SECTION 1. Chapter 40J of the General Laws, as most recently amended by Chapter 305 of the Acts of 2008, is hereby amended by inserting after section 6G the following section:-

Section 6H. (a) As used in this section, the following words shall have the following meanings:

“Electronic prescription system”, a computerized system that transmits medical prescriptions between physicians and pharmacists, records patients’ prescription drug history and alert physicians to possible drug interactions between prescribed medications, and contains patient’s health insurance benefit information.

“Pharmacy”, any retail drug business registered by the board of registration in pharmacy in accordance with chapter 112 that is authorized to dispense controlled substances, including, retail drug businesses as defined in section 1 of chapter 94C.

All pharmacies in the Commonwealth shall implement and utilize an electronic prescription system by January 1, 2012. All electronic health records systems shall be approved by the Massachusetts e-Health Institute, established in section 6D of this chapter and referred to as the Institute, and must be compatible with the statewide interoperable electronic health records network established by section 6D of this chapter, as most recently amended by Chapter 305 of the Acts of 2008. The Institute shall monitor the use of electronic prescription systems, inform physicians of the availability of systems in pharmacies and instruct physicians in the use of such systems. The Institute shall oversee the installation of electronic prescription systems so that they are compatible with existing physician electronic prescription systems.

Pharmacies may apply to the Institute for financial assistance. The Institute shall establish guidelines for the distribution of electronic prescription system installation grants; provided, however, that said guidelines shall provide: (i)  eligibility criteria based upon the applicant pharmacy’s annual revenue and profit, with the goal of providing grants to pharmacies for whom installing an electronic prescription system would impose an undue financial burden; (ii) grant awards which shall not exceed $2,000 for each eligible pharmacy; provided further that the total aggregate amount of grants awarded by the Institute shall not exceed two hundred thousand dollars, which must be expended before December 31, 2011. The funds for these grants shall be expended from the e-Health Institute Fund.