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July Legislative Update: Narcotics Abuse Prevention, Dispensing Fees, E-Prescribing Controlled Substances

HB 547:  Narcotics Abuse Prevention Act

State Representatives Ray Pryor (D-Chillicothe) and Nancy Garland (D-New Albany) have introduced legislation aimed at helping stop the growing abuse of prescription drugs.  HB 547 will establish licensing requirements for pain management clinics and modification of the laws governing OARRS (Ohio Automated Rx Reporting System).  The legislation will also do the following.

  • ·         Require the State Medical Board to adopt rules specifying when a prescriber is required to review information in OARRS.
  • ·         Clearly define a “pain management clinic” as a facility at which the majority of patients are provided treatment for chronic pain with the use of controlled substances or tramadol.
  • ·         Establishes strict guidelines for the operation of a pain management clinic.
  • ·         Requires a person seeking licensure as a terminal distributor of dangerous drugs to meet additional requirements if the person works for a pain management clinic.
  • ·         Requires any person working for a pain management clinic to be licensed as a terminal distributor of dangerous drugs.
  • ·         Requires background checks for owners and employees of a pain management clinic.

This bill is part of a larger effort across the state to address the issue of prescription drug abuse.  OPA has been active in the working group that put this bill together, and will continue to work with the sponsor and the Board of Pharmacy as this bill moves through the legislature.  Hearings will probably not begin until Fall.

 SB 277:  Pharmacy Dispensing Fee

Sen. Shannon Jones (R-Springboro) introduced legislation to address the dispensing fee cut that pharmacy suffered in the most recent budget.  The legislation is comprehensive and addresses several issues including a fair way to set the dispensing fee as well as more regularly updating the formulary prices.  SB 277 would:

• Restore the dispensing fee to $3.70 until the survey is completed.

• Require the Ohio Department of Job and Family Services (ODJFS) to conduct an annual cost of dispensing survey, conducted by an educational institution, to determine the actual cost to pharmacies to dispense Medicaid prescriptions. (The study conducted [but not utilized] by ODJFS in 2008 concluded that the cost to pharmacies to dispense Medicaid prescriptions was $7.77.)

• Require ODJFS to amend the Medicaid rules within 90 days of the completion of the survey to set the dispensing fee at a rate equal to the actual cost to dispense Medicaid prescriptions as determined by the survey.

• Require ODJFS to initiate a four brand name prescription limit for Medicaid recipients.

  1. The National Association of Chain Drug Stores (NACDS) estimates this will save the State of Ohio over $57 million annually through the increased use of generic drugs.  A number of states already utilizes such a brand name limit.
  2. In February the federal government sent $150 million back to Ohio to give states some relief on payments to Medicare for Part D drugs.

• Allow for an override of the four brand name limit using proper prior authorization procedures.

  1. Allows the physician to ensure that a person who truly needs more than four brand name drugs a month is able to receive them.

•     Require ODJFS to update the product price component of the Medicaid reimbursement formula within 24 hours of changes to a manufacturer’s price for a drug, so reimbursement is based on the actual current cost to purchase the drug.

It is expected that hearings will resume in the fall, and OPA will aggressively pursue this legislation. 

 DEA Allows E-Prescribing Controlled Substances

The DEA interim final rule allowing for the electronic prescribing of controlled substances became effective on June 1.  This is the first time ever that there can be a coordinated e-prescribing system for both controlled and non-controlled prescription medication.

Although the new regulations went into effect June 1, it is expected that implementation will take six months or more to allow time for stakeholders to comply with the rule.  A pharmacy cannot process electronic prescriptions for controlled substances until its pharmacy application provider obtains a third party audit or certification review that determines that the application complies with DEA’s requirements and the application provider gives the audit/certification report to the pharmacy.

Today, most pharmacies in the U.S. have the capability to receive electronic prescriptions.  The trend toward e-prescribing is growing exponentially.  The number of prescriptions routed electronically grew from 68 million in 2008 to 191 million in 2009. 

DEA has posted guidance at:

Red Flags ID Theft Rule Enforcement Delayed Again

The Federal Trade Commission (FTC) has postponed enforcement of its identity theft prevention Red Flags Rule through December 31. Enforcement was scheduled to begin June 1. The so-called red flags rule requires creditors and financial institutions to have identity theft detection procedures in place. The procedures to spot the red flags of identity theft could include checking for and detecting fake or altered IDs, inconsistencies in a patient’s medical records, or fraud alerts from consumer reporting agencies.

If your pharmacy regularly extends credit to customers through patient charge accounts, or house accounts, you are covered by the rule. Legislation that would exempt most health care providers, and certain other small businesses, unanimously cleared the House of Representatives last year, but has not been taken up by the Senate.

FTC has posted guidance on this issue at:

 If you have any questions or comments about the issues mentioned in this article, please contact Kelly Vyzral, Director of Government Affairs, at 614.586.1497 or

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