Bill Text: IL HB3490 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Creates the Canadian Prescription Drug Importation Act. Provides that the Department of Public Health shall establish the Canadian prescription drug importation program for the importation of safe and effective prescription drugs from Canada which have the highest potential for cost savings to the State. Provides that the Department shall contract with a vendor to provide services under the program. Provides that by December 1, 2023, and each year thereafter, the vendor shall develop a wholesale prescription drug importation list identifying the prescription drugs that have the highest potential for cost savings to the State. Provides that the vendor shall identify Canadian suppliers that are in full compliance with the provisions of the Act and contract with the Canadian suppliers to import drugs under the program. Contains provisions concerning: a bond requirement; requirements for eligible prescription drugs; requirements for eligible Canadian suppliers; requirements for eligible importers; distribution requirements; federal approval; prescription drug supply chain documentation; immediate suspension of specified imported drug; requirements of an annual report; and notification of federal approval. Provides that the Department shall adopt rules necessary to implement the Act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2023-03-10 - Rule 19(a) / Re-referred to Rules Committee [HB3490 Detail]

Download: Illinois-2023-HB3490-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3490 Introduced , by Rep. Hoan Huynh SYNOPSIS AS INTRODUCED:
New Act
Creates the Canadian Prescription Drug Importation Act. Provides that the Department of Public Health shall establish the canadian prescription drug importation program for the importation of safe and effective prescription drugs from Canada which have the highest potential for cost savings to the State. Provides that the Department shall contract with a vendor to provide services under the program. Provides that by December 1, 2023, and each year thereafter, the vendor shall develop a wholesale prescription drug importation list identifying the prescription drugs that have the highest potential for cost savings to the State. Provides that the vendor shall identify Canadian suppliers that are in full compliance with the provisions of the Act and contract with the Canadian suppliers to import drugs under the program. Provides for: a bond requirement; requirements for eligible prescription drugs; requirements for eligible Canadian suppliers; requirements for eligible importers; distribution requirements; federal approval; prescription drug supply chain documentation; immediate suspension of specified imported drug; requirements of an annual report; notification of federal approval. Provides that the Department shall adopt rules necessary to implement the Act.
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A BILL FOR
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AN ACT concerning health.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Canadian Prescription Drug Importation Act.
Section 5. Legislative findings. The General Assembly
finds:
(1) United States consumers pay some of the highest
prescription drug prices in the world, and it is estimated
that United States consumers pay twice as much as the amount
Canadian consumers pay for patented prescription drugs and 20%
more for generic drugs.
(2) Federal law, as codified in 21 U.S.C. 384, authorizes
the Secretary of the United States Department of Health and
Human Services to allow wholesale importation of prescription
drugs from Canada if such importation is shown to be both safe
and less costly for United States consumers.
(3) Although importing prescription drugs would be less
costly, there may be risks posed to consumer health and safety
if the source, quality, and purity of prescription drugs sold
by online pharmacies cannot be verified.
(4) Canada has a rigorous regulatory system to license
prescription drugs, equivalent to the licensing system in the

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United States.
(5) In the United States, Title II of the federal Drug
Quality and Security Act, referred to as the Drug Supply Chain
Security Act, has significantly improved drug security and
safety through a system of pharmaceutical product
track-and-trace procedures.
(6) A wholesale drug importation program for the exclusive
benefit of residents of the State should be designed and
implemented to provide consumers of the State access to safe
and less expensive prescription drugs.
Section 10. Definitions. As used in this Act:
"Canadian supplier means a manufacturer, wholesale
distributor, or pharmacy that is appropriately licensed or
permitted under Canadian federal and provincial laws and
regulations to manufacturer, distribute, or dispense
prescription drugs.
"Department" means the Department of Public Health.
"Drug" or prescription drug" has has the same meaning as
"drugs" in Section 1 of the Pharmacy Practice Act.
"Eligible importer" means an importer that is:
(1) a pharmacist or wholesaler employed by or under
contract with a medicaid pharmacy, for dispensing to the
pharmacy's medicaid recipients;
(2) a pharmacist or wholesaler employed by or under
contract with the Department of Corrections, for

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dispensing to inmates in the custody of the Department of
Corrections;
(3) a commercial plan, as defined by rules adopted by
the Department and as approved by the federal government;
and
(4) a licensed pharmacist under the Pharmacy Practice
Act or registered wholesaler approved by the Department.
"Federal act" means the federal Food, Drug, and Cosmetic
Act.
"Medicaid pharmacy means a pharmacy licensed under the
Pharmacy Practice Act that has a Medicaid provider agreement
in effect with the State and is in good standing with the
State.
"Pharmacist" means a person who holds and active and
unencumbered license to practice pharmacy under the Pharmacy
Practice Act.
"Program" means the Canadian prescription drug importation
program created in this Act.
"Vendor" means a vendor with which the State who contracts
for the provision of services under the program pursuant to
subsection (a) of Section 15.
Section 15. Canadian prescription drug importation
program; importation process; contract with vendor; vendor
duties.
(a) The Canadian prescription drug importation program is

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created in the Department. Upon receiving approval of the
program as described in Section 25, the Department shall
contract with one or more vendors to provide services under
the program. For 3 years following the effective date of this
Act, the selection of any vendor pursuant to this subsection
is exempt from the requirements of the Illinois Procurement
Code.
(b) Each vendor, in consultation with the Department and
any other vendors, shall establish a wholesale prescription
drug importation list that identifies the prescription drugs
that have the highest potential for cost savings to the State.
In developing the list, each vendor shall consider, at a
minimum, which prescription drugs will provide the greatest
cost savings to the State, including prescription drugs for
which there are shortages, specialty prescription drugs, and
high-volume prescription drugs. Each vendor shall revise the
list at least annually and at the direction of the State
department pursuant to this subsection. The Department shall
review the wholesale prescription drug importation list at
least every 3 months to ensure that it continues to meet the
requirements of the program. The Department may direct a
vendor to revise the list, as necessary. Each vendor, in
consultation with the Department, shall identify Canadian
suppliers who are in full compliance with relevant Canadian
federal and provincial laws and regulations and who have
agreed to export prescription drugs identified on the

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wholesale prescription drug importation list. Each vendor
shall verify that such Canadian suppliers meet all of the
requirements of the program and will export prescription drugs
at prices that will provide cost savings to the State. Each
vendor shall contract with such eligible Canadian suppliers,
or facilitate contracts between eligible importers and
Canadian suppliers, to import prescription drugs under the
program. Each vendor shall assist the Department in developing
and administering a distribution program within the program.
Each vendor shall assist the Department with the annual report
described in this Act and provide any information requested by
the Department for the report. Each vendor shall ensure the
safety and quality of drugs imported under the program, as
follows:
(1) for an initial imported shipment, ensure that each
batch of the drug in the shipment is statistically sampled
and tested for authenticity and degradation in a manner
consistent with the federal act, and for any subsequent
imported shipment, ensure that a statistically valid
sample of the shipment is tested for authenticity and
degradation in a manner consistent with the federal act;
(2) certify that each drug: (i) is approved for
marketing in the United States and is not adulterated or
misbranded; and (ii) meets all of the labeling
requirements under 21 U.S.C. 352;
(3) maintain qualified laboratory records, including

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complete data derived from all tests necessary to ensure
that the drug is in compliance with the requirements of
this Section; and
(4) maintain documentation demonstrating that the
testing required by this Section was conducted at a
qualified laboratory in accordance with the Federal Act
and any other applicable federal and State laws and
regulations governing laboratory qualifications.
(c) All testing required by this section must be conducted
in a qualified laboratory that meets the standards under the
Federal Act and any other applicable federal and State laws
and regulations governing laboratory qualifications for drug
testing.
(d) Each vendor shall maintain a list of all eligible
importers that participate in the program.
(e) Each vendor shall ensure compliance with Title II of
the federal Drug Quality and Security Act by all Canadian
suppliers, eligible importers, distributors, and other
participants in the program.
(f) Each vendor shall provide an annual financial audit of
its operations to the Department. Each vendor shall also
provide quarterly financial reports specific to the program
and shall include information concerning the performance of
its subcontractors and vendors. The Department shall determine
the format and contents of the reports.
(g) Each vendor shall submit evidence of a surety bond

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with any bid or initial contract negotiation documents and
shall maintain documentation of evidence of such a bond with
the Department throughout the contract term. The surety bond
may be from this State or any other State in the United States
and must be in an amount of at least $25,000. The surety bond
or comparable security arrangement must include the State as a
beneficiary. In lieu of the surety bond, a vendor may provide a
comparable security agreement, such as an irrevocable letter
of credit or a deposit into a trust account or financial
institution that includes the State as a beneficiary, payable
to the State. The purposes of the bond or other security
arrangement are to:
(1) ensure participation of the vendor in any civil or
criminal legal action by the State department, any other
State agency, or private individuals or entities against
the vendor because of the vendor's failure to perform
under the contract, including, but not limited to, causes
of actions for personal injury, negligence, and wrongful
death;
(2) ensure payment by the vendor through the use of a
bond or other comparable security arrangement of any legal
judgments and claims that are awarded to the State, other
entities acting on behalf of the State, individuals, or
organizations if the vendor is assessed a final judgment
or other monetary penalty in a court of law for a civil or
criminal action under the program. The bond or comparable

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security arrangement may be accessed if the vendor fails
to pay any judgment or claim within 60 days after final
judgment; and
(3) allow for civil and criminal litigation claims to
be made against the bond or other comparable security
arrangements for up to one year after the vendor's
contract under the program has ended with the Department,
the vendor's license is no longer valid, or the program
has ended, whichever occurs last.
(8) Each vendor shall maintain information and
documentation submitted under this Section for a period of at
least 7 years.
(9) The Department may require each vendor to collect any
other information necessary to ensure the protection of the
public health.
Section 20. Eligible prescription drugs; eligible Canadian
suppliers; eligible importers; distribution requirements.
(a) An eligible importer may import a prescription drug
from a Canadian supplier if:
(1) the drug meets the United States Food and Drug
Administration's standards related to safety,
effectiveness, misbranding, and adulteration;
(2) importing the drug would not violate federal
patent laws;
(3) importing the drug is expected to generate cost

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savings; and
(4) the drug is not:
(i) a controlled substance as defined in 21 U.S.C.
802;
(ii) a biological product as defined in 42 U.S.C.
262;
(iii) an infused drug;
(iv) an intravenously injected drug;
(v) a drug that is inhaled during surgery; or
(vi) a drug that is a parenteral drug, the
importation of which is determined by the United
States Secretary of Health and Human Services to pose
a threat to the public health.
(b) A Canadian supplier may export prescription drugs into
the State under the program if the supplier:
(1) is in full compliance with relevant Canadian
federal and provincial laws and regulations;
(2) is identified by the vendor as eligible to
participate in the program; and
(3) submits an attestation that the supplier has a
registered agent in the United States, including the name
and United States address of the registered agent.
(c) The following entities are eligible importers and may
obtain imported prescription drugs:
(1) a pharmacist or wholesaler employed by or under
contract with a Medicaid pharmacy, for dispensing to the

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pharmacy's Medicaid recipients;
(2) a pharmacist or wholesaler employed by or under
contract with the Department of Corrections, for
dispensing to inmates in the custody of the Department of
Corrections;
(3) commercial plans, as defined by rules promulgated
by the State Board and as approved by the federal
government; and
(4) a licensed pharmacist or wholesaler approved by
the Department under the Pharmacy Practice Act.
(d) The Department shall designate an office or division
that must be a licensed pharmaceutical wholesaler or that
shall contract with a licensed pharmaceutical wholesaler
licensed pursuant to Part 3 of Article 42.5 of Title 12. The
office or division designated by the Department shall:
(1) set a maximum profit margin so that a wholesaler,
distributor, pharmacy, or other licensed provider
participating in the program maintains a profit margin
that is no greater than the profit margin that the
wholesaler, distributor, pharmacy, or other licensed
provider whole have earned on the equivalent nonimported
drug;
(2) exclude generic products if the importation of the
products would violate United States patent laws
applicable to United States-branded products;
(3) comply with the requirements of 21 U.S.C. 360eee

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through 360eee-4 as enacted in Title II of the federal
Drug Quality and Security Act; and
(4) determine a method for covering the administrative
costs of the program, which method may include a fee
imposed on each prescription pharmaceutical product sold
through the program or any other appropriate method as
determined by the Department, but the Department shall not
require a fee in an amount the Department determines would
significantly reduce consumer savings.
(e) Canadian suppliers and eligible importers
participating under the program:
(1) shall comply with the tracking and tracing
requirements of 21 U.S.C. 360; and
(2) shall not distribute, dispense, or sell
prescription drugs imported under the program outside of
the State.
(f) A participating eligible importer shall submit to the
vendor all of the following information about each drug to be
acquired by the importer under the program:
(1) the name and quantity of the active ingredient of
the drug;
(2) a description of the dosage form of the drug;
(3) the date on which the drug is received;
(4) the quantity of the drug that is received;
(5) the point of origin and destination of the drug;
and

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(6) the price paid by the importer for the drug.
(g) A participating Canadian supplier shall submit to the
vender the following information about each drug to be
supplied by the Canadian supplier under the program:
(1) the original source of the drug, including:
(i) the name of the manufacturer of the drug;
(ii) the date on which the drug was manufactured;
and
(iii) the location including the country, state or
province, and city, where the drug was manufactured;
(2) the date on which the drug is shipped;
(3) the quantity of the drug that is shipped;
(4) the quantity of each lot of the drug originally
received and the source of the lot; and
(5) the lot or control number and the batch number
assigned to the drug by the manufacturer.
(h) The Department shall immediately suspend the
importation of a specific drug or the importation of drugs by a
specific eligible importer if it discovers that any drug or
activity is in violation of this Section or any federal or
State law or regulation. The Department may revoke the
suspension if, after conducting an investigation, it
determines that the public is adequately protected from
counterfeit or unsafe drugs being imported into this State.
Section 25. Federal approval.

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(a) On or before September 1, 2023, the Department shall
submit a request to the United States Secretary of Health and
Human Services for approval of the program under 21 U.S.C.
384. The Department shall begin operating the program within 6
months after receiving such approval. The request must, at a
minimum:
(1) describe the Department's plan for operating the
program;
(2) demonstrate how the prescription drugs imported
into this State under the program will meet the applicable
federal and State standards for safety, effectiveness,
misbranding, and adulteration;
(3) include a list of proposed prescription drugs that
have the highest potential for cost savings to the State
through importation at the time that the request is
submitted;
(4) estimate the total cost savings attributable to
the program;
(5) include a list of potential Canadian suppliers
from which the State would import drugs and demonstrate
that the suppliers are in full compliance with relevant
Canadian federal and provincial laws and regulations.
(b) Notwithstanding any provision of this subsection to
the contrary, the Department may expend money for the purpose
of requesting approval of the program as described in
subsection (a), but the Department shall not spend any other

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money to implement the program until the Department receives
approval of the program as described in subsection (a).
(c) Upon receipt of federal approval of the program, the
Department shall notify the President of the Senate and the
Speaker of the House of Representatives, as well as the Health
and Human Services Committee of the Senate and the Health and
Insurance Committee of the House of Representatives, or any
successor committees. After approval is received and before
the start of the next regular session of the General Assembly
in which the proposal could be funded, the Department shall
submit to all parties specified in this subsection a proposal
for program implementation and program funding.
Section 30. Reports. On or before December 1, 2024, and on
or before December 1 each year thereafter, the Department
shall submit a report to the Governor, the President of the
Senate, and the Speaker of the House of Representatives on the
operation of the program during the previous fiscal year. The
report must include, at a minimum:
(1) a list of the prescription drugs that were
imported under the program;
(2) the number of participating Canadian suppliers and
eligible importers;
(3) the number of prescriptions dispensed through the
program;
(4) the estimated cost savings during the previous

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fiscal year and to date attributable to the program;
(5) a description of the methodology used to determine
which drugs should be included on the wholesale
prescription drug importation list; and
(6) documentation as to how the program ensures the
following that:
(i) Canadian suppliers participating in the
program are in full compliance with relevant Canadian
federal and provincial laws;
(ii) prescription drugs imported under the program
are not shipped, sold, or dispensed outside of this
State once in the possession of the eligible importer;
(iii) prescription drugs imported under the
program are pure, unadulterated, potent, and safe;
(iv) the program does not put consumers at a
higher health and safety risk than if the program did
not exist; and
(v) the program provides cost savings to the State
on imported prescription drugs.
Section 35. Importation program authorized; rulemaking.
(a) Upon approval by the Secretary, in accordance with
Section 30, the Department shall administer an importation
program.
(b) The Department shall approve a method of financing and
administrative costs of the importation program, which method

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may include imposing a fee on each prescription pharmaceutical
product sold through the importation program or any other
appropriate method determined by the Department to finance
administrative costs. The Department shall not require a fee
in an amount that the Department determines would
significantly reduce consumer savings.
(c) The Department shall adopt rules necessary to
implement this Act.