(1)    In this section:

      (a)    “Generic name” has the meaning given in s. 450.12 (1) (b).

      (b)    “Poverty line” means the nonfarm federal poverty line for the continental United States, as defined in 42 U.S. Code § 9902 (2).

      (c)    “Prescription drug” means any of the following:

         1.    A prescription drug, as defined in s. 450.01 (20), that is included in the drugs specified under s. 49.46 (2) (b) 6. h. and that is manufactured by a drug manufacturer that enters into a rebate agreement in force under sub. (6).

         2.    A vaccination recommended for administration to adults by the federal centers for disease control and prevention’s advisory committee on immunization practices and approved for administration to adults by the department.

      (d)    “Prescription order” has the meaning given in s. 450.01 (21).

      (e)    “Program payment rate” means the rate of payment made for the identical drug specified under s. 49.46 (2) (b) 6. h. plus a dispensing fee that is equal to the dispensing fee permitted to be charged for prescription drugs for which coverage is provided under s. 49.46 (2) (b) 6. h.

   (2)   

      (a)    A person to whom all of the following applies is eligible to purchase a prescription drug for the amounts specified in sub. (5) (a) 1. and 2.:

         1.    The person is a resident, as defined in s. 27.01 (10) (a), of this state.

         2.    The person is at least 65 years of age.

         3.    The person is not a recipient of medical assistance or, as a recipient, does not receive prescription drug coverage.

         4.    The person’s annual household income, as determined by the department, does not exceed 240 percent of the federal poverty line for a family the size of the person’s eligible family.

         5.    The person pays the program enrollment fee specified in sub. (3) (a).

      (b)    A person to whom par. (a) 1. to 3. and 5. applies, but whose annual household income, as determined by the department, exceeds 240 percent of the federal poverty line for a family the size of the persons’ eligible family, is eligible to purchase a prescription drug at the amounts specified in sub. (5) (a) 4. only during the remaining amount of any 12-month period in which the person has first paid the annual deductible specified in sub. (3) (b) 2. a. in purchasing prescription drugs at the retail price and has then paid the annual deductible specified in sub. (3) (b) 2. b.

   (3)   Program participants shall pay all of the following:

      (a)    For each 12-month benefit period, a program enrollment fee of $30.

      (b)   

         1.    For each 12-month benefit period, for a person specified in sub. (2) (a), a deductible for prescription drugs that is based on the percentage that a person’s annual household income, as determined by the department, is of the federal poverty line for a family the size of the person’s eligible family, as follows:

            a.    One hundred sixty percent or less, no deductible.

            b.    More than 160 percent, but not more than 200 percent, $500.

            c.    More than 200 percent, but not more than 240 percent, $850.

         2.    For each 12-month benefit period, for a person specified in sub. (2) (b), a deductible for prescription drugs that equals all of the following:

            a.    The difference between the person’s annual household income and 240 percent of the federal poverty line for a family the size of the person’s eligible family.

            b.    Eight hundred fifty dollars.

      (c)    After payment of any applicable deductible under par. (b), all of the following:

         1.    A copayment of $5 for each prescription drug that bears only a generic name.

         2.    A copayment of $15 for each prescription drug that does not bear only a generic name.

      (d)    If a person who is eligible under this section has other available coverage for payment of a prescription drug, this section applies only to costs for prescription drugs for the person that are not covered under the person’s other available coverage.

   (4)   The department shall devise and distribute a form for application for the program under sub. (2), shall determine eligibility for each 12-month benefit period of applicants and shall issue to eligible persons a prescription drug card for use in purchasing prescription drugs, as specified in sub. (5). The department shall promulgate rules that specify the criteria to be used to determine household income under sub. (2) (a) 4. and (b) and (3) (b) 1.

   (5)   

      (a)    Beginning on September 1, 2002, except as provided in sub. (7) (b), as a condition of participation by a pharmacy or pharmacist in the program under s. 49.45, 49.46, 49.47, or 49.471, the pharmacy or pharmacist may not charge a person who presents a valid prescription order and a card indicating that he or she meets eligibility requirements under sub. (2) an amount for a prescription drug under the order that exceeds the following:

         1.    For a deductible, as specified in sub. (3) (b) 1. and 2. b., the program payment rate.

         2.    After any applicable deductible under subd. 1. is charged, the copayment, as applicable, that is specified in sub. (3) (c) 1. or 2. No dispensing fee may be charged to a person under this subdivision.

         3.    For a deductible, as specified in sub. (3) (b) 2. a., the retail price.

         4.    After the deductible under subd. 3. is charged, the copayment, as applicable, that is specified in sub. (3) (c) 1. or 2. No dispensing fee may be charged to a person under this subdivision.

      (b)    The department shall calculate and transmit to pharmacies and pharmacists that are certified providers of medical assistance amounts that may be used in calculating charges under par. (a). The department shall periodically update this information and transmit the updated amounts to pharmacies and pharmacists.

   (6)   The department, or an entity with which the department contracts, shall provide to a drug manufacturer that sells drugs for prescribed use in this state documents designed for use by the manufacturer in entering into a rebate agreement with the department or entity that is modeled on the rebate agreement specified under 42 USC 1396r-8. A rebate agreement under this subsection shall include all of the following as requirements:

      (a)    That, except as provided in sub. (7) (b), the manufacturer shall make rebate payments for each prescription drug of the manufacturer that is prescribed for and purchased by persons who meet criteria under sub. (2) (a) and persons who meet criteria under sub. (2) (b) and have paid the deductible under sub. (3) (b) 2. a., to the secretary of administration to be credited to the appropriation account under s. 20.435 (4) (j), each calendar quarter or according to a schedule established by the department.

      (b)    That, except as provided in sub. (7) (b), the amount of the rebate payment shall be determined by a method specified in 42 USC 1396r-8 (c).

   (7)   

      (a)    Except as provided in par. (b), from the appropriation accounts under s. 20.435 (4) (bv), (j), and (pg), beginning on September 1, 2002, the department shall, under a schedule that is identical to that used by the department for payment of pharmacy provider claims under medical assistance, provide to pharmacies and pharmacists payments for prescription drugs sold by the pharmacies or pharmacists to persons eligible under sub. (2) who have paid the deductible specified under sub. (3) (b) 1. or 2. or who, under sub. (3) (b) 1., are not required to pay a deductible. The payment for each prescription drug under this paragraph shall be at the program payment rate, minus any copayment paid by the person under sub. (5) (a) 2. or 4., and plus, if applicable, incentive payments that are similar to those provided under s. 49.45 (8v). The department shall devise and distribute a claim form for use by pharmacies and pharmacists under this paragraph and may limit payment under this paragraph to those prescription drugs for which payment claims are submitted by pharmacists or pharmacies directly to the department. The department may apply to the program under this section the same utilization and cost control procedures that apply under rules promulgated by the department to medical assistance under subch. IV of ch. 49.

      (b)    During any period in which funding under s. 20.435 (4) (bv) and (pg) is completely expended for the payments specified in par. (a), the requirements of par. (a) and subs. (3) (c), (5), and (6) (a) and (b) do not apply to drugs purchased during that period, but the department shall continue to accept applications and determine eligibility under sub. (4) and shall indicate to applicants that the eligibility of program participants to purchase prescription drugs as specified in sub. (3), under the requirements of sub. (5), is conditioned on the availability of funding under s. 20.435 (4) (bv) and (pg).

   (8m)   The department shall obtain and share information about participants in the program under this section as provided in s. 49.475.

   (9)   

      (a)    The department shall promulgate rules relating to prohibitions on fraud that are substantially similar to applicable provisions under s. 946.91 (2).

      (b)    A person who is convicted of violating a rule promulgated by the department under par. (a) in connection with that person’s furnishing of prescription drugs under this section is guilty of a Class H felony, except that, notwithstanding the maximum fine specified in s. 939.50 (3) (h), the person may be fined not more than $25,000.

      (c)    A person other than a person specified in par. (b) who is convicted of violating a rule promulgated by the department under par. (a) may be fined not more than $10,000, or imprisoned in the county jail for not more than one year, or both.

   (10)   If federal law is amended to provide coverage for prescription drugs for outpatient care as a benefit under medicare or to provide similar coverage under another program, the department shall submit to appropriate standing committees of the legislature under s. 13.172 (3) a report that contains an analysis of the differences between such a federal program and the program under this section and that provides recommendations concerning alignment, if any, of the differences.

   (10m)   

      (a)    Notwithstanding subs. (6) and (7) (a), from the appropriation accounts under s. 20.435 (4) (bv), (j), and (pg), except as provided under sub. (7) (b), the department shall, under a schedule that is identical to that used by the department for payment of claims under the Medical Assistance program, provide to health care providers who administer vaccinations, including pharmacies and pharmacists, payments for vaccinations, as described under sub. (1) (c) 2., that are administered by health care providers to persons eligible under sub. (2) who have paid the deductible specified under sub. (3) (b) 1. or 2., or who, under sub. (3) (b) 1., are not required to pay a deductible. The reimbursement to a health care provider for each vaccination under this subsection shall be at the rate of payment made for the identical vaccination under s. 49.46 (2) (b), plus a dispensing fee that is equal to the dispensing fee permitted to be charged for vaccinations for which coverage is provided under s. 49.46 (2) (b). The department shall devise and distribute a claim form for use by health care providers under this subsection and may limit payment under this subsection to those vaccinations for which payment claims are submitted by health care providers directly to the department. The department may apply to the program under this subsection the same utilization and cost control procedures that apply under rules promulgated by the department to medical assistance under subch. IV of ch. 49.

      (b)    The department may provide payment for a vaccination under this subsection only after deducting the amount of any payment for the vaccination available from other sources.

   (11)   The department shall request from the federal secretary of health and human services a waiver, under 42 U.S. Code § 1315 (a), of federal medicaid laws necessary to permit the department of health services to conduct a project, under all of the requirements of this section, to expand eligibility for medical assistance, for purposes of receipt of prescription drugs as a benefit, to include individuals who are eligible under sub. (2). The department may implement a waiver requested under this subsection only if the conditions of the waiver are consistent with the requirements of this section. The department shall implement the program under this section regardless of whether a waiver, as specified in this subsection, is received.

   (12)   Except as provided in subs. (8m) to (11) and except for the department’s rule-making requirements and authority, the department may enter into a contract with an entity to perform the duties and exercise the powers of the department under this section.