BILL NUMBER: AB 8	CHAPTERED  07/25/05

	CHAPTER  127
	FILED WITH SECRETARY OF STATE  JULY 25, 2005
	APPROVED BY GOVERNOR  JULY 25, 2005
	PASSED THE SENATE  JULY 11, 2005
	PASSED THE ASSEMBLY  APRIL 28, 2005
	AMENDED IN ASSEMBLY  APRIL 25, 2005
	AMENDED IN ASSEMBLY  MARCH 29, 2005

INTRODUCED BY   Assembly Member Chu
   (Principal coauthor: Assembly Member Cohn)

                        DECEMBER 6, 2004

   An act to amend Section 14105.436 of the Welfare and Institutions
Code, relating to Medi-Cal, and declaring the urgency thereof, to
take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 8, Chu  Medi-Cal: AIDS and cancer treatment drugs: manufacturer
rebates.
   Existing law provides for the Medi-Cal program, under which
qualified low-income persons receive health care benefits. Existing
law authorizes the State Department of Health Services to enter into
contracts with manufacturers of single source and multiple source
drugs on a bid or nonbid basis and to maintain a list of contract
drugs for purposes of the Medi-Cal program.
   Existing law prescribes conditions under which certain drugs for
use in the treatment of acquired immunodeficiency syndrome (AIDS) or
an AIDS-related condition or cancer are deemed approved for addition
to the Medi-Cal list of contract drugs or considered a Medi-Cal
benefit.
   Existing law requires, commencing July 1, 2002, all pharmaceutical
manufacturers to provide to the department a state rebate, in
addition to rebates pursuant to other provisions of state or federal
laws, for any drug products that have been added to the Medi-Cal list
of contract drugs pursuant to the above-described provisions related
to drugs used to treat AIDS and cancer. This provision becomes
inoperative on July 1, 2005, and is repealed on January 1, 2006.
   This bill would delete the inoperative date and the repeal date,
thereby extending the provision indefinitely.
  This bill would declare that it is to take effect immediately as an
urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 14105.436 of the Welfare and Institutions Code
is amended to read:
   14105.436.  (a) Effective July 1, 2002, all pharmaceutical
manufacturers shall provide to the department a state rebate, in
addition to rebates pursuant to other provisions of state or federal
law, for any drug products that have been added to the Medi-Cal list
of contract drugs pursuant to Section 14105.43 or 14133.2 and
reimbursed through the Medi-Cal outpatient fee-for-service drug
program. The state rebate shall be negotiated as necessary between
the department and the pharmaceutical manufacturer. The negotiations
shall take into account offers such as rebates, discounts, disease
management programs, and other cost savings offerings and shall be
retroactive to July 1, 2002.
   (b) The department may use existing administrative mechanisms for
any drug for which the department does not obtain a rebate pursuant
to subdivision (a). The department may only use those mechanisms in
the event that, by February 1, 2003, the manufacturer refuses to
provide the additional rebate.
   (c) In no event shall a beneficiary be denied continued use of a
drug that is part of a prescribed therapy and that is the subject of
an administrative mechanism pursuant to subdivision (b) until the
prescribed therapy is no longer prescribed.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to enact legislation, as soon as possible, to continue
provisions due to become inoperative July 1, 2005, that result in
General Fund savings, it is necessary that this act take effect
immediately.