HOUSE DOCKET, NO. 2948 FILED ON: 2/18/2021
HOUSE . . . . . . . . . . . . . . . No.
The Commonwealth of Massachusetts
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PRESENTED BY:
Christine P. Barber and Jon Santiago
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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to ensure prescription drug cost transparency and affordability.
_______________
PETITION OF:
NAME: DISTRICT/ADDRESS: DATE ADDED:
Christine P. Barber 34th Middlesex 2/18/2021
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 HOUSE DOCKET, NO. 2948 FILED ON: 2/18/2021
HOUSE . . . . . . . . . . . . . . . No.
[Pin Slip]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Second General Court
(2021-2022)
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An Act to ensure prescription drug cost transparency and affordability.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 1 of chapter 6D of the General Laws, as appearing in the 2018
2 Official Edition, is hereby amended by inserting after the definition of “Alternative payment
3 methodologies or methods” the following 2 definitions:-
4 “Biosimilar”, a drug that is produced or distributed pursuant to a biologics license
5 application approved under 42 U.S.C. 262(k)(3).
6 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
7 drug application approved under 21 U.S.C. 355(c) except for an authorized generic as defined by
8 42 C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application
9 approved under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand
10 name drug based on available data resources such as Medi-Span.
11 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
12 amended by inserting after the definition of “Fiscal year” the following definition:-
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13 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
14 abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic as
15 defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962 and
16 was not originally marketed under a new drug application; or (iv) identified by the health benefit
17 plan as a generic drug based on available data resources such as Medi-Span.
18 SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further
19 amended by striking out, in line 189, the words “not include excludes ERISA plans” and
20 inserting in place thereof the following words:- include self-insured plans to the extent allowed
21 under the federal Employee Retirement Income Security Act of 1974.
22 SECTION 4. Said section 1 of said chapter 6D, as so appearing, is hereby further
23 amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
24 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
25 preparation, propagation, compounding, conversion or processing of prescription drugs, directly
26 or indirectly, by extraction from substances of natural origin, independently by means of
27 chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
28 repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
29 “pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
30 under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
31 chapter 112.
32 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
33 directly or through a subsidiary provides pharmacy benefit management services for prescription
34 drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
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35 insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
36 management services shall include, but not be limited to, the processing and payment of claims
37 for prescription drugs, the performance of drug utilization review, the processing of drug prior
38 authorization requests, pharmacy contracting, the adjudication of appeals or grievances related to
39 prescription drug coverage contracts, formulary administration, drug benefit design, mail and
40 specialty drug pharmacy services, cost containment, clinical, safety and adherence programs for
41 pharmacy services and managing the cost of covered prescription drugs; provided further, that
42 “pharmacy benefit manager” shall include a health benefit plan that does not contract with a
43 pharmacy benefit manager and manages its own prescription drug benefits unless specifically
44 exempted by the commission.
45 SECTION 5. Said section 1 of said chapter 6D, as so appearing, is hereby further
46 amended by adding the following definition:-
47 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
48 1395w-3a(c)(6)(B).
49 SECTION 6. Said chapter 6D is hereby further amended by striking out section 2A, as so
50 appearing, and inserting in place thereof the following section:-
51 Section 2A. The commission shall keep confidential all nonpublic clinical, financial,
52 strategic or operational documents or information provided or reported to the commission in
53 connection with any care delivery, quality improvement process, performance improvement
54 plan, or affordability improvement plan activities authorized under sections 7, 10, 14, 15, 20 or
55 21 of this chapter or under section 2GGGG of chapter 29 and shall not disclose the information
56 or documents to any person without the consent of the payer, provider or pharmaceutical
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57 manufacturing company providing or reporting the information or documents under said sections
58 7, 10, 14, 15, 20 or 21 of this chapter or under said section 2GGGG of said chapter 29, except in
59 summary form in evaluative reports of such activities or when the commission believes that such
60 disclosure should be made in the public interest after taking into account any privacy, trade
61 secret or anticompetitive considerations. The confidential information and documents shall not
62 be public records and shall be exempt from disclosure under clause Twenty sixth of section 7 of
63 chapter 4 or section 10 of chapter 66.
64 SECTION 7. Section 6 of said chapter 6D, as so appearing, is hereby amended by
65 inserting after the word “center”, in line 1, the following words:- , pharmaceutical and
66 biopharmaceutical manufacturing company, pharmacy benefit manager.
67 SECTION 8. Said section 6 of said chapter 6D, as so appearing, is hereby further
68 amended by striking out, in lines 5 and 36, the figure “33” and inserting in place thereof, in each
69 instance, the following figure:- 25.
70 SECTION 9. Said section 6 of said chapter 6D, as so appearing, is hereby further
71 amended by adding the following paragraph:-
72 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
73 companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
74 appropriated by the general court for the expenses of the commission minus amounts collected
75 from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
76 dissemination of reports and information; and (iii) federal matching revenues received for these
77 expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical and
78 biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
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79 and distribution determined by the commission, pay to the commonwealth an amount of the
80 estimated expenses of the commission attributable to the commission’s activities under sections
81 8, 9, 20 and 21. A pharmacy benefit manager that is a surcharge payor subject to the preceding
82 paragraph and manages its own prescription drug benefits shall not be subject to additional
83 assessment under this paragraph
84 SECTION 10. Section 8 of said chapter 6D, as so appearing, is hereby amended by
85 inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
86 manager, pharmaceutical manufacturing company.
87 SECTION 11. Said section 8 of said chapter 6D, as so appearing, is hereby further
88 amended by inserting after the word “organizations”, in line 14, the following words:- ,
89 pharmacy benefit managers, pharmaceutical manufacturing companies.
90 SECTION 12. Said section 8 of said chapter 6D, as so appearing, is hereby further
91 amended by striking out, in line 32, the words “and (xi)” and inserting in place thereof the
92 following words:- (xi) at least 3 representatives of the pharmaceutical industry; (xii) at least 1
93 pharmacy benefit manager; and (xiii).
94 SECTION 13. Said section 8 of said chapter 6D, as so appearing, is hereby further
95 amended by inserting after the word “commission”, in line 59, the first time it appears, the
96 following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
97 manufacturing companies, testimony concerning factors underlying prescription drug costs and
98 price increases including, but not limited to, the initial prices of drugs coming to market and
99 subsequent price increases, changes in industry profit levels, marketing expenses, reverse
100 payment patent settlements, the impact of manufacturer rebates, discounts and other price
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101 concessions on net pricing, the availability of alternative drugs or treatments and any other
102 matters as determined by the commission.
103 SECTION 14. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
104 hereby amended by striking out the second sentence and inserting in place thereof the following
105 sentence:- The report shall be based on the commission’s analysis of information provided at the
106 hearings by witnesses, providers, provider organizations, payers, pharmaceutical manufacturing
107 companies and pharmacy benefit managers, registration data collected under section 11, data
108 collected or analyzed by the center under sections 8, 9, 10, and 10A of chapter 12C and any other
109 available information that the commission considers necessary to fulfill its duties under this
110 section as defined in regulations promulgated by the commission.
111 SECTION 15. Section 9 of said chapter 6D, as so appearing, is hereby amended by
112 inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
113 manager, pharmaceutical manufacturing company.
114 SECTION 16. Said chapter 6D is hereby further amended by adding the following 2
115 sections:-
116 Section 20. (a) As used in this section, the following words shall have the following
117 meanings unless the context clearly requires otherwise:
118 “Manufacturer”, a pharmaceutical manufacturer of an eligible drug.
119 “Public health essential drug”, shall have the same meaning as defined in subsection (f)
120 of section 13 of chapter 17.
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121 (b) The commission shall develop criteria to identify eligible drugs for the purposes of
122 this section based on the following categories and considerations:
123 (1) brand name drugs or biologics that have a launch wholesale acquisition cost
124 exceeding a specified amount, as determined by the commission, for a 1-year supply or full
125 course of treatment;
126 (2) biosimilar drug that has a launch wholesale acquisition cost that exceeds a specified
127 amount, as determined by the commission; or
128 (3) public health essential drug, as defined in subsection (f) of section 13 of chapter 17,
129 with a significant price increase over a defined period of time, as determined by the commission,
130 or with a wholesale acquisition cost exceeding a specified amount for a 1-year supply or full
131 course of treatment, as determined by the commission.
132 The criteria for identifying eligible drugs shall be in effect for a term of 5 years. The
133 commission shall conduct a review of the established criteria in the fourth year of the criteria’s
134 application. Based on the review, the commission may amend the criteria to be effective for the
135 next 5-year term.
136 (c) A manufacturer of an eligible drug for which the commission has received a referral
137 from the center under subsection (b) of section 24 of chapter 12C shall comply with the
138 requirements set forth in this section, provided that the commission may select or prioritize a
139 subset of the referred drugs for the commission’s review.
140 (d) The commission may require a manufacturer specified in subsection (c) to disclose to
141 the commission within a reasonable time information relating to the manufacturer’s pricing of an
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142 eligible drug, on a standard reporting form developed by the commission with the input of the
143 manufacturers, which includes but shall not be limited to, the following: (1) A schedule of the
144 drug’s wholesale acquisition cost increases over the previous five calendar years; (2) The
145 manufacturer’s aggregate, company-level research and development and other relevant capital
146 expenditures, including facility construction, for the most recent year for which final audited data
147 are available; (3) A written, narrative description, suitable for public release, of factors that
148 contributed to reported changes in wholesale acquisition cost during the previous five calendar
149 years; and (4) Any other information that the manufacturer wishes to provide to the commission.
150 Based on the records furnished under subsection (d) and available information from the
151 center for health information and analysis or an outside third party, the commission shall identify
152 a proposed value of the eligible drug. The commission may request additional relevant
153 information that it deems necessary to identify a proposed value of the drug.
154 (e) Records disclosed by a manufacturer under this section shall: (1) be accompanied by
155 an attestation that all information provided is true and correct; (2) not be public records under
156 section 7 of chapter 4 or chapter 66; and (3) remain confidential; provided, however, that the
157 commission may produce reports summarizing any findings; provided that any such report shall
158 not be in a form that identifies specific prices charged for or rebate amounts associated with
159 drugs by a manufacturer, or in a manner that is likely to compromise the financial, competitive or
160 proprietary nature of the information.
161 (f) If, after review of any records furnished to the commission under subsection (c), the
162 commission determines that the manufacturer’s pricing of the eligible drug is potentially
163 unreasonable or excessive in relation to the commission’s proposed value under subsection (c),
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164 the commission shall, with 30 days’ advance notice to the manufacturer, request that the
165 manufacturer provide further information related to the pricing of the prescribed drug and the
166 manufacturer’s justification for the pricing. In addition to the manufacturer, the commission shall
167 identify whether other relevant parties, including but not limited to patients, providers, provider
168 organizations, organizations representing impacted communities, and payers, would be impacted
169 by a change in the cost or availability of the eligible drug. If the commission determines that
170 these entities would be impacted, it shall then convene opportunities for verbal and written
171 testimony related to the value of the eligible drug and shall incorporate this information into its
172 determination. The assessment methodology used by the commission shall allow for public input
173 to meaningfully impact the commission’s final proposed value.
174 (g) Any information, analyses or reports regarding a particular drug reviewed or used in
175 assessing the proposed value of the eligible drug shall be provided to the manufacturer for
176 review and input. The commission shall consider any clarifications or data provided by the
177 manufacturer with respect to its drug. The commission may not base its determination on the
178 proposed value or the reasonableness of the drug pricing solely on the analysis or research of an
179 outside third party, and may not assign a lower proposed value to an eligible drug based upon the
180 race, ethnicity, gender, age, or disability status of the patients who would likely use it.