Section 272. Preferred drug program

1. There is hereby established a
  preferred  drug  program  to  promote  access  to  the  most   effective
  prescription  drugs  while  reducing  the cost of prescription drugs for
  persons in state public health plans.
    2. When a prescriber prescribes a  non-preferred  drug,  state  public
  health  plan reimbursement shall be denied unless prior authorization is
  obtained, unless no prior authorization is required under this article.
    3. The commissioner shall  establish  performance  standards  for  the
  program  that,  at a minimum, ensure that the preferred drug program and
  the clinical drug review program provide  sufficient  technical  support
  and timely responses to consumers, prescribers and pharmacists.
    4.  Notwithstanding  any  other  provision  of law to the contrary, no
  preferred  drug  program  or   prior   authorization   requirement   for
  prescription  drugs,  except as created by this article, paragraph (a-1)
  or (a-2) of subdivision four of section three  hundred  sixty-five-a  of
  the  social  services  law,  paragraph (g) of subdivision two of section
  three hundred sixty-five-a of the social services law,  subdivision  one
  of section two hundred forty-one of the elder law and shall apply to the
  state public health plans.
    5.  The  pharmacy  and  therapeutics committee shall consider and make
  recommendations to the commissioner for the adoption of a preferred drug
  program. (a) In developing the preferred  drug  program,  the  committee
  shall,  without limitation: (i) identify therapeutic classes or drugs to
  be included in the preferred drug program; (ii) identify preferred drugs
  in each of the chosen therapeutic classes; (iii) evaluate  the  clinical
  effectiveness  and  safety of drugs considering the latest peer-reviewed
  research and may consider studies submitted to the federal food and drug
  administration  in  connection  with  its  drug  approval  system;  (iv)
  consider  the  potential impact on patient care and the potential fiscal
  impact that may result from making such a therapeutic class  subject  to
  prior  authorization;  and  (v)  consider  the  potential  impact of the
  preferred drug program on the health  of  special  populations  such  as
  children,  the  elderly,  the chronically ill, persons with HIV/AIDS and
  persons with mental health conditions.
    (b) In developing  the  preferred  drug  program,  the  committee  may
  consider  preferred drug programs or evidence based research operated or
  conducted by or for other state governments, the federal government,  or
  multi-state  coalitions.  Notwithstanding  any inconsistent provision of
  section one hundred twelve or article eleven of the state finance law or
  section one hundred forty-two of the economic  development  law  or  any
  other law, the department may enter into contractual agreements with the
  Oregon  Health  and Science University Drug Effectiveness Review Project
  to provide technical and clinical  support  to  the  committee  and  the
  department  in  researching  and  recommending drugs to be placed on the
  preferred drug list.
    (c) The committee shall from  time  to  time  review  all  therapeutic
  classes  included  in the preferred drug program, and may recommend that
  the commissioner add or delete drugs or classes of drugs to or from  the
  preferred drug program, subject to this subdivision.
    (d)  The  committee  shall  establish  procedures  to  promptly review
  prescription  drugs  newly  approved  by  the  federal  food  and   drug
  administration.
    6.  The  committee  shall  recommend  a procedure and criteria for the
  approval of non-preferred drugs  as  part  of  the  prior  authorization
  process.  In  developing  these  criteria,  the  committee shall include
  consideration of the following:
    (a) the preferred drug has been tried by the patient and has failed to
  produce the desired health outcomes;

    (b) the patient has tried  the  preferred  drug  and  has  experienced
  unacceptable side effects;
    (c)  the  patient  has  been  stabilized  on  a non-preferred drug and
  transition to the preferred drug would be medically contraindicated; and
    (d) other clinical indications for the use of the non-preferred  drug,
  which  shall  include  consideration  of  the  medical  needs of special
  populations, including  children,  the  elderly,  the  chronically  ill,
  persons with mental health conditions, and persons affected by HIV/AIDS.
    7.  The  commissioner  shall  provide thirty days public notice on the
  department's website prior to any meeting of the  committee  to  develop
  recommendations  concerning  the  preferred  drug  program.  Such notice
  regarding meetings of the committee shall include a description  of  the
  proposed therapeutic class to be reviewed, a listing of drug products in
  the  therapeutic  class,  and  the  proposals  to  be  considered by the
  committee. The committee shall allow  interested  parties  a  reasonable
  opportunity to make an oral presentation to the committee related to the
  prior  authorization  of  the  therapeutic  class  to  be  reviewed. The
  committee shall consider any  information  provided  by  any  interested
  party, including, but not limited to, prescribers, dispensers, patients,
  consumers   and   manufacturers   of   the   drug  in  developing  their
  recommendations.
    8. The  commissioner  shall  provide  notice  of  any  recommendations
  developed  by  the  committee  regarding  the preferred drug program, at
  least thirty days before any final determination by the commissioner, by
  making such information available  on  the  department's  website.  Such
  public  notice  shall  include:  a  summary  of the deliberations of the
  committee; a summary of the positions of those making public comments at
  meetings of the committee;  the  response  of  the  committee  to  those
  comments, if any; and the findings and recommendations of the committee.
    9.  Within  ten  days of a final determination regarding the preferred
  drug program, the  commissioner  shall  provide  public  notice  on  the
  department's  website  of  such determinations, including: the nature of
  the determination; and analysis of  the  impact  of  the  commissioner's
  determination on state public health plan populations and providers; and
  the  projected fiscal impact to the state public health plan programs of
  the commissioner's determination.
    10.  The  commissioner  shall  adopt  a  preferred  drug  program  and
  amendments  after considering the recommendations from the committee and
  any comments received from prescribers, dispensers, patients,  consumers
  and manufacturers of the drug.
    (a)  The  preferred drug list in any therapeutic class included in the
  preferred  drug  program  shall  be  developed  based  initially  on  an
  evaluation  of  the clinical effectiveness, safety and patient outcomes,
  followed by consideration of the cost-effectiveness of the drugs.
    (b) In each therapeutic class included in the preferred drug  program,
  the  committee  shall  determine  whether  there  is  one  drug which is
  significantly more clinically effective and safe, and that drug shall be
  included on the preferred drug list without consideration of  cost.  If,
  among  two  or  more  drugs  in  a  therapeutic class, the difference in
  clinical effectiveness and safety is not  clinically  significant,  then
  cost  effectiveness  (including price and supplemental rebates) may also
  be considered in determining which drug or drugs shall  be  included  on
  the preferred drug list.
    (c)  In  addition  to  drugs  selected  under  paragraph  (b)  of this
  subdivision, any prescription drug in the therapeutic class, whose  cost
  to  the  state public health plans (including net price and supplemental
  rebates) is equal to or less than  the  cost  of  another  drug  in  the
  therapeutic class that is on the preferred drug list under paragraph (b)

  of  this  subdivision, may be selected to be on the preferred drug list,
  based on clinical effectiveness, safety and cost-effectiveness.
    11.   (a)   The   commissioner   shall   provide  an  opportunity  for
  pharmaceutical manufacturers to  provide  supplemental  rebates  to  the
  state  public  health  plans  for drugs within a therapeutic class; such
  supplemental rebates shall be taken into consideration by the  committee
  and  the  commissioner  in  determining  the cost-effectiveness of drugs
  within a therapeutic class under the state public health plans.
    (b) The commissioner may designate a  pharmaceutical  manufacturer  as
  one  with  whom  the  commissioner  is  negotiating  or has negotiated a
  manufacturer agreement, and all of the drugs it manufactures or  markets
  shall  be  included  in the preferred drug program. The commissioner may
  negotiate  directly  with  a  pharmaceutical  manufacturer  for  rebates
  relating  to  any  or  all  of  the  drugs it manufactures or markets. A
  manufacturer  agreement  shall  designate  any  or  all  of  the   drugs
  manufactured  or  marketed  by  the pharmaceutical manufacturer as being
  preferred or non preferred drugs. When a pharmaceutical manufacturer has
  been designated by the commissioner under this  paragraph  but  has  not
  reached  a  manufacturer agreement with the pharmaceutical manufacturer,
  then all of the drugs manufactured or  marketed  by  the  pharmaceutical
  manufacturer shall be non preferred drugs. However, notwithstanding this
  paragraph,  any  drug  that is selected to be on the preferred drug list
  under paragraph (b) of subdivision ten of this section on  grounds  that
  it is significantly more clinically effective and safer than other drugs
  in its therapeutic class shall be a preferred drug.
    (c)  Supplemental  rebates under this subdivision shall be in addition
  to those required by applicable federal law  and  subdivision  seven  of
  section three hundred sixty-seven-a of the social services law. In order
  to  be  considered  in  connection with the preferred drug program, such
  supplemental rebates shall apply to the drug  products  dispensed  under
  the   Medicaid  program  and  the  EPIC  program.  The  commissioner  is
  prohibited from approving alternative rebate demonstrations, value added
  programs  or  guaranteed  savings  from  other  program  benefits  as  a
  substitution for supplemental rebates.
    12.  No prior authorization shall be required under the preferred drug
  program for: (a) atypical  anti-psychotics;  (b)  anti-depressants;  (c)
  anti-retrovirals   used   in   the   treatment   of  HIV/AIDS;  and  (d)
  anti-rejection  drugs  used  for  the  treatment  of  organ  and  tissue
  transplants; (e) any other therapeutic class for the treatment of mental
  illness  or  HIV/AIDS,  recommended by the committee and approved by the
  commissioner under this section.
    13. The commissioner may implement all or a portion of  the  preferred
  drug  program  through  contracts  with administrators with expertise in
  management of pharmacy services, subject to applicable laws.
    14. For a period of eighteen  months,  commencing  with  the  date  of
  enactment  of  this  article,  and  without regard to the preferred drug
  program or  the  clinical  drug  review  program  requirements  of  this
  article,  the  commissioner  is  authorized to implement, or continue, a
  prior authorization requirement for a drug which may  not  be  dispensed
  without a prescription as required by section sixty-eight hundred ten of
  the  education law, for which there is a non-prescription version within
  the same drug class, or for which there is a comparable non-prescription
  version of the same drug. Any such prior authorization requirement shall
  be implemented in a manner that is consistent with the process  employed
  by  the  commissioner for such authorizations as of one day prior to the
  date of enactment of this article. At the  conclusion  of  the  eighteen
  month  period,  any  such  drug  or  drug  class shall be subject to the
  preferred drug program requirements of this article; provided,  however,

  that the commissioner is authorized to immediately subject any such drug
  to  prior authorization without regard to the provisions of subdivisions
  five through eleven of this section.
    * NB Repealed June 15, 2012