.

(8)(9)  Borrow money and issue evidence of indebtedness as provided by chapter 53 of Title 24.  Obligations incurred under such chapter shall be the joint and several obligations of the district and of each member municipality but shall not affect any limitation on indebtedness of a member municipality.  The cost of debt service shall be included in the annual budget of the district, and shall be allocated among the member municipalities as provided in the agreement for the allocation of the assessment for the ordinary expenses of the district.  Where voter approval is required pursuant to chapter 53 of Title 24, the governing body of the district shall determine the number and location of polling places, and when a majority of all the voters present and voting on the question from all of the member municipalities at such meeting vote to authorize the issuance of bonds, the district shall be authorized to issue the bonds as provided in said chapter.  The counting of ballots shall be conducted by the governing board of the district together with the town or city clerk from each member municipality or his or her designee.

Sec. 10.  24 V.S.A. § 4901(a) is amended to read:

(a)  Any one or more municipalities may contract with any one or more other municipalities to perform any governmental service, activity, or undertaking which each municipality entering into the contract is authorized by law to perform, provided that the contract is recommended by a joint survey committee, approved by the attorney general as provided in section 4802 of this title, and authorized by a majority of the voters in each participating municipality at an annual or special meeting duly warned for that purpose legislative body of each municipality approves the contract, and expenses for such governmental service, activity, or undertaking are included in a municipal budget approved under 17 V.S.A. § 2664 or comparable charter provision.

(Committee vote: 5-0-1)

S. 214

An act relating to permitting half-time hearing officers to engage in the active practice of law for remuneration.

Reported favorably with recommendation of amendment by Senator Campbell for the Committee on Judiciary.

The Committee recommends that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  4 V.S.A. § 1104 is amended to read:

§ 1104.  APPOINTMENT OFFICE OF HEARING OFFICERS OFFICER

The administrative judge shall appoint members of the Vermont bar to serve as hearing officers to hear cases.  Hearing officers shall be subject to the Code of Judicial Conduct.  At least one hearing officer shall reside in each territorial unit of the district court.

(a)  The office of hearing officer is created within the judicial bureau to hear cases arising under this chapter. 

(b)  A hearing officer shall be an attorney admitted to practice in Vermont with at least four years of general law practice.  Hearing officers shall be nominated, appointed, and confirmed in the manner of district judges.

(c)  The term of office of a hearing officer shall be six years.  Any appointment to fill a vacancy shall be for the unexpired portion of the term vacated.  A hearing officer may be reappointed by the governor under this section without review by the judicial nominating board, but a reappointment shall require the consent of the senate.

(d)  Hearing officers shall be exempt employees of the judicial branch, subject to the Code of Judicial Conduct, and shall devote full time to their duties.  The supreme court shall prescribe training requirements for hearing officers.

(e)  The administrative judge shall assign the hearing officers among the three district court territorial units and shall establish a rotation schedule, both within and outside the unit to which the hearing officers are regularly assigned.  The rotation schedule shall be on file in the office of the clerk of each district court, and copies shall be furnished upon request.  Only in a case where a hearing officer is disqualified or unable to attend any term of court or part thereof to which he or she has been assigned may the administrative judge assign another hearing officer to preside during that term or part thereof and only for that period during which the assigned hearing officer is disqualified or unable to attend.

Sec. 2.  EFFECTIVE DATE; EFFECT ON EXISTING POSITIONS

(a)  This act shall take effect on July 1, 2004.

(b)  A person holding the position of hearing officer as of the effective date of this act shall be deemed to hold a term of office which expires on September 30, 2004, and may be reappointed by the governor under subsection 1104(c) of Title 4 for a six-year term of office commencing October 1, 2004.

(Committee vote:  6-0-0)

Reported favorably by Senator Sears for the Committee on Appropriations.

(Committee vote: 6-0-1)

S. 288

An act relating to state programs and policies on prescription drugs.

Reported favorably with recommendation of amendment by Senator Leddy for the Committee on Health and Welfare.

The Committee recommends that the bill be amended by striking out all after the enacting clause and inserting in lieu thereof the following:

* * * Retail Drug Price Disclosure * * *

Sec. 1.  33 V.S.A. § 2007 is added to read:

§ 2007.  RETAIL DRUG PRICE DISCLOSURE

With each prescription dispensed, the pharmacist shall disclose to the patient, in writing, the usual and customary retail price of the prescription and the cost of any payment toward the price required of the patient.

Sec. 2.  EFFECTIVE DATE

Sec. 1 of this act shall take effect July 1, 2004 and apply to a pharmacy on the date thereafter on which the pharmacy updates its computer software program with regard to prescription drug price and patient payment, but in no event later than January 1, 2006.

* * * Over-the-Counter Drug Coverage * * *

Sec. 3.  33 V.S.A. § 1992a is added to read:

§ 1992a.  OVER-THE-COUNTER DRUG COVERAGE

All public pharmaceutical assistance programs shall provide coverage for over-the-counter drugs on the preferred drug list developed under section 1998 of this title.

* * * PBM Licensing * * *

Sec. 4.  18 V.S.A. chapter 221, subchapter 9 is added to read:

Subchapter 9.  Pharmacy Benefit Managers

§ 9471.  DEFINITIONS

As used in this subchapter:

(1)  “Beneficiary” means an individual who has been enrolled in a health insurance plan in which coverage of prescription drugs is administered by a pharmacy benefit manager.

(2)  “Commissioner” means the commissioner of banking, insurance, securities, and health care administration.

(3)  “Health insurance plan” means a health benefit plan offered, administered, or issued by a health insurer doing business in Vermont.

(4)  “Health insurer” is defined by subdivision 9402(7) of this title.  The term includes:

(A)  The state of Vermont and any agent or instrumentality of the state that offers, administers, or provides financial support to state government employees.

(B)  Medicaid, the Vermont health access plan, the VScript pharmaceutical assistance program, and any other public health care assistance program.

(C)  To the extent permitted by federal law, any self-insured health benefit plan that offers health care coverage to Vermont beneficiaries.

(5)  “Pharmacy benefit management plan” means an arrangement for the delivery of prescription services in which a pharmacy benefit manager undertakes to provide, arrange for, pay for, or reimburse any of the costs of prescription services for a beneficiary.

(6)  “Pharmacy benefits manager” means a business that administers the prescription drug or device portion of health insurance plans through a pharmacy benefit management plan on behalf of a health insurance plan.

§ 9472.  PHARMACY BENEFIT MANAGER; LICENSE REQUIRED

(a)  No person shall act as a pharmacy benefit manager or administer a pharmacy benefit management plan in this state without obtaining an annual license from the commissioner.

(b)  The commissioner may suspend or revoke any license issued to a pharmacy benefit manager under this subchapter or deny an application for a license if the commissioner finds that the pharmacy benefit manager or any officer, employee, or agent of the pharmacy benefit manager has failed to satisfy any of the following requirements.  A pharmacy benefit manager shall:

(1)  Fulfill its fiduciary obligations to health insurance plans and health insurance plan beneficiaries in accordance with the provisions of section 9473 of this title.

(2)  File an annual disclosure statement and secure prior approval of contracts in accordance with the provisions of section 9474 of this title.

(3)  Pay all fees, taxes, and charges required by law.

(4)  File a financial statement or statements and any reports, certificates, or other documents the commissioner considers necessary to secure a full and accurate knowledge of its affairs and financial condition.

(5)  Remain solvent, and its financial condition, method of operation, and manner of doing business shall remain such as to satisfy the commissioner that it can meet its obligations to health insurance plans and all beneficiaries.

(6)  Comply with all the requirements of law, the provisions of this subchapter, and the rules adopted pursuant to this subchapter.

(c)  A nonrefundable license application fee of $500.00 shall accompany each application for a license to transact business in this state.  The fee shall be collected by the commissioner and paid directly into the pharmacy benefit management regulation special fund established and administered under subchapter 5 of chapter 7 of Title 32 for the purpose of defraying expenses for the regulation, supervision, and examination of all entities subject to regulation under this subchapter.

(d)  The license required by this section shall be signed by the commissioner or a duly authorized agent of the commissioner and shall expire on the next June 30 after the date on which it becomes effective.

(e)  All pharmacy benefit managers offering or providing pharmacy benefit management plans shall obtain an annual renewal of their license from the commissioner.  The commissioner may refuse to renew the license of any pharmacy benefit manager or may renew the license, subject to any conditions or restrictions deemed by the commissioner to be needed to carry out the purposes of this subchapter, if the commissioner finds that the pharmacy benefit manager has violated any of the requirements for licensure established in subsection (b) of this section.  The commissioner shall not fail to renew the license of any pharmacy benefit manager without giving the pharmacy benefit manager notice and an opportunity to be heard in accordance with the provisions of 3 V.S.A. chapter 25 (Administrative Procedure Act).

(f)  The commissioner may adopt such rules as are necessary to carry out the purposes of this subchapter.

§ 9473.  FIDUCIARY OBLIGATIONS OF PHARMACY BENEFIT MANAGERS

A pharmacy benefit manager shall at all times discharge its obligations to health insurance plans and health insurance plan beneficiaries in compliance with the standards of conduct applicable to a “fiduciary” under the Employee Retirement Income Security Act of 1974.  In so doing, a pharmacy benefit manager shall:

(1)  Discharge its duties with respect to health insurance plans and health insurance plan beneficiaries solely in the interest of such plans and beneficiaries, and for the exclusive purpose of providing benefits to such plans and beneficiaries and defraying reasonable expenses of administering health insurance plan and health insurance plan beneficiary benefits. 

(2)  Discharge its duties with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent fiduciary acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

(3)  Discharge its duties in accordance with the contract governing the health insurance plan prescription drug coverage, insofar as such contract is consistent with the provisions of this law and of the Employee Retirement Income Security Act of 1974.

(4)  Provide any and all information requested by health insurance plans so as to ensure that such plans are able to ascertain all material activities being undertaken on their behalf or on behalf of health insurance plan beneficiaries.

(5)  Notify health insurance plans in writing of any proposed or ongoing activity that involves, directly or indirectly, any conflict of interest as contemplated by the standards applicable to a “fiduciary” under the Employee Retirement Income Security Act of 1974.

§ 9474.  ANNUAL STATEMENT; PRIOR APPROVAL OF CONTRACTS

(a)  Each pharmacy benefit manager providing pharmacy benefit management plans in this state shall file a statement with each health insurance plan and with the commissioner annually by March 1.  The statement shall be verified by at least two principal officers and shall cover the preceding calendar year.  The annual statement shall be on forms prescribed by the commissioner, and shall include:

(1)  A financial statement of the organization, including its balance sheet and income statement for the preceding year.

(2)  The number of persons enrolled during the year, the number of enrollees as of the end of the year, and the number of enrollments terminated during the year.

(3)  Any other information relating to the operations of the pharmacy benefit manager required by the commissioner pursuant to this subchapter.

(b)  A pharmacy benefit manager shall not enter into a contract with a health insurance plan unless the commissioner first determines, upon application by  the pharmacy benefit manager on a form and in a manner approved by the commissioner, that the pharmacy benefit manager has disclosed to the health insurance plan any of the following agreements and practices, and that the commissioner has determined that the contract and any such agreement and practice promotes the medical and financial interests of the health insurance plan and the beneficiaries of the health insurance plan.  The pharmacy benefit manager shall disclose:

(1)  Any agreement with a pharmaceutical manufacturer to favor the manufacturer’s products over a competitor’s products, or to place the manufacturer’s drug on the pharmacy benefit manager’s preferred list or formulary, or to switch the drug prescribed by the patient’s health care provider with a drug agreed to by the pharmacy benefit manager and the manufacturer.

(2)  Any agreement with a pharmaceutical manufacturer to share manufacturer rebates and discounts with the pharmacy benefit manager, or to pay “soft money” or other economic benefits to the pharmacy benefit manager.

(3)  Any agreement or practice to bill Vermont health benefit plans for prescription drugs at a cost higher than the pharmacy benefit manager pays the pharmacy.

(4)  Any agreement to share revenue with a mail order or internet pharmacy company.

(5)  Any agreement to sell prescription drug data concerning Vermont beneficiaries, or data concerning the prescribing practices of the health care providers of Vermont beneficiaries.

(6)  Any corporate or other organizational or governing affiliation between the pharmacy benefit manager and a pharmaceutical manufacturer.

(7)  Any other agreement of the pharmacy benefit manager with a pharmaceutical manufacturer, or with wholesale and retail pharmacies, affecting the cost of pharmacy benefits provided to Vermont beneficiaries.

(c)  A contract filed under this section shall be deemed approved unless the commissioner disapproves such contract within 30 days after filing with the commissioner.  Disapproval shall be in writing, stating the reasons thereforeand a copy thereof delivered to the pharmacy benefit manager.

§ 9475.  ASSESSMENT

(a)  The expenses of administering this subchapter, including the cost incurred by the commissioner, shall be assessed annually by the commissioner against all pharmacy benefit managers operating in this state.  Before determining the assessment, the commissioner shall provide an estimate of all expenses for the regulation, supervision, and examination of all entities subject to regulation under this chapter.  The assessment shall be in proportion to the business done in this state.

(b)  All fees and assessments under this subchapter and paid to the commissioner shall be deposited in the pharmacy benefit management regulation special fund established and administered under subchapter 5 of chapter 7 of Title 32 for the purpose of defraying the expenses for the regulation, supervision, and examination of all entities subject to regulation under this subchapter.

(c)  The commissioner shall give each pharmacy benefit manager notice of the assessment, which shall be paid to the department annually on or before March 1.  Any pharmacy benefit manager that fails to pay the assessment on or before the date prescribed in this subsection shall be subject to a penalty imposed by the commissioner.  The penalty shall be ten percent of the assessment and interest for the period between the due date and the date of full payment.  If a payment is made in an amount later found to be in error, the commissioner shall:

(1)  If an additional amount is due, notify the company of the additional amount and the company shall pay the additional amount within 14 days of the date of the notice.

(2)  If an overpayment is made, order a refund.

(d)  If an assessment made under this subchapter is not paid to the commissioner by the prescribed date, the amount of the assessment, penalty, and interest may be recovered from the defaulting company on motion of the commissioner made in the name and for the use of the state in the appropriate superior court after ten days’ notice to the company.  The license of any defaulting pharmacy benefit manager to transact business in this state may be revoked or suspended by the commissioner until the manager has paid such assessment.

§ 9476.  ENFORCEMENT

In addition to any other remedy provided by law, a health insurance plan or a plan beneficiary aggrieved by a violation of this subchapter or a rule adopted under this subchapter may file an action in superior court for injunctive relief and an award of compensatory and punitive damages.  The superior court may award to the health insurance plan or plan beneficiary who prevails in an action under this section reasonable costs and attorney’s fees.

* * * Joint Purchasing within Vermont; OTC; Counterdetailing * * *

Sec. 5.  33 V.S.A. § 1998 is amended to read:

§ 1998.  PHARMACY BEST PRACTICES AND COST CONTROL PROGRAM ESTABLISHED

(a)  The commissioner of prevention, assistance, transition, and health access shall establish a pharmacy best practices and cost control program designed to reduce the cost of providing prescription drugs, while maintaining high quality in prescription drug therapies.  The program shall include:

(1)  A preferred list of covered prescription drugs that identifies preferred choices within therapeutic classes for particular diseases and conditions, including generic alternatives and over-the-counter drugs.

(A)  The commissioner, and the commissioner of banking, insurance, securities, and health care administration shall implement the preferred drug list as a uniform, statewide preferred drug list by encouraging all health benefit plans in this state to participate in the program.

(B)  The commissioner of personnel shall use the preferred drug list in the state employees health benefit plan only if participation in the program will provide economic and health benefits to the state employees health benefit plan and to beneficiaries of the plan, and only if agreed to through the bargaining process between the state of Vermont and the authorized representatives of the employees of the state of Vermont.  The provisions of this subdivision do not authorize the actuarial pooling of the state employees health benefit plan with any other health benefit plan, unless otherwise agreed to through the bargaining process between the state of Vermont and the authorized representatives of the employees of the state of Vermont.  No later than November 1, 2004, the commissioner of personnel shall report to the health access oversight committee and the senate and house committees on health and welfare on whether use of the preferred drug list in the state employees health benefit plan would, in his or her opinion, provide economic and health benefits to the state employees health benefit plan and to beneficiaries of the plan.

* * *

(4)  Education programs, including With input from physicians, pharmacists, private insurers, hospitals, pharmacy benefit managers, and the drug utilization review board, a counterdetailing education program, designed to provide information and education on the therapeutic and cost-effective utilization of prescription drugs to physicians, pharmacists and other health care professionals authorized to prescribe and dispense prescription drugs.  Details of the program, including the scope of the program and funding recommendations, shall be contained in a report submitted to the health access oversight committee and the senate and house committees on health and welfare no later than December 31, 2004;

* * *

* * * Expanding Use of 340B Programs * * *

Sec. 6.  33 V.S.A. § 2008 is added to read:

§ 2008.  FEDERAL DISCOUNT PROGRAMS; STUDY

The commissioner shall study and by January 1, 2005 report to the governor, the senate and house committees on health and welfare, and the health access oversight committee on the feasibility of providing discounted prescription drugs to Vermont’s most vulnerable patient populations through the use of Section 340B of the federal Public Health Service Act, 42 United States Code § 256b (1999).  The commissioner shall work with other state agencies, representatives of state employees, and representatives of health care providers and facilities in the state to provide the following information:

(1)  A description of all health care providers and facilities in the state potentially eligible for designation as “covered entities” under Section 340B, including without limitation all hospitals eligible as disproportionate share hospitals; recipients of grants from the United States Public Health Service; federally qualified health centers; federally qualified look-alikes; state‑operated AIDS drug assistance programs; Ryan White CARE Act Title I, Title II, and Title III programs; tuberculosis, black lung, family planning, and sexually transmitted disease clinics; hemophilia treatment centers; public housing primary care clinics; and clinics for homeless people.

(2)  A listing of potential applications of Section 340B and the potential benefits to public, private, and third-party payors for prescription drugs, including:

(A)  application to inmates and employees in youth correctional facilities, county jails, and state prisons;

(B)  maximizing the use of Section 340B within state-funded managed care plans;

(C)  the inclusion of Section 340B providers in state bulk purchasing initiatives; and

(D)  using sole source contracts with Section 340B providers to furnish high-cost chronic care drugs.

(3)  Discounts available through Section 340B contracts, including estimated cost savings to the state as a result of retail mark-up avoidance, negotiated subceiling prices, and coordination with the Medicaid program in order to minimize costs to the program and to other purchasers of prescription drugs.

(4)  The resources available to potential applicants for designation as covered entities for the application process, establishing a Section 340B program, restructuring the health care system, or other methods of lowering the cost of prescription drugs.  The resources must include state and federal agencies and private philanthropic grants to be used for the purposes of this section.

* * * Study on Savings * * *

Sec. 7.  REPORT ON PRESCRIPTION DRUG SAVINGS

The commissioner of prevention, assistance, transition, and health access shall conduct a study to demonstrate any savings achieved through the use of generic as an alternative to brand-name drugs in the state and, to the extent possible, private drug assistance plans.  The findings of the study shall be reported to the health access oversight committee and the senate and house committees on health and welfare by January 1, 2005.

* * * Auditing PBM Contracts * * *

Sec. 8.  AUDITING PBM CONTRACTS

The commissioner of prevention, assistance, transition, and health access and the commissioner of personnel, in consultation with the commissioner of banking, insurance, securities, and health care administration and the state auditor, shall develop a pharmacy benefits manager audit.  The purpose of the audit plan is to ensure that pharmacy claims and rebates are being paid accurately and appropriately.  Accordingly, the audit shall include a performance audit, contract compliance audit, rebate audit, and pharmacy claims analysis and audit.  The audit plan shall include a cost estimate for hiring an independent auditor, options for keeping the cost of the audit down, for example, by partnering with other health benefit plans within or outside the state, as well as recommendations regarding possible revenue sources to cover the cost of implementing the audit plan.  The audit plan shall be detailed in a report submitted to the health access oversight committee and the senate and house committees on health and welfare by September 1, 2004.

* * * Mental Health Drugs * * *

Sec. 9.  SUNSET REPEAL

The sunset provision, Sec. 5 of No. 127 of the Acts of the 2001 Adj. Sess. (2002) (repealing the law exempting certain mental health drugs from the prior authorization process), is hereby repealed.

* * * Medicare Drug Benefit:  Donut Hole, Impact on Vermont, and

Coordination with State Programs * * *

Sec. 10.  PRESCRIPTION DRUG COVERAGE FOR MEDICARE BENEFICIARIES

(a)  The department of prevention, assistance, transition, and health access shall amend Vermont prescription drug programs to conform with the provisions of the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003, P.L. 108-173, and, to the extent permissible under federal law, provide financial assistance to Medicare beneficiaries who otherwise would be required to pay 100 percent of the cost of drugs after the initial deductible.

(b)  The department of prevention, assistance, transition, and health access shall analyze the financial impact on the state of Vermont caused by implementation of the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003, P.L. 108-173, and report its findings annually to the health access oversight committee and the senate and house health and welfare committees beginning November 1, 2004.

Sec. 11.  PRESCRIPTION DRUG BENEFIT WORKING GROUP

The commissioner of aging and disabilities with representatives from the department of prevention, assistance, transition, and health access shall convene a working group of elderly and disabled consumers, advocates, and providers to:

(1)  develop and implement a plan which at a minimum shall include outreach, education, and assistance to minimize confusion and duplication of coverage expected to be caused by the introduction of the new, federally mandated Medicare discount cards to Vermont Medicare beneficiaries, especially those who also are eligible for Medicaid, VHAP-Rx, VScript, VScript Expanded, or Healthy Vermonters; and

(2)  plan for the implementation of Medicare Part D in the state beginning January 1, 2006.  Such planning shall include both monitoring and advocacy on federal policy as it relates to Vermont state pharmaceutical assistance programs with a goal of minimizing any reduction of assistance to these beneficiaries.  The plan shall analyze fully the potential gains and losses to Vermont and to its state pharmaceutical assistance beneficiaries resulting from Medicare Part D and the balance of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, P.L. 108-173, and shall provide ongoing cost projections and identify sources of funding for holding these beneficiaries harmless from pharmacy benefit cuts once Medicare Part D is implemented.

* * * Prior Authorization Exemption * * *

Sec. 12.  33 V.S.A. § 1999(f) is amended to read:

(f)  The program’s prior authorization process shall require that the prescriber, not the pharmacy, request a prior authorization exception exemption to the requirements of this section.  The No later than December 31, 2004, the commissioner shall create a pilot program may designed to exempt a prescriber from the need to secure prior authorization for a specific drug category if the program determines that the prescriber has written a minimum number of scripts in that category, and the prescriber prescribes prescription drugs on the preferred drug list at or above the minimum threshold for that category, as determined by the commissioner after consultation with the drug utilization review board.

* * *  Reimportation  * * *

Sec. 13.  8 V.S.A. § 4089i is added to read:

§ 4089i.  PRESCRIPTION DRUG COVERAGE

A health insurance or other health benefit plan offered by a health insurer shall provide coverage for prescription drugs purchased outside this country on the same terms and conditions as prescription drugs purchased in this country.  The plan may require certification by the North American Pharmatherapeutic Consultants Association for the purpose of safeguarding the quality of prescription drugs purchased by plan beneficiaries.

Sec. 14.  33 V.S.A. § 2007 is added to read:

§ 2007.  CANADIAN PRESCRIPTION DRUG INFORMATION PROGRAM

(a)  The department of prevention, assistance, transition, and health access shall establish a program to describe how Vermont residents are able to purchase prescription drugs from Canada.  This program shall provide information about ordering prescription drugs through the mail or otherwise from a participating Canadian pharmacy.

(b)  The department shall establish a website and written information regarding the program.

Sec. 15.  APPLICABILITY; STATUTORY REVISION

The statutory revision commission is directed to recodify 8 V.S.A. §§ 4089i and 4089j (health care ombudsman) as 8 V.S.A. §§ 4089v and 4089w, respectively.

* * * Healthy Vermonters Expansion * * *

Sec. 16.  33 V.S.A. § 2003 is amended to read:

§ 2003.  PHARMACY DISCOUNT PLAN

(a)  On or before July 1, 2002, the The commissioner shall implement a pharmacy discount plan, to be known as the “Healthy Vermonters” program, for Vermonters without adequate coverage for prescription drugs.  The provisions of section 1992 of this title shall apply to the commissioner’s authority to administer the pharmacy discount plan established by this section.  The commissioner may establish an enrollment fee in such amount as is necessary to support the administrative costs of the plan.

(b)  The pharmacy discount plan authorized by this section shall include a program implemented as a Section 1115 Medicaid waiver, wherein the state makes a payment toward the cost of the drugs dispensed to individuals enrolled in this program of at least two percent of the cost of each prescription or refill, consistent with the appropriation for the program established by this section offer enrolled individuals an initial discounted cost for covered drugs and, upon approval by the Centers for Medicare and Medicaid Services of a Section 1115 Medicaid waiver program, a secondary discounted cost, which shall reflect a state payment toward the cost of each dispensed drug as well as any rebate amount negotiated by the commissioner.  Upon implementation of the waiver program, the commissioner may establish an enrollment fee in such amount as is necessary to support the administrative costs of the program.

(c)  The commissioner shall implement the pharmacy discount program authorized by this section without any financial contribution by the state otherwise required by subsection (b) of this section, and without federal waiver approval during such time as federal waiver approval has not been secured.

(d)  As used in this section:

(1)  “Eligible beneficiary” means any individual Vermont resident without adequate coverage:

(A)  who is at least 65 years of age, or is disabled and is eligible for Medicare or Social Security disability benefits, with household income equal to or less than 400 percent of the federal poverty level, as calculated under the rules of the Vermont health access plan, as amended, and any other individual Vermont resident with;

(B)  whose household income is equal to or less than 300 350 percent of the federal poverty level, as calculated under the rules of the Vermont health access plan, as amended; and

(C)  whose family incurs unreimbursed expenses for prescription drugs, including insurance premiums, that equal five percent or more of household income or whose total unreimbursed medical expenses, including insurance premiums, equal 15 percent or more of household income.

(2)  “Initial discounted cost” means the price of the drug based on the Medicaid fee schedule.

(3)  “Labeler” means an entity or person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and that has a labeler code from the federal Food and Drug Administration under 21 Code of Federal Regulations, 207.20 (1999).

(4)  “Participating retail pharmacy” means a retail pharmacy located in this state or another business licensed to dispense prescription drugs in this state that participates in the program according to rules established by the department and provides discounted prices to eligible beneficiaries of the program.

(5)  “Rebate amount” means the rebate negotiated by the commissioner and required from a drug manufacturer or labeler under this section.  In determining the appropriate rebate, the commissioner shall:

(A)  take into consideration the rebate calculated under the Medicaid Rebate Program under section 1396r-8 of Title 42 of the United States Code, the average wholesale price of prescription drugs, and any other information on prescription drug prices and price discounts;

(B)  use his or her best efforts to obtain an initial rebate amount equal to or greater than the rebate calculated under the Medicaid program under section 1396r-8 of Title 42 of the United States Code;

(C)  use his or her best efforts to obtain an amount equal to or greater than the amount of any discount, rebate, or price reduction for prescription drugs provided to the federal government.

(6)  “Secondary discounted cost” means the price of the drug based on the Medicaid fee schedule, less payment by the state of at least two percent of the Medicaid rate, less any rebate amount negotiated by the commissioner and paid for out of the healthy Vermonters dedicated fund established under subsection 2003(j).

(7)  “Vermonter without Without adequate coverage” includes eligible beneficiaries with no coverage for prescription drugs or for certain types of prescription drugs, and eligible beneficiaries whose annual maximum coverage limit under their health benefit plan has been reached.

(e)  Drugs covered by the Healthy Vermonters program shall include all drugs covered under the Medicaid program.

(f)  Participating retail pharmacies shall offer beneficiaries the initial discounted price beginning July 1, 2004.  Beginning October 1, 2005, a participating retail pharmacy shall offer beneficiaries the secondary discounted price, if available.

(g)  The Vermont board of pharmacy shall adopt rules requiring disclosure by participating retail pharmacies to eligible beneficiaries of the amount of savings provided as a result of the program.  The rules must consider and protect information that is proprietary in nature.  The department may not impose transaction charges under this program on pharmacies that submit claims or receive payments under the program.  Pharmacies shall submit claims to the department to verify the amount charged to eligible beneficiaries under the program.  On a weekly or biweekly basis, the department must reimburse pharmacies for the difference between the initial discounted price and the secondary discounted price provided to eligible beneficiaries.

(h)  The names of drug manufacturers and labelers who do and do not enter into rebate agreements under this program are public information.  The department shall release this information to health care providers and the public on a regular basis and shall publicize participation by manufacturers and labelers.  The department shall impose prior authorization requirements in the Medicaid program, as permitted by law, to the extent the department determines it is appropriate to do so in order to encourage manufacturer and labeler participation in the program and so long as the additional prior authorization requirements remain consistent with the goals of the Medicaid program and the requirements of Title XIX of the federal Social Security Act.

(i)  The commissioner shall establish, by rule, a process to resolve discrepancies in rebate amounts claimed by manufacturers, labelers, pharmacies, and the department.

(j)  The healthy Vermonters dedicated fund is established to receive revenue from manufacturers and labelers who pay rebates as provided in subdivision (d)(5) of this section and any appropriations or allocations designated for the fund.  The purposes of the fund are to reimburse retail pharmacies for discounted prices provided to individuals enrolled in the healthy Vermonters program; and to reimburse the department for contracted services including pharmacy claims processing fees, administrative and associated computer costs, and other reasonable program costs.  The fund is a nonlapsing dedicated fund.  Interest on fund balances accrues to the fund.  Surplus funds in the fund must be used for the benefit of the program.

(k)  Annually, the department shall report the enrollment and financial status of the program to the health access oversight committee by September 1, and to the general assembly by January 1.

(l)  The department shall undertake outreach efforts to build public awareness of the program and maximize enrollment.  Outreach efforts shall include steps to educate retail pharmacists on the purposes of the healthy Vermonters dedicated fund, in particular as it relates to pharmacy reimbursements for discounted prices provided to program enrollees.  The department may adjust the requirements and terms of the program to accommodate any new federally funded prescription drug programs. 

(m)  The department may contract with a third party or third parties to administer any or all components of the program, including outreach, eligibility, claims, administration, and rebate recovery and redistribution.

(n)  The department shall administer the program and other medical and pharmaceutical assistance programs under this title in a manner advantageous to the programs and enrollees.  In implementing this section, the department may coordinate the other programs and this program and may take actions to enhance efficiency, reduce the cost of prescription drugs, and maximize benefits to the programs and enrollees, including providing the benefits of this program to enrollees in other programs.

(o)  The department may adopt rules to implement the provisions of this section.

(p)  The department may seek any waivers of federal law, rule, or regulation necessary to implement the provisions of this section.

Sec. 17.  EFFECTIVE DATE

This act shall take effect July 1, 2004, except that subsection 2003(h) of Title 33, requiring public disclosure of manufacturers and labelers entering into rebate agreements and certain prior authorization requirements under Medicaid, shall take effect when the waiver program authorized under subsection 2003(b) takes effect.

(Committee vote: 6-0-0)

Reported favorably with recommendation of amendment by Senator Cummings for the Committee on Finance.

The Committee recommends that the bill be amended as recommended by the Committee on Health and Welfare with the following amendments thereto:

First:  By striking out Secs. 1 and 2 in their entirety and inserting in lieu thereof the following:

* * * Prescription Drug Price Disclosure * * *

Sec. 1.  18 V.S.A. § 9410a is added to read:

§ 9410a.  PRESCRIPTION DRUG PRICE DISCLOSURE

(a)  The commissioner’s health care information system established and maintained under section 9410 of this title shall include a mechanism to make available to consumers such prescription drug price information as the commissioner determines is necessary or desirable, consistent with the provisions of this section, to empower an individual to make economically sound and appropriate prescription drug purchasing decisions.

(b)  The commissioner shall require pharmacy benefit managers or health insurers to disclose prescription drug prices to consumers and health care providers.  The commissioner shall require such disclosure through internet publication, a toll-free number, or any other cost-effective method.  Disclosure shall include the cost to the consumer if purchased before the consumer’s deductible amount is reached, and any applicable coinsurance or co-payments.  Disclosure may include the price per pill, the price per course of therapy, the relationship between the average wholesale price (AWP) of a specific drug and other drugs within the same therapeutic class, and any other relevant information.  The commissioner shall require a retail pharmacy to disclose the retail price of prescription drugs to consumers not covered by an insured or self-insured health benefit plan, upon the request of the consumer.

(c)  The commissioner may adopt such rules as are necessary or desirable to carry out the purposes of this section and, as appropriate, ensure the confidentiality of proprietary information.  The commissioner shall file such rules with the legislative committee on administrative rules within one year of the effective date of this section.  In adopting such rules, the commissioner shall consider the consumer’s need for the prescription drug price disclosure information, the cost of the collection and publication of the information, and any other relevant consideration.

(d)  The department’s reasonable expenses in adopting and administering the prescription drug price disclosure mechanism established by this section may be charged to pharmacy benefit managers doing business in Vermont in the manner provided for in section 18 of Title 8.  Such expenses shall be allocated in proportion to the lives of Vermonters covered by each pharmacy benefit manager as reported annually to the commissioner in a manner and form prescribed by the commissioner.

(e)(1)  The commissioner may enforce the provisions of this section as to pharmacy benefit managers in the same manner as health insurers pursuant to subsection 9412 of this title.  The powers of the commissioner under this section shall be in addition to any other powers of the commissioner under this title or Title 8.

(2)  In addition to any other remedy provided by law, the attorney general may file an action in superior court for a violation of this section or rules adopted under this section, provided that the commissioner’s determinations concerning the interpretation and administration of the provisions of this section and any rules adopted under this section carry the presumption of validity accorded under the law.  The action of the attorney general is subject to the provisions of this section and the consumer fraud provisions of chapter 63 of Title 9.  Each violation of this section constitutes an unfair practice under section 2453 of Title 9 and is a civil violation for which the attorney general may obtain the relief allowed under chapter 63 of Title 9.

(f)  As used in this section:

(1)  “Average wholesale price” or “AWP” means the wholesale price charged on a specific commodity that is assigned by the drug manufacturer and listed in a nationally recognized drug pricing file.

(2)  “Health insurer” is defined by subdivision 9402(9) of this title.  As used in this section, the term includes Medicaid, the Vermont health access plan, the VScript pharmaceutical assistance program, and any other public health care assistance program.

(3)  “Pharmacy benefit manager” is defined by subdivision 9471(5) of this title.

Sec. 2.  18 V.S.A. § 9410b is added to read:

§ 9410b.  PHARMACEUTICAL MARKETER DISCLOSURE

(a)  The commissioner’s health care information system established and maintained under section 9410 of this title shall include a requirement that when a pharmaceutical marketer engages in any form of prescription drug marketing directly to a physician or other person authorized to prescribe prescription drugs, he or she shall disclose to the physician or other prescriber the average wholesale price (AWP) of the drugs being marketed, in accordance with rules adopted by the commissioner.  Disclosure to the prescriber shall be in such a format as to be easily distributed to and understood by patients.  Disclosure shall include the AWP per pill, when relevant, and may include the relationship between the AWP of the specific drug being marketed and other drugs within the same therapeutic class, the price per course of therapy, and any other relevant information.

(b)  The commissioner may adopt such rules as are necessary or desirable to carry out the purposes of this section.  In adopting such rules, the commissioner shall consider the prescriber’s and the consumer’s need for information, the cost of the collection and disclosure of the information, and any other relevant consideration.

(c)  The department’s reasonable expenses in adopting and administering the provisions of this section may be charged to pharmaceutical manufacturing companies doing business in Vermont in the manner provided for in section 18 of Title 8.  Such expenses shall be allocated in proportion to the lives of Vermonters covered by each pharmacy benefit manager as reported annually to the commissioner in a manner and form prescribed by the commissioner.

(d)(1)  The commissioner may enforce the provisions of this section as to pharmaceutical marketers and pharmaceutical manufacturing companies in the same manner as health insurers pursuant to subsection 9412 of this title.

(2)  In additional to any other remedy provided by law, the attorney general may file an action in superior court for a violation of this section or rules adopted under this section, provided that the commissioner’ s determinations concerning the interpretation and administration of the provisions of this section and any rules adopted under this section shall carry the presumption of validity accorded under the law.  The action of the attorney general is subject to the provisions of this section and the consumer fraud provisions of chapter 63 of Title 9.  Each violation of this section constitutes an unfair practice under section 2453 of Title 9 and is a civil violation for which the attorney general may obtain the relief allowed under chapter 63 of Title 9.

(e)  As used in this section:

(1)  “Average wholesale price” or “AWP” is defined in subdivision 9410a(f)(1) of this title.

(2)  “Pharmaceutical manufacturing company” is defined by subdivision 2005(c)(2) of Title 33.

(3)  “Pharmaceutical marketer” is defined by subdivision 2005(c)(1) of Title 33.

Second:  By striking out Sec. 4 in its entirety and inserting in lieu thereof the following:

* * * PBM Regulation * * *

Sec. 4.  18 V.S.A. chapter 221, subchapter 9 is added to read:

Subchapter 9.  Pharmacy Benefit Managers

§ 9471.  DEFINITIONS

As used in this subchapter:

(1)  “Beneficiary” means an individual who has been enrolled in a health insurance plan in which coverage of prescription drugs is administered by a pharmacy benefit manager, and includes his or her dependent or other person provided health coverage through that health insurance plan.

(2)  “Health insurance plan” means a health benefit plan offered, administered, or issued by a health insurer doing business in Vermont.

(3)  “Health insurer” is defined by subdivision 9402(9) of this title.  As used in this section, the term includes the state of Vermont and any agent or instrumentality of the state that offers, administers, or provides financial support to state government.  It does not include Medicaid, the Vermont health access plan, the VScript pharmaceutical assistance program, and any other public health care assistance program.

(4)  “Pharmacy benefit management” means an arrangement for the procurement of prescription drugs at a negotiated rate for dispensation within this state to beneficiaries, the administration or management of prescription drug benefits provided by a health insurance plan for the benefit of beneficiaries, or any of the following services provided with regard to the administration of pharmacy benefits:

(A)  mail service pharmacy;

(B)  claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to beneficiaries;

(C)  clinical formulary development and management services;

(D)  rebate contracting and administration;

(E)  certain patient compliance, therapeutic intervention, and generic substitution programs; and

(F)  disease management programs.

(5)  “Pharmacy benefit manager” means an entity that performs pharmacy benefit management.  The term includes a person or entity acting for a pharmacy benefit manager in a contractual or employment relationship in the performance of pharmacy benefit management for a health insurance plan.

§ 9472.  PHARMACY BENEFIT MANAGERS; REQUIREMENTS

(a)  A pharmacy benefit manager registered under section 9420 of this title that provides pharmacy benefit management for a health insurance plan shall:

(1)  Discharge its duties with respect to a health insurance plan primarily in the interest of the plan and for the primary purpose of providing benefits to the plan and defraying reasonable expenses of administering health insurance plan benefits.

(2)  Discharge its duties with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent pharmacy benefit manager acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

(3)  Provide any and all utilization information requested by a health insurance plan relating to the provision of benefits to beneficiaries through that health insurance plan and utilization information relating to services to that health insurance plan.  A pharmacy benefit manager providing information under this subsection may designate that material as confidential.  Information designated as confidential by a pharmacy benefit manager and provided to a health insurance plan under this subsection may not be disclosed by the health insurance plan to any person without the consent of the pharmacy benefit manager, except that disclosure may be made in a court filing under the consumer fraud provisions of chapter 63 of Title 9 or when authorized by that chapter or ordered by a court for good cause shown.

(4)  Notify a health insurance plan in writing of any proposed or ongoing activity, policy, or practice of the pharmacy benefit manager that presents, directly or indirectly, any conflict of interest with the requirements of this section.

(5)  With regard to the dispensation of a substitute prescription drug for a prescribed drug to a beneficiary the following provisions apply:

(A)  The pharmacy benefit manager may substitute a lower-priced generic and therapeutically equivalent drug for a higher-priced prescribed drug.

(B)  With regard to substitutions in which the substitute drug costs more than the prescribed drug, the substitution must be in accordance with Rule 10, the quality assurance standards and consumer protections for managed care plans adopted by the department of banking, insurance, securities, and health care administration.

(6)  A pharmacy benefit manager shall disclose to the health insurance plan all financial terms and arrangements for remuneration of any kind that apply between the pharmacy benefit manager and any prescription drug manufacturer, including formulary management and drug-switch programs, educational support, claims processing, pharmacy network fees charged from retail pharmacies and data sales fees, and any other information required to be disclosed under section 9420 of this title.

(b)  Compliance with the requirements of this section is required in all contracts for pharmacy benefit management entered into in this state or by a health insurance plan in this state after July 1, 2004.

§ 9473.  ENFORCEMENT

(a)  In addition to any other remedy provided by law, a health insurance plan aggrieved by a violation of this subchapter or a rule adopted under this subchapter may file an action in superior court for injunctive relief and an award of compensatory and punitive damages.  The superior court may award to the health insurance plan who prevails in an action under this section reasonable costs and attorney’s fees.

(b)  An action by the attorney general under this section is subject to the provisions of this subsection and the consumer fraud provisions of chapter 63 of Title 9.  Each violation of this subchapter constitutes an unfair practice under section 2453 of Title 9 and is a civil violation for which the attorney general may obtain, in addition to other remedies, injunctive relief and a fine in an amount not to exceed $10,000.00 per violation, plus the costs of suit, including necessary and reasonable investigative costs, reasonable expert fees, and reasonable attorney’s fees.

Third:  By adding a new section to read as follows:

Sec. 4a.  18 V.S.A. § 9420 is added to read:

§ 9420.  PHARMACY BENEFIT MANAGEMENT; REGISTRATION; AUDIT

(a)  A pharmacy benefit manager shall not do business in this state without first registering with the commissioner on a form and in a manner prescribed by the commissioner.

(b)  In accordance with rules adopted by the commissioner, pharmacy benefit managers operating in the state of Vermont and proposing to contract for the provision of pharmacy benefit management services shall offer health insurance plans a quotation for an administrative-services-only contract with full pass through of negotiated prices, rebates, and other such financial benefits which would identify to the health insurance plan external sources of revenue and profit, in addition to quotations for any other alternative pricing arrangement.  Quotations for an administrative-services-only contract shall include a reasonable fee payable by the health insurance plan which represents a competitive pharmacy benefit profit.

(c)  In order to enable periodic verification of pricing arrangements, pharmacy benefit managers shall allow access, in accordance with rules adopted by the commissioner, by the health insurance plan to financial and contractual information necessary to conduct a complete and independent audit designed to verify the following:

(1)  if applicable under an administrative-services-only contract under subsection (a) of this section, full pass through of negotiated drug prices and fees associated with all drugs dispensed to beneficiaries of the health insurance plan in both retail and mail order settings or resulting from any of the pharmacy benefit management functions defined in this section;

(2)  if applicable under an administrative-services-only contract under subsection (a) of this section, full pass through of all financial remuneration associated with all drugs dispensed to beneficiaries of the health insurance plan in both retail and mail order settings or resulting from any of the pharmacy benefit management functions defined in this section; and

(3)  any other verifications relating to the pricing arrangements and activities of the pharmacy benefit manager required by the commissioner.

(d)  The department’s reasonable expenses in adopting rules and administering the provisions of this section may be charged to pharmacy benefit managers in the manner provided for in section 18 of Title 8.  Such expenses shall be allocated in proportion to the lives of Vermonters covered by each pharmacy benefit manager as reported annually to the commissioner in a manner and form prescribed by the commissioner.

(e)  The commissioner may adopt such rules as are necessary or desirable in carrying out the purposes of this section and shall specify that the disclosure requirements of this section apply only to contracts for pharmacy benefit management entered into after July 1, 2004.  The rules also shall ensure that proprietary information is kept confidential and not disclosed by health insurance plans.

(f)  As used in this section:

(1)  “Health insurance plan” is defined in subdivision 9471(2) of this title.

(2)  “Health insurer” is defined by subdivision 9402(9) of this title.  As used in this section, the term includes the state of Vermont and any agency or instrumentality of the state that offers or administers a health benefit plan for public employees as well as Medicaid, the Vermont health access plan, the VScript pharmaceutical assistance program, and any other public health care assistance program.

(3)  “Pharmacy benefit management” is defined in subdivision 9471(4) of this title.

(4)  “Pharmacy benefit manager” is defined in subdivision 9471(5) of this title.

Fourth:  By adding a new section to read as follows:

Sec. 4b.  18 V.S.A. § 9421 is added to read:

§ 9421.  RETAIL PHARMACIES; FILLING OF PRESCRIPTIONS

A health insurer, as defined in subdivision 9471(3) of this title, and pharmacy benefit manager, as defined in subdivision 9471(5) of this title, doing business in Vermont shall permit a retail pharmacist licensed under chapter 36 of Title 26 to fill prescriptions in the same manner as they are filled by mail order pharmacies with respect to the quantity of drugs or days’ supply of drugs dispensed under each prescription.

Fifth:  By striking out Sec. 9 in its entirety and inserting in lieu thereof the following:

* * * Prescription Drug Fair Pricing Program * * *

Sec. 9.  33 V.S.A. § 2007 is added to read:

§ 2007.  VERMONT PRESCRIPTION DRUG FAIR PRICING PROGRAM

(a)  The general assembly finds that affordability is critical in providing access to prescription drugs for all Vermont residents.  This section is intended as a positive measure to make prescription drugs more affordable for all Vermont residents, thereby increasing the overall health of our families, benefiting employers and employees and the fiscal strength of our society, promoting healthy communities, and protecting the public health and welfare.

(b)  The prescription drug price fairness review board is created to establish maximum prices for prescription drugs sold in Vermont.  The board shall consist of five members appointed by the governor, with the advice and consent of the senate:  a pharmacist, a physician, a nonphysician health care provider with prescription drug experience, and two members representing the interests of consumers with no financial interest in, or family relationship with, any health care provider, health care facility, health insurer, or pharmaceutical company.  Members shall be appointed to three-year terms, except that initial appointments shall be staggered, with two members serving three years, two members serving two years, and one member serving one year.  Members of the board may be removed only for cause.  Members shall receive compensation and reimbursement of expenses pursuant to section 1010 of Title 32.

(c)(1)  The following provisions shall apply to determinations by the prescription drug price fairness review board regarding maximum prices for prescription drugs sold in Vermont, and to the procedures for establishing those prices.

(A)  By July 1, 2006, the board shall adopt rules establishing the procedures for:  the adoption and periodic review of maximum prices, the establishment of maximum prices for new prescription drugs and the review of maximum prices of selected drugs, and the phase-out or termination of maximum prices. 

(B)  By January 5, 2007, the board shall determine whether the cost of prescription drugs provided to qualified residents under the Healthy Vermonters program is reasonably comparable to the lowest cost paid for the same drugs for delivery or dispensation in the state.  In making this determination, the following provisions shall apply:

(i)  The board shall review prescription drug use in the Healthy Vermonters program using data from the most recent six-month period for which data is available.

(ii)  Using the data reviewed in subdivision (i) of this subdivision (B), the board shall determine the 100 drugs for which the most units were provided and the 100 drugs for which the total cost was the highest.

(iii)  For each prescription drug listed in subdivision (ii) of this subdivision (B), the board shall determine the cost for each drug for beneficiaries of the Healthy Vermonters program provided those drugs on a certain date.  The average cost for each such drug shall be calculated.

(iv)  For each prescription drug listed in subdivision (ii) of this subdivision (B), the board shall determine the lowest cost for each drug paid by any purchaser on the date that is used for subdivision (iii) of this subdivision (B) for delivery or dispensation in the state, taking into consideration the Federal Supply Schedule and prices paid by pharmaceutical benefits managers and by large purchasers, and excluding drugs purchased through the Healthy Vermonters program.  The average cost for each such drug shall be calculated.

(v)  If the average cost for one or more prescription drugs under the Healthy Vermonters program, as determined in subdivision (iii) of this subdivision (B), is not reasonably comparable to the average lowest cost for the same drug or drugs as determined in subdivision (iv) of this subdivision (B), the board shall establish maximum prices for any or all prescription drugs sold in the state, in accordance with the provisions of subdivision (C) of this subdivision (1). 

(vi)  In making a determination under this section, the board may rely on pricing information on a selected number of prescription drugs if that list is representative of the prescription drug needs of the residents of the state, and that list is made public as part of the process of establishing maximum retail prices.

(C)  By July 1, 2007, the board shall put into effect the maximum prescription drug prices established under this subdivision that affect prescription drug transactions that take place in this state.  By that date the board shall also put into effect maximum prescription drug prices established under this section that affect prescription drug transactions that take place outside of this state unless the board finds that to do so is not permitted by federal law. The maximum price for any prescription drug sold in Vermont, as determined by the board under this subdivision (1), shall consist of the following components:

(i)  A maximum manufacturer price component for such drug, after consideration of the prices charged for prescription drugs in Canada, the prices listed on the Federal Supply Schedule, and any other information relevant to the purposes of this section.

(ii)  A retail price component for such drug, after consideration of the maximum manufacturer’s price for such drug determined by the board under this subdivision (C), plus any reasonable, customary cost of doing business and profit markup by the wholesaler, plus any reasonable, customary cost of doing business and profit markup by the retailer, as determined by the retailer; provided, however, that such retail price does not constitute an unfair and deceptive act or practice in commerce as determined by the attorney general upon review of a complaint. The retail price component set by the board may include an increase in the dispensing fee received by the pharmacist in amount determined by the board to offset any loss of revenue to the pharmacist as a result of maximum retail prices.

(2)  The board, after notice and opportunity for hearing, may grant an exemption from the price for a prescription drug established by the board under subdivision (1) of this subsection for all such drugs sold in this state,  upon its own determination, or upon the request of any affected person.  The person making the request for exemption shall have the burden of proof by a preponderance of the evidence in demonstrating the need for an exemption.  In considering the request for exemption, the board may consider:

(A)  changed circumstances since the price was established;

(B)  reasonable costs of production, distribution, marketing, and research;

(C)  the availability of one or more drugs essential to the health of Vermonters, or any other reason related to the health and safety of Vermonters; and

(D)  any other information relevant to the purpose of this section.

(3)  The board may take actions that the board determines necessary if there is a severe limitation or shortage of or lack of access to prescription drugs in the state that could threaten or endanger the public health or welfare.

(4)  The board may act in cooperation with agencies in other states to maximize the effectiveness of its prescription drug price regulation activities under this section.

(d)  In carrying out its duties, the board shall have all the powers necessary to carry out the purposes of this section, including:

(1)  the power to appoint an executive director and other necessary assistants and prescribe their duties, subject to appropriations by the general assembly, and to exercise such other powers as are necessary to carry out the purposes of this section;

(2)  the power to adopt administrative rules, including the adoption of emergency rules, to implement the provisions of this section in a timely manner; and

(3)  the power to collect from any manufacturer, wholesaler, or retailer of prescription drugs sold in Vermont such information as is necessary for the board to carry out its duties under this section.  Pursuant to the power granted under this subdivision:

(A)  Any manufacturer, wholesaler, or retailer of prescription drugs sold in Vermont shall file with the board, on request, such data, statistics, schedules, or information as the board may require to enable it to carry out its duties.

(B)  The board shall have the power to examine books and accounts of any manufacturer, wholesaler, or retailer of prescription drugs sold in Vermont, to subpoena witnesses and documents, to administer oaths to witnesses, and to examine them on all matters of which the board has jurisdiction.

(C)  For the purpose of supporting fair and effective competition and price transparency in the market for prescription drugs, the board, in consultation with the attorney general’s office, shall adopt rules for the designation of information collected by the board under this subdivision (3) and by the commissioner under subdivision (e)(5)(B) of this section as public information or as proprietary information that shall not be disclosed to any person other than to the board, or to the attorney general for law enforcement purposes.

(e)  With respect to program administration, the commissioner shall:

(1)  administer implementation of the price regulation of any prescription drug, as determined by the board under subsection (c) of this section;

(2)  distribute information concerning the prices established by the board under subsection (c) of this section to all retail pharmacies in Vermont, and post such prices on the department’s internet web site;

(3)  twice each year, conduct and release a survey of representative retail prices for the most commonly used prescription drugs in Vermont, as determined by the commissioner; and

(4)  in consultation with the attorney general’s office, shall establish, by rule, standards of conduct to protect consumers in connection with the prescription drug industry.

(f)  In addition to his or her other powers granted by law, the commissioner shall have all the powers necessary to carry out the purposes of this section, including the power to:

(1)  Adopt emergency rules to implement programs in a timely manner; and

(2)  Collect from any manufacturer, wholesaler, or retailer of prescription drugs sold in Vermont such information as is necessary for the commissioner to carry out his or her duties under this section, subject to the rules of the board relating to proprietary information under subdivision (d)(3) of this section.  Pursuant to the power granted under this subdivision:

(A)  Any manufacturer, wholesaler, or retailer of prescription drugs sold in Vermont shall file with the commissioner, on request, such data, statistics, schedules, or information as the commissioner may require to enable the commissioner to carry out his or her duties.

(B)  The commissioner shall have the power to examine books and accounts of any manufacturer, wholesaler, or retailer of prescription drugs sold in Vermont, to subpoena witnesses and documents, to administer oaths to witnesses, and to examine them on all matters over which the commissioner has jurisdiction.

(g)  The following shall constitute, and be subject to, the rights, remedies, and other judicial procedures established for an unfair and deceptive act or practice in commerce under section 2453 of Title 9:

(1)  A violation of a provision of this section or a rule adopted pursuant to this section.

(2)  The sale by any person in this state of a prescription drug for a price in excess of the maximum price determined by the board under subsection (c) of this section.

(h)  The board and the commissioner shall report to the general assembly on or before January 1 of each year on prescription drug prices in Vermont.  Such report shall include:

(1)  The board’s maximum prescription drug prices for prescription drugs sold in Vermont.

(2)  The commissioner’s surveys of retail prices for the most commonly used prescription drugs in Vermont.

(3)  Any other findings and recommendations offered by the board and the commissioner.

(i)  An aggrieved party may appeal, on the administrative record, any adverse final decision of the board or commissioner under this section to the superior court, pursuant to Rule 74 of the Vermont Rules of Civil Procedure.

Sixth:  By adding a new section to read as follows:

Sec. 9a.  INITIAL APPOINTMENTS; RULES

(a)  Initial appointments to the prescription drug price fairness review board shall be made no later than July 1, 2004.

(b)  The prescription drug price fairness review board and the commissioner of prevention, access, transition, and health access shall file with the legislative committee on administrative rules the rules necessary to implement the provisions of Sec. 9 of this act on or before January 1, 2005.

(Committee vote: 5-2-0

Committee Bill for Notice

S. 311

An act relating to making miscellaneous changes in statutes affecting the Vermont agency of transportation.

By the Committee on Transportation.

Concurrent Resolutions for Notice under Joint Rule 16

     The following concurrent resolutions have been introduced for approval by the Senate and House and will be adopted automatically unless a Senator or Representative requests floor consideration before the end of the session of the next legislative day.  Requests for floor consideration in either chamber should be communicated to the Secretary’s office and/or the House Clerk’s office, respectively.

(For text of Resolutions, see Addendum to Senate and House Notice Calendar for Thursday, February 26, 2004

S.C.R. 45

     Senate concurrent resolution congratulating Warren H. Fournier on his being named the 2004 Swanton Citizen of the Year.

S.C.R. 46

     House concurrent resolution honoring John K. Sprague of Brookfield.

H.C.R. 189

House concurrent resolution congratulating Bennington Project Independence on the occasion of its 25th anniversary

H.C.R. 190

House concurrent resolution honoring Tim Comolli on his receipt of the National Education Association (NEA) Foundation’s Christa McAuliffe Award

H.C.R. 191

     House concurrent resolution congratulating the Vermont town fire warden program on the occasion of its centennial anniversary

H.C.R. 192

House concurrent resolution in memory of Patricia Barr of Shaftsbury

H.C.R. 193

     House concurrent resolution congratulating Jason Barrett of Shaftsbury

upon earning the rank of Eagle Scout

H.C.R. 194

House concurrent resolution in memory of former Representative Dr. James S. Shea of Shaftsbury

H.C.R. 195

House concurrent resolution congratulating Kathryn Budnik of Essex Junction on winning the Vermont senior high school 2004 Prudential Spirit of Community Award

H.C.R. 196

House concurrent resolution congratulating Marcus Falion of Brattleboro on his attainment of Eagle rank in the Boy Scouts of America

H.C.R. 197

House concurrent resolution congratulating Charles W. Johnson on his receipt of an honorary doctor of science degree from the University of Vermont

H.C.R. 198

House concurrent resolution congratulating Kyle S. Field of Boy Scout Troop #405 of Brattleboro upon earning the rank of Eagle Scout

H.C.R. 199

House concurrent resolution congratulating Laura (Capsey) Scott on her 100th birthday

H.C.R. 200

House concurrent resolution honoring Julius “Jules” Larrow of New Haven

H.C.R. 201

House concurrent resolution in memory of Woodbury E. Rouse Sr.

H.C.R. 202

House concurrent resolution honoring Mary (Burke) Plouffe of Bridport

H.C.R. 203

House concurrent resolution honoring S. Stacy Chapman of Rutland Town

H.C.R. 204

House concurrent resolution in memory of Jean Louis Rainville of Highgate

H.C.R. 205

House concurrent resolution in memory of Owen C. McCuin Jr.

H.C.R. 206

House concurrent resolution congratulating the Bellows Free Academy‑Fairfax 2004 Division III state championship cheerleading team

H.C.R. 207

House concurrent resolution in memory of Lillian Loomis Reynolds

H.C.R. 208

House concurrent resolution in memory of Ronald Sunderland of Georgia

H.C.R. 209

House concurrent resolution honoring Manchester historian Mary Hard Bort.

CONFIRMATIONS

     The following appointment will be considered by the Senate, as a group, under suspension of the Rules, as moved by the President pro tempore, for confirmation together and without debate, by consent thereby given by the Senate.  However, upon request of any senator, any appointment may be singled out and acted upon separately by the Senate, with consideration given to the report of the Committee to which the appointment was referred, and with full debate; and further, all appointments for the positions of Secretaries of Agencies, Commissioners of Departments, Judges, Magistrates, and members of the Public Service Board shall be fully and separately acted upon.

James Postma of Burlington – Member of the Valuation Appeals Board – By Senator Ayer for the Committee on Finance.  (2/17)

PUBLIC HEARINGS

Thursday, February 26, 2004 – Room 11 – 7:00 P.M. – End of Life Care:  Choices and Challenges – Senate and House Committees on Health and Welfare.

REPORTS ON FILE

Pursuant to the provisions of 2 V.S.A. §20(c), one (1) copy of the following reports is on file in the office of the Secretary of the Senate:

     95.     Park and Ride Study.  (Agency of Transportation).  (February 2004).

     96.     Vermont State Housing Authority 2003 Annual Report.  (February 2004).

     97.     Protection of Highways; Flow Design.  (Agency of Transportation, Program Development Division).  (February 2004).

     98.     Financial integrity of the State employees’ and teachers’ retirement systems.  (Dept. of Finance and Management).  (February 2004).

     99.     Joint housing committee 2003-2004 report.  (Legislative Council).  (February 2004).

   100.     Recommendations for Legislation on Dams.  (Agency of Natural Resources, Dept. of Environmental Conservation, Facilities Engineering Division).  (February 2004).

   101.     2002 Energy Efficiency Utility Program Revenues and Expenditures.  (Public Service Board).  (February 2004).