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It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  8 V.S.A. chapter 107, subchapter 9 is added to read:

Subchapter 9.  Off-Label Use of Prescription Drugs for Cancer


(a)  A health insurance plan that provides coverage for prescription drugs shall provide coverage for off-label use in cancer treatment in accordance with the following:

(1)  A health insurance plan contract may not exclude coverage for any drug used for the treatment of cancer on grounds that the drug has not been approved by the federal Food and Drug Administration, provided the use of the drug is a medically accepted indication for the treatment of cancer.

(2)  Coverage of a drug required by this section also includes medically necessary services associated with the administration of the drug.

(3)  This section shall not be construed to require coverage for a drug when the federal Food and Drug Administration has determined its use to be contraindicated for treatment of the current indication.

(4)  A drug use that is covered under subdivision (1) of this subsection may not be denied coverage based on a “medical necessity” requirement except for a reason unrelated to the legal status of the drug use.

(5)  A health insurance plan contract that provides coverage of a drug as required by this section may contain provisions for maximum benefits and coinsurance and reasonable limitations, deductibles, and exclusions to the same extent these provisions are applicable to coverage of all prescription drugs and are not inconsistent with the requirements of this section.

(b)  As used in this section, the following terms have the following meanings:

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

(2)  “Health insurer” is defined by subdivision 9402(9) of Title 18.  As used in this subchapter, 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, including Medicaid, the Vermont health access plan, the VScript pharmaceutical assistance program, or any other public health care assistance program.

(3)  “Medically accepted indication” includes any use of a drug that has been approved by the federal Food and Drug Administration and includes another use of the drug if that use is prescribed by the insured’s treating oncologist and supported by medical or scientific evidence.  For purposes of this subchapter, “medical or scientific evidence” means one or more of the following sources:

(A)  peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff.

(B)  peer-reviewed literature, biomedical compendia, and other medical literature that meet the criteria of the National Institutes of Health’s National Library of Medicine for indexing in Index Medicus, Excerpta Medicus (EMBASE), Medline, and MEDLARS database Health Services Technology Assessment Research (HSTAR).

(C)  medical journals recognized by the federal Secretary of Health and Human Services, under Section 1861(t)(2) of the federal Social Security Act.

(D)  the following standard reference compendia:  the American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluation, and the United States Pharmacopoeia-Drug Information.

(E)  findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including the Agency for Health Care Policy and Research, National Institutes of Health, National Cancer Institute, National Academy of Sciences, Center for Medicare and Medicaid Services, and any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health services.

(F)  peer-reviewed abstracts accepted for presentation at major medical association meetings.

(4)  “Off-label use” means the prescription and use of drugs for medically accepted indications other than those stated in the labeling approved by the federal Food and Drug Administration.

(c)  A determination by a health insurer that an off-label use of a prescription drug under this section is not a medically accepted indication supported by medical or scientific evidence is eligible for review under section 4089f of this title.

Sec. 2.  8 V.S.A. § 4089f(b)(3) is amended to read:

(b)  An insured who has exhausted all applicable internal review procedures provided by the health benefit plan shall have the right to an independent external review of a decision under a health benefit plan to deny, reduce or terminate health care coverage or to deny payment for a health care service.  The independent review shall be available when requested in writing by the affected insured, provided the decision to be reviewed requires the plan to expend at least $100.00 for the service and the decision by the plan is based on one of the following reasons:

* * *

(3)  The health care treatment has been determined to be experimental, investigational or an off-label drug.  A health benefit plan that denies use of a prescription drug for the treatment of cancer as not medically necessary or as an experimental or investigational use shall treat any internal appeal of such denial as an emergency or urgent appeal, and shall decide such appeal within the time frames applicable to emergency and urgent internal appeals under regulations adopted by the commissioner.


(a)  Sec. 1 of this act shall apply to all health insurance plans issued or offered on and after October 1, 2006 and to all other health insurance plans on and after October 1, 2006 upon renewal or their anniversary date, whichever is sooner, but in no event later than October 31, 2007.

(b)  Sec. 2 of this act is intended to clarify existing administrative regulations and shall apply to all appeals subject to 8 V.S.A. § 4089f (independent external review of health care service decisions) pending on and after the effective date of this act.

* * * Wholesale Drug Distributors:  Accreditation; Pedigrees * * *

Sec. 4.  26 V.S.A. § 2068 is amended to read:


An applicant shall satisfy the board that it has, and licensees shall maintain, the following:

* * *

(10)  Compliance with standards and procedures which the board shall adopt by rule concerning provisions for initial and periodic on-site inspections, criminal and financial background checks, ongoing monitoring, reciprocity for out-of-state wholesale drug distributors inspected by a third party organization recognized by the board or inspected and licensed by a state licensing authority with legal standards for licensure that are comparable to the standards adopted by the board pursuant to this subdivision, protection of a wholesale drug distributor’s proprietary information, and any other requirements consistent with the purposes of this subdivision.  The board rules may recognize third party accreditation in satisfaction of some or all of the requirements of this subdivision.


The board of pharmacy shall study the feasibility of an electronic pedigree system or any other system that would verify the chain of distribution for all prescription drugs.  The board shall report its findings and recommendations to the general assembly not later than January 15, 2007.  The study shall include consultation with drug manufacturers, wholesale drug distributors, and pharmacies responsible for the sale and distribution of prescription drugs and consideration of any relevant national standards or initiatives.  The board shall include a proposed implementation date in the study.

* * * Drug and Medical Supply Repository Program:  Study * * *


The department of health, in consultation with the office of Vermont health access, the board of pharmacy, the department of public safety, the department of disabilities, aging, and independent living, and the board of medical practice, shall study the feasibility of creating a repository program through which licensed facilities, wholesale drug distributors, and drug manufacturers can donate unused, unopened prescription drugs and medical supplies to pharmacies, hospitals, and clinics in order to dispense such drugs and supplies, for only a handling fee, to persons who are income‑eligible or uninsured.  The study shall include findings and recommendations concerning the cost the department would incur in creating and overseeing such a program, including any costs related to consultation with experts, the benefits of a repository program, and any other standards or procedures necessary for the development and implementation of the program.  The department of health shall report its findings and recommendations to the general assembly not later than January 15, 2007.


Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont