BILL NUMBER: AB 1398	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Papan

                        FEBRUARY 26, 1999

   An act to amend Section 14105.3 of the Welfare and Institutions
Code, relating to health.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1398, as introduced, Papan.  Medi-Cal: administration.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Services, pursuant to
which medical benefits are provided to public assistance recipients
and certain other low-income persons.  Existing law relating to the
administration of the Medi-Cal program requires the department to
contract with manufacturers of single-source drugs on a negotiated
basis, and with manufacturers of multisource drugs on a bid or
negotiated basis.
   This bill would make technical, nonsubstantive changes to the
above provisions.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


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


  SECTION 1.  Section 14105.3 of the Welfare and Institutions Code is
amended to read:
   14105.3.  (a) The department is considered to be the purchaser,
but not the dispenser or distributor, of prescribed drugs under the
Medi-Cal program for the purpose of enabling the department to obtain
from manufacturers of prescribed drugs the most favorable price for
 such   those  drugs furnished by one or
more manufacturers, based upon the large quantity of such drugs
purchased under the Medi-Cal program, and to enable the department,
notwithstanding any other provision of California law, to obtain from
 such   the  manufacturers discounts,
rebates, or refunds based on  such  quantities
purchased under  said  the  program,
insofar as may be permissible under federal law.  Nothing in this
section shall interfere with usual and customary distribution
practices in the drug industry.
   (b) The department may enter into exclusive or nonexclusive
contracts on a bid or negotiated basis with manufacturers,
distributors, dispensers, or suppliers of appliances, durable medical
equipment, medical supplies, and other product-type health care
services and with laboratories for clinical laboratory services for
the purpose of obtaining the most favorable prices to the state and
to assure adequate quality of the product or service.  This
subdivision shall not apply to pharmacies licensed pursuant to
Section 4080 of the Business and Professions Code.
   (c) The department shall begin negotiation for contracts with
manufacturers of durable medical equipment and for contracts with
clinical laboratories for the provision of clinical laboratory
services not later than August 31, 1993.  The department shall not
enter into a contract with a clinical laboratory unless the clinical
laboratory is licensed pursuant to California state law or certified
under Section 263a of Title 42 of the United States Code.
   (d) The department shall contract with manufacturers of
single-source drugs on a negotiated basis  ,  and
with manufacturers of multisource drugs on a bid or negotiated basis.

   (e) In order to achieve maximum cost savings the Legislature
hereby determines that an expedited contract process for contracts
under this section is necessary.  Therefore contracts under this
section shall be exempt from Chapter 2 (commencing with Section
10290) of Part 2 of Division 2 of the Public Contract Code.
Contracts shall have no force and effect unless approved by the
Department of Finance.
   (f) The department may contract with less than all manufacturers
or clinical laboratories including only one manufacturer or clinical
laboratory, on a bid or nonbid basis.