Protect Patients Now Act of 2024
In 1992,the federal government established a program giving safety-net health care providers access to discounted prescription drugs. The intent of the law was for such providers to use those discounted drugs to treat patients who are "medically uninsured, on marginal incomes, and have no other sources to turn to for preventive and primary care services." Pharmacies, clinics, and nursing facilities provide these drugs, and earn revenues as a result of that program, although not directly from patients. These above-cost revenues come fromexternal payors, such as Medicare, Medi-Cal, and private insurance. Huge profits have been generated by some entities charging vastly more to external providers than the discounted price they paid for the drug.
The Question:
Should this Initiative be enacted into law? This Initiative enacts two things :
A. Permanently authorizes the state of California to negotiate Medi-Cal drug prices on statewide basis - making the current "Medi-Cal RX" program into law.
B. Places a restriction and possible penalties on a group of entities it names as "Prescription Drug Price Manipulators." These are organizations or individuals that meet all four of the following criteria:
- Either:
- has ever owned at least one license to operate as a clinic, pharmacy, and/or health insurance plan
- or contracts with Med-Cal as a primary care case management organization
- or contracts with Medicare as a special needs plan
AND
- has ever been the owner-operator of one or more multifamily dwellings that have received a combined total of at least 500 state or local high-severity health and safety violations
AND
- obtains prescription drugs through the discount prescription drug program
AND
- In any 10-year period has spent more than $100 million on purposes not related to direct patient care
The restriction requires these health care providers to spend 98% of revenues from the federal discount prescription drug program on direct patient care, and to report compliance to California state monitors.. The state is allowed to charge processing fees for the annual review.
If, after judicial hearings, the entity is found to be not in compliance with the 98% rule, penalties can include loss of any California state tax-exempt status, permanent revocation of any and all California pharmacy licenses, health care service plan licenses, or clinic licenses, prohibition from applying for, or obtaining or possessing, a California pharmacy license, health care service plan license, or clinic license for a period of 10 years, among other penalties.
Additional Information: