101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB1441
 
Introduced , by Rep. Anna Moeller
 
SYNOPSIS AS INTRODUCED:



New Act

 Creates the Wholesale Importation of Prescription Drugs Act. Requires the Department of Public Health to design an importation program where the State is the licensed wholesaler of imported drugs from licensed, regulated Canadian suppliers. Requires the program to address specified issues, including billing issues, cost savings issues, and safety and regulatory issues. Contains auditing and reporting requirements. Provides that the Department shall enlist the assistance of the Attorney General to identify the potential for anti-competitive behavior in industries that would be affected by an importation program. Requires the Department to submit a formal request to the Secretary of
the United States Department of Health and Human Services for
certification of the importation program. Requires the Department to have the program operational within 6 months after receiving the certification. Contains provisions concerning implementation requirements.



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FISCAL NOTE ACT MAY APPLY
 
 
A BILL FOR
 


HB1441LRB101 00364 RPS 45368 b



1 AN ACT concerning regulation.


2 WHEREAS, United States citizens pay some of the highest 
3prices for prescription drugs in the world, and the Canadian 
4government estimated that United States consumers pay twice as 
5much as Canadians for patented prescription drugs and 20% more 
6for generics; and
7 WHEREAS, Under the Food and Drug Administration's 
8discretion not to enforce the law, individual patients may 
9import a 90-day supply of prescription drugs from Canada that 
10are less expensive than drugs licensed by the Food and Drug 
11Administration in the United States; and
12 WHEREAS, Individual importation via the Internet increases 
13consumer health and safety risks because many Internet 
14pharmacies are not licensed in Canada and it is difficult to 
15verify the validity, reputation, actual identity, and pharmacy 
16practices of online pharmacies outside the United States; and
17 WHEREAS, The United States allows patients to go to other 
18countries for surgeries and other high-risk medical treatments 
19without regulating that consumer purchasing activity, and 
20insurers sometimes facilitate and pay for treatments outside 
21the United States; and
22 WHEREAS, The Food and Drug Administration estimates that 
23currently 40% of finished prescription drug products are 
24produced outside the United States and 80% of raw products for 
25United States pharmaceutical manufacturing come from outside 
26the United States; and
 
 
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1 WHEREAS, The Food and Drug Administration recently signed 
2reciprocity agreements with European Union regulators to 
3accept the results of European Union inspections of 
4pharmaceutical manufacturing plants. The Food and Drug 
5Administration has a Memorandum of Understanding for 
6regulatory cooperation around pharmaceuticals with the 
7Canadian regulatory authorities since 1973; and
8 WHEREAS, Canada has a rigorous regulatory system to license 
9prescription drugs that is considered to be on par with the 
10United States licensing system; and
11 WHEREAS, Title II of the federal Drug Quality and Security 
12Act (P.L. 113-54), Drug Supply Chain Security, has resulted in 
13improvements in drug security and safety through a system of 
14pharmaceutical track and trace that can be leveraged for safe 
15importation; and
16 WHEREAS, The Secretary of the United States Department of 
17Health and Human Services may certify a prescription drug 
18reimportation program that is safe and saves consumers money; 
19and
20 WHEREAS, The State can ensure that wholesale importation of 
21prescription drugs from Canada into the State will be safe and 
22cost-saving for State consumers; therefore

23 Be it enacted by the People of the State of Illinois,

24represented in the General Assembly:



 
 
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1 Section 1. Short title. This Act may be cited as the 
2Wholesale Importation of Prescription Drugs Act.

3 Section 5. Definitions. As used in this Act:
4 "Department" means the Department of Public Health.
5 "Importation program" means a State-administered wholesale 
6importation program where the State is the licensed wholesaler 
7importing drugs from a licensed, regulated Canadian supplier, 
8solely for distribution to voluntarily participating, 
9State-licensed, and in-state pharmacies and administering 
10providers for the exclusive purpose of dispensing to State 
11residents with a valid prescription.

12 Section 10. Importation program. The Department shall 
13design an importation program in consultation with relevant 
14State stakeholders and federal offices and agencies that meets 
15the relevant requirements of 21 U.S.C. 384, including 
16requirements concerning safety and cost savings. In developing 
17an importation program for federal certification, the 
18Department shall address the following issues:
19  (1) That the program requires the Department to become 
20 a licensed wholesaler for the purpose of seeking federal 
21 certification and approval to import safe prescription 
22 drugs that will provide savings to State consumers.
23  (2) That the program uses Canadian suppliers regulated 
24 under the appropriate Canadian and provincial laws.
 
 
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1  (3) That the program has a process to sample the 
2 purity, chemical composition, and potency of imported 
3 products.
4  (4) That the program only imports those prescription 
5 pharmaceuticals expected to generate substantial savings 
6 for State consumers.
7  (5) That the program ensures imported products will not 
8 be distributed, dispensed, or sold outside of this State's 
9 borders.
10  (6) That the program ensures that voluntary 
11 participants, State-licensed pharmacies, and administering 
12 providers charge individual consumers and health plans the 
13 actual acquisition cost of the imported, dispensed 
14 product.
15  (7) That the program ensures health plan payment of the 
16 product component of pharmacy and provider billing 
17 reimburses no more than the actual acquisition cost of the 
18 dispensed, imported product.
19  (8) That the program ensures participating health 
20 plans keep their formularies and claims payment systems up 
21 to date with the prescription drugs provided through the 
22 importation program.
23  (9) That the program ensures participating health 
24 plans base patient cost sharing on no more than the actual 
25 acquisition cost of the dispensed, imported product.
26  (10) That the program require participating health 
 
 
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1 plans to demonstrate to the Department how savings on 
2 imported drugs are reflected in premiums. 
3  (11) That the profit margin of any participating 
4 wholesaler or distributor of imported pharmaceutical 
5 products is limited to a specified amount established by 
6 the Department.
7  (12) That the program does not import generic products 
8 that would violate United States patent laws on United 
9 States branded products.
10  (13) That the program complies with the requirements of 
11 21 U.S.C. 581 through 21 U.S.C. 582 pertaining to the track 
12 and trace requirements as enacted in Title II of the Drug 
13 Security and Quality Act (P.L. 113-54) to the extent 
14 practical and feasible before imported drugs come into 
15 possession of the State wholesaler and complies fully after 
16 imported drugs are in the possession of the State 
17 wholesaler.
18  (14) That the program is adequately financed through a 
19 fee on each prescription or other appropriate approach, but 
20 the amount of the fee may not jeopardize significant 
21 consumer savings.
22  (15) That the program includes an audit function to 
23 ensure that:
24   (A) the Department has a sound methodology by which 
25 to determine the most cost-effective products to 
26 include in the importation program on an ongoing basis;
 
 
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1   (B) the Department has processes in place to select 
2 Canadian suppliers of high quality, of high 
3 performance, and in full compliance with Canadian law 
4 and regulation and State pharmacy or wholesaler laws;
5   (C) imported drugs under the importation program 
6 are not shipped, sold, or dispensed outside the State 
7 once in the possession of the State;
8   (D) imported products are pure, unadulterated, 
9 potent, and safe;
10   (E) participating pharmacies and administering 
11 providers are not charging more than the actual 
12 acquisition cost to any consumer or any participating 
13 health plan;
14   (F) participating health plan formularies and 
15 claims processing systems remain up to date with all 
16 relevant aspects of the importation program;
17   (G) participating health plans base patient 
18 coinsurance and other cost sharing on the actual 
19 acquisition cost of covered, imported drugs;
20   (H) participating health plans reimburse 
21 participating pharmacies and administering providers 
22 the actual acquisition cost for imported, dispensed 
23 product;
24   (I) the program is adequately financed to support 
25 all administrative functions while generating 
26 significant consumer savings;
 
 
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1   (J) the program does not put consumers at higher 
2 risk than if the program did not exist; and
3   (K) the program continues to provide State 
4 consumers with substantial savings on prescription 
5 drugs.

6 Section 15. Monitoring for anti-competitive behavior. The 
7Department shall enlist the assistance of the Attorney General 
8to identify the potential for anti-competitive behavior in 
9industries that would be affected by an importation program.

10 Section 20. Report to the General Assembly. The Department 
11shall report to the General Assembly no later than 6 months 
12after the effective date of this Act on the final importation 
13program design that takes into consideration at least the items 
14in Section 10. The report to the General Assembly shall be 
15filed with the Clerk of the House of Representatives and the 
16Secretary of the Senate in electronic form only, in the manner 
17that the Clerk and the Secretary shall direct.

18 Section 25. Submission of request for federal 
19certification and approval. No later than 2 weeks after the 
20Department submits the report required under Section 20, the 
21Department shall submit a formal request to the Secretary of 
22the United States Department of Health and Human Services for 
23certification of the importation program.

 
 
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1 Section 30. Implementation and additional administrative 
2requirements. Upon certification and approval by the Secretary 
3of the United States Department of Health and Human Services, 
4the Department shall begin implementation of the importation 
5program and have the program operational within 6 months after 
6the date of the Secretary's certification. As part of the 
7implementation process, the Department shall, in accordance 
8with State procurement and contracting laws and rules as 
9appropriate:
10  (1) Become licensed as a wholesaler.
11  (2) Contract with a State-licensed distributor or 
12 distributors.
13  (3) Contract with licensed, regulated Canadian 
14 suppliers.
15  (4) Engage health plans, employers, pharmacies, 
16 providers, and consumers.
17  (5) Develop a registration process for health plans, 
18 pharmacies, and administering providers that are willing 
19 to participate.
20  (6) Create a publicly available source for listing 
21 prices of imported products that shall be available to all 
22 participating entities and consumers.
23  (7) Create an outreach and marketing plan to generate 
24 program awareness.
25  (8) Create and staff a hotline to answer questions from 
 
 
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1 any affected sector starting in the weeks before the 
2 program becomes operational that can address the needs and 
3 questions of consumers, employers, plans, pharmacies, and 
4 providers, among others.
5  (9) Establish the audit function and a 2-year audit 
6 work plan cycle.
7  (10) Conduct any other activities determined to be 
8 important to successful implementation, as determined by 
9 the Department.

10 Section 35. Ongoing oversight of program administration. 
11The Department shall report to the General Assembly every 6 
12months, commencing with either the first June or December after 
13implementation, whichever is the nearest date to the date that 
14is 6 months after implementation of the importation program. 
15The report to the General Assembly shall include the following:
16  (1) The drugs covered in the importation program.
17  (2) The number of participating pharmacies, providers, 
18 and health plans.
19  (3) The number of prescriptions dispensed under the 
20 program in the period.
21  (4) The estimated savings to consumers, health plans, 
22 and employers that resulted from the program in the 
23 reporting period and to date.
24  (5) In the first 3 reporting periods, information on 
25 the implementation of the audit plan and, on an ongoing 
 
 
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1 basis, audit findings for the reporting period.
2  (6) Any other information of importance, as determined 
3 by the Department.
4 The report to the General Assembly shall be filed with the 
5Clerk of the House of Representatives and the Secretary of the 
6Senate in electronic form only, in the manner that the Clerk 
7and the Secretary shall direct.