Current Status Bill Number:716 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19950411 Primary Sponsor:Land All Sponsors:Land Drafted Document Number:jic\5755ac.95 Residing Body:Senate Current Committee:Banking and Insurance Committee 02 SBI Subject:Off-label drugs
Body Date Action Description Com Leg Involved
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Senate 19950411 Introduced, read first time, 02 SBI
referred to Committee
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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-71-275 SO AS TO REQUIRE INSURANCE POLICIES COVERING DRUGS TO PROHIBIT EXCLUDING COVERAGE OF CERTAIN DRUGS ON THE GROUND THAT THEY ARE NOT APPROVED BY THE FEDERAL FOOD AND DRUG ADMINISTRATION IF THE DRUG IS OTHERWISE RECOGNIZED AND TO PROVIDE EXCEPTIONS; AND TO DIRECT THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO CREATE A PANEL TO REVIEW THE COVERAGE FOR OFF-LABEL DRUGS.
Whereas, the General Assembly finds that:
(1) The citizens of this State rely upon health insurance to cover the cost of obtaining health care.
(2) It is essential that the citizens' expectation is met, that their health care costs will be paid by their insurance policies, and that they obtain the coverage necessary and appropriate for their care within the terms of their insurance policies.
(3) Some insurers deny payment for drugs that have been approved by the Federal Food and Drug Administration (FDA) when the drugs are used for indications other than those stated in the labeling approved by FDA (off-label use) while other insurers with similar coverage terms do pay for off-label use.
(4) Denial of payment for off-label use can interrupt or effectively deny access to necessary and appropriate treatment for a person being treated for a life-threatening illness.
(5) Equity among employers who obtain insurance coverage for their employees and fair competition among insurance companies require that insurance companies assure citizens' reimbursement for drugs in the same way and in the way citizens expect.
(6) Off-label use of an FDA-approved drug is legal when prescribed in a medically-appropriate way and is often necessary to provide needed care. Approximately fifty percent of cancer drug treatment is for off-label indications. The FDA and the Federal Department of Health and Human Services recognize the wide variety of effective uses of FDA-approved drugs for off-label indications. Information on the appropriate off-label use of FDA-approved drugs is obtained from compendia published by the United States Pharmacopoeial Convention, the American Medical Association, and the American Society of Hospital Pharmacists. In addition, scientific studies of off-label use of drugs published in recognized peer-reviewed professional journals provide information on appropriate use of drugs for off-label indications. The Omnibus Budget Reconciliation Act of 1990 recognizes these three compendia and peer-reviewed literature as appropriate sources for reimbursement and requires Medicaid agencies to pay for off-label use of drugs prescribed for Medicaid patients if the use is stated in any of the sources. The Omnibus Budget Reconciliation Act of 1993 applies the same criteria and coverage to Medicare patients. Seventeen states also have passed similar legislation, most based on the attached uniform legislation.
(7) Use of FDA-approved drugs for off-label indications provides efficacious drugs at a lower cost. To require that all appropriate uses of a drug undergo approval by the FDA would substantially increase the cost of drugs, delay or even deny patients' ability to obtain medically-effective treatment. FDA approval for each use would require substantial expenditure and time to undergo the clinical trials necessary to obtain FDA approval. This is particularly the case when a drug is off-patent and in generic production and, consequently, is available at a lower price. Once a drug is in generic production by multiple manufacturers, it is not economically feasible for a manufacturer to incur the cost of FDA approval.
(8) Reimbursement for off-label indications of FDA-approved drugs is necessary to conform to the way in which appropriate medical treatment is provided, to make needed drugs available to patients, and to contain health care costs. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
Section 38-71-275. (A) No insurance policy which provides coverage for drugs may exclude coverage of a drug for a particular indication on the ground that the drug has not been approved by the Federal Food and Drug Administration for that indication, if the drug is recognized for treatment of the indication in one of the standard reference compendia or in the medical literature or by the Director of the Department of Insurance.
(B) Coverage of a drug required by this section also shall include medically-necessary services associated with the administration of the drug.
(C) This section may not be construed to:
(1) alter existing law with regard to provisions limiting the coverage of drugs that have not been approved by the Federal Food and Drug Administration;
(2) require coverage for any drug when the Federal Food and Drug Administration has determined its use to be contraindicated;
(3) require coverage for experimental drugs not otherwise approved for any indication by the Federal Food and Drug Administration.
(D) The director may direct any person which issues an insurance policy to make payments required by this section.
(E) The director of the department shall create a panel of seven medical experts to review off-label uses not included in any of the three standard references or in the medical literature and to advise the director in these instances whether a particular off-label use is medically appropriate. The panel shall make recommendations from time to time and whenever a particular dispute about payment for off-label use is brought to the director. This seven-member panel shall include:
(1) three medical oncologists recommended by the South Carolina Medical Association;
(2) two specialists in the management of AIDS patients recommended by the Department of Health and Environmental Control;
(3) one specialist in heart disease recommended by the South Carolina Medical Association;
(4) one physician recommended by the South Carolina Medical Association.
(F) For purposes of this section:
(1) `Insurance policy' means an individual, group, or blanket policy written by a medical expense indemnity corporation, a hospital service corporation, a health care service plan contract, or a private insurance plan issued, amended, delivered, or renewed in this State or which provides insurance for residents of this State.
(2) `Standard reference compendia' means:
(a) the United States Pharmacopoeia Drug Information;
(b) the American Medical Association Drug Evaluations; or
(c) the American Hospital Formulary Service Drug Information.
(3) `Medical literature' means published scientific studies published in a peer-reviewed national professional journal."
SECTION 2. This act takes effect upon approval by the Governor.