HOUSE DOCKET, NO. 1404 FILED ON: 1/18/2023
HOUSE . . . . . . . . . . . . . . . No. 1215
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
John J. Lawn, Jr.
_________________
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 relative to pharmacy benefit managers.
_______________
PETITION OF:
NAME: DISTRICT/ADDRESS: DATE ADDED:
John J. Lawn, Jr. 10th Middlesex 1/18/2023
Steven Owens 29th Middlesex 1/31/2023
Michael J. Finn 6th Hampden 1/31/2023
Smitty Pignatelli 3rd Berkshire 1/31/2023
William J. Driscoll, Jr. 7th Norfolk 1/31/2023
Christopher Hendricks 11th Bristol 1/31/2023
Lindsay N. Sabadosa 1st Hampshire 2/2/2023
Vanna Howard 17th Middlesex 2/2/2023
Carmine Lawrence Gentile 13th Middlesex 4/4/2023
Carole A. Fiola 6th Bristol 6/27/2023
Tommy Vitolo 15th Norfolk 6/27/2023
Mindy Domb 3rd Hampshire 10/20/2023
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 HOUSE DOCKET, NO. 1404 FILED ON: 1/18/2023
HOUSE . . . . . . . . . . . . . . . No. 1215
By Representative Lawn of Watertown, a petition (accompanied by bill, House, No. 1215) of
John J. Lawn, Jr., and others relative to pharmacy benefit managers. Health Care Financing.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act relative to pharmacy benefit managers.
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. Said section 1 of said chapter 6D , as so appearing, is hereby further
2 amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
3 “Pharmacy benefit manager”, as defined in section 1 of chapter 176X
4 “Pharmacy benefit services”, as defined in section 1 of chapter 176X
5 SECTION 2. Section 4 of said chapter 6D , as so appearing, is hereby amended by
6 striking out, in lines 6 and 7, the word “manufacturers” and inserting in place thereof the
7 following words:- pharmacy benefit managers.
8 SECTION 3. Section 6 of said chapter 6D , as so appearing, is hereby amended by adding
9 the following paragraph:-
10 If the analysis of spending trends with respect to the pharmaceutical or biopharmaceutical
11 products increases the expenses of the commission, the estimated increases in the commission’s
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12 expenses shall be assessed fully to pharmacy benefit managers in the same manner as the
13 assessment pursuant to section 68 of chapter 118E. A pharmacy benefit manager that is a
14 surcharge payor subject to the preceding paragraph and administers its own prescription drug,
15 prescription device or pharmacist services or prescription drug and device and pharmacist
16 services portion shall not be subject to additional assessment under this paragraph.
17 SECTION 4. Section 8 of said chapter 6D , as so appearing, is hereby amended by
18 inserting after the word “organization” , in lines 6 and 7, the following words:- , pharmacy
19 benefit manager.
20 SECTION 5. Said section 8 of said chapter 6D , as so appearing, is hereby further
21 amended by inserting after the word “organizations”, in line 14, the following words:- ,
22 pharmacy benefit managers.
23 SECTION 6. Said section 8 of said chapter 6D , as so appearing, is hereby further
24 amended by striking out, in lines 32 and 33 , the words “and (xi) any witness identified by the
25 attorney general or the center” and inserting in place thereof the following words:- (xi) 2
26 pharmacy benefit managers; and (xii) any witness identified by the attorney general or the center.
27 SECTION 7. Subsection (g) of said section 8 of said chapter 6D , as so appearing, is
28 hereby further amended by striking out the second sentence and inserting in place thereof the
29 following sentence:- The report shall be based on the commission's analysis of information
30 provided at the hearings by witnesses, providers, provider organizations, insurers and pharmacy
31 benefit managers, registration data collected pursuant to section 11, data collected or analyzed by
32 the center pursuant to sections 8, 9, 10,10A and 10B of chapter 12C and any other available
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33 information that the commission considers necessary to fulfill its duties in this section, as defined
34 in regulations promulgated by the commission.
35 SECTION 8. Section 9 of said chapter 6D , as so appearing, is hereby amended by
36 inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
37 manager.
38 SECTION 9. Said Section 9 of said chapter 6D , as so appearing, is hereby further
39 amended by inserting after the word “organizations”, in line 82, the following words:- ,
40 pharmacy benefit manager.
41 SECTION 10. Section 1 of chapter 12C of the General Laws, as appearing in the 2018
42 Official Edition, is hereby amended by inserting after the definition of “Patient-centered medical
43 home” the following 5 definitions:-
44 “Pharmaceutical manufacturing company”, any entity engaged in the production,
45 preparation, propagation, compounding, conversion or processing of prescription drugs, either
46 directly or indirectly, by extraction from substances of natural origin, or independently by means
47 of chemical synthesis or by a combination of extraction and chemical synthesis, or any entity
48 engaged in the packaging, repackaging, labeling, relabeling or distribution of prescription drugs;
49 provided however, that “pharmaceutical manufacturing company” shall not include a wholesale
50 drug distributor licensed pursuant to section 36A of chapter 112 or a retail pharmacist registered
51 pursuant to section 38 of said chapter 112.
52 “Pharmacy benefit manager”, any person, business, or entity, however organized, that
53 administers, either directly or through its subsidiaries, pharmacy benefit services for prescription
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54 drugs and devices on behalf of health benefit plan sponsors, including, but not limited to, self-
55 insured employers, insurance companies and labor unions;
56 “Pharmacy benefit services” shall include, but not be limited to, formulary
57 administration; drug benefit design; pharmacy network contracting; pharmacy claims processing;
58 mail and specialty drug pharmacy services; and cost containment, clinical, safety, and adherence
59 programs for pharmacy services. For the purposes of this section, a health benefit plan that does
60 not contract with a pharmacy benefit manager shall be a pharmacy benefit manager, unless
61 specifically exempted.
62 “Wholesale acquisition cost”, the cost of a prescription drug as defined in 42 U.S.C.
63 §1395w-3a(c)(6)(B).
64 SECTION 11. Section 3 of said chapter 12C , as so appearing, is hereby amended by
65 inserting after the word “organizations”, in lines 13 and 14, the following words:- , pharmacy
66 benefit managers.
67 SECTION 12. Section 5 of said chapter 12C , as so appearing, is hereby amended by
68 inserting after the word “organizations”, in line 11, the following words:- , pharmacy benefit
69 managers.
70 SECTION 13. Said section 5 of said chapter 12C , as so appearing, is hereby further
71 amended by inserting after the word “providers”, in line 15, the following words:- , affected
72 pharmacy benefit managers.
73 SECTION 14. Section 7 of said chapter 12C , as so appearing, is hereby further amended
74 by adding the following paragraph:-
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75 To the extent that the analysis and reporting activities pursuant to section 10A increases
76 the expenses of the center, the estimated increase in the center’s expenses shall be fully assessed
77 to pharmacy benefit managers in the same manner as the assessment pursuant to section 68 of
78 chapter 118E.
79 SECTION 15. Said chapter 12C is hereby further amended by inserting after section 10
80 the following section:-
81 Section 10A . The center shall promulgate regulations necessary to ensure the uniform
82 analysis of information regarding pharmacy benefit managers that enables the center to analyze:
83 (1) year-over-year wholesale acquisition cost changes; (2) year-over-year trends in formulary,
84 maximum allowable costs list and cost-sharing design, including the establishment and
85 management of specialty product lists; (3) aggregate information regarding discounts,
86 utilizations limits, rebates, manufacturer administrative fees and other financial incentives or
87 concessions related to pharmaceutical products or formulary programs; (4) information regarding
88 the aggregate amount of payments made to pharmacies owned or controlled by the pharmacy
89 benefit managers and the aggregate amount of payments made to pharmacies that are not owned
90 or controlled by the pharmacy benefit managers; and (5) additional information deemed
91 reasonable and necessary by the center as set forth in the center’s regulations.
92 SECTION 16. Section 11 of said chapter 12C , as so appearing, is hereby amended by
93 striking out the first sentence and inserting in place thereof the following sentence:-
94 The center shall ensure the timely reporting of information required pursuant to sections
95 8, 9, 10 and 10A.
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 96 SECTION 17. Said section 11 of said chapter 12C , as so appearing, is hereby further
97 amended by striking out, in line 11, the figure “$1,000” and inserting in place thereof the
98 following figure:- $5,000.
99 SECTION 18. Said section 11 of said chapter 12C , as so appearing, is hereby further
100 amended by striking out, in line 16, the figure “$50,000” and inserting in place thereof the
101 following figure:- $200,000.
102 SECTION 19. Section 12 of said chapter 12C, as so appearing, is hereby amended by
103 striking out, in line 2, the words “9 and 10” and inserting in place thereof the following words:-
104 9, 10 and 10A
105 SECTION 20. Subsection (a) of section 16 of said chapter 12C , as so appearing, is
106 hereby amended by striking out the first sentence and inserting in place thereof the following
107 sentence:- The center shall publish an annual report based on the information submitted pursuant
108 to sections 8, 9, 10, 10A and 10B concerning health care provider, provider organization,
109 pharmacy benefit manager and private and public health care payer costs and cost and price
110 trends, pursuant to section 13 of chapter 6D relative to market impact reviews and pursuant to
111 section 15 relative to quality data.
112 SECTION 21. Chapter 94C is hereby further amended by inserting after section 21B the
113 following section:-
114 Section 21C. (a) For the purposes of this section, the following words shall, unless the
115 context clearly requires otherwise, have the following meanings:-
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116 “Cost sharing”, amounts owed by a consumer under the terms of the consumer’s health
117 benefit plan as defined in section 1 of chapter 176O or as required by a pharmacy benefit
118 manager as defined in section 1 of chapter 6D.
119 “Pharmacy retail price”, the amount an individual would pay for a prescription
120 medication at a pharmacy if the individual purchased that prescription medication at that
121 pharmacy without using a health benefit plan as defined in section 1 of chapter 176O or any
122 other prescription medication benefit or discount.
123 “Registered pharmacist”, a pharmacist who holds a valid certificate of registration issued
124 by the board of registration in pharmacy pursuant to section 24 of chapter 112.
125 (b) A pharmacy shall post a notice informing consumers that a consumer may request, at
126 the point of sale, the current pharmacy retail price for each prescription medication the consumer
127 intends to purchase. If the consumer’s cost-sharing amount for a prescription medication exceeds
128 the current pharmacy retail price, the pharmacist, or an authorized individual at the direction of a
129 pharmacist, shall notify the consumer that the pharmacy retail price is less than the patient’s cost-
130 sharing amount. The pharmacist shall charge the consumer the applicable cost-sharing amount or
131 the current pharmacy retail price for that prescription medication, as directed by the consumer.
132 A pharmacist shall not be subject to a penalty by the board of registration in pharmacy or
133 a third party for failure to comply with this section.
134 (c) A contractual obligation shall not prohibit a pharmacist from complying with this
135 section; provided however, that a pharmacist shall submit a claim to the consumer’s health
136 benefit plan or its pharmacy benefit manager if the pharmacist has knowledge that the
137 prescription medication is covered under the consumer’s health benefit plan.
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138 (d) Failure to post notice pursuant to subsection (b) shall be an unfair or deceptive act of
139 practice under chapter 93A.
140 SECTION 22 Section 226 of chapter 175 is hereby repealed.
141 SECTION 23. The General Laws are hereby amended by inserting after Chapter 176W
142 the following chapter:-
143 Chapter 176X
144 Section 1 . As used in this chapter, the following words shall have the following
145 meanings, unless the context clearly requires otherwise:-
146 “Carrier”, as defined in section 1 of chapter 176O “Commissioner”, the commissioner of
147 the division of insurance.
148 “Cost-sharing requirement”, any copayment, coinsurance, deductible, or annual limitation
149 on cost-sharing (including a limitation subject to 42 U.S.C. §§ 18022(c) and 300gg-6(b)),
150 required by or on behalf of an insured in order to receive specific health care services, including
151 a prescription drug, covered by a health benefit plan .
152 “Division”, the division of insurance.
153 “Health benefit plan”, as defined in section 1 of chapter 176O
154 “Health care services”, supplies, care and services of a medical, surgical, optometric,
155 dental, podiatric, chiropractic, psychiatric, therapeutic, diagnostic, preventative, rehabilitative,
156 supportive, or geriatric nature including, but not limited to, inpatient and outpatient acute
157 hospital care and services, services provided by a community health center or by a sanatorium, as
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158 included in the definition of “hospital” in Title XVIII of the federal Social Security Act, and
159 treatment and care compatible with such services or by a health maintenance organization.
160 “Insured”, an enrollee, covered person, insured, member, policyholder or subscriber of a
161 carrier, including an individual whose eligibility as an insured of a carrier is in dispute or under
162 review, or any other individual whose care may be subject to review by a utilization review
163 program or entity as described under other provisions of this chapter.
164 “Mail order pharmacy”, a pharmacy whose primary business is to receive prescriptions
165 by mail, telefax or through electronic submissions and to dispense medication to insureds
166 through the use of the United States mail or other common or contract carrier services and that
167 provides any consultation with patients electronically rather than face to face.“Network”, as
168 defined in section 1 of chapter 176O.
169 “Network pharmacy”, a retail or other licensed pharmacy provider that contracts with a
170 pharmacy benefit manager.
171 “Person”, a natural person, corporation, mutual company, unincorporated association,
172 partnership, joint venture, limited liability company, trust, estate, foundation, not-for-profit
173 corporation, unincorporated organization, government or governmental subdivision or agency.
174 “Pharmacy”, a facility, either physical or electronic, under the direction or supervision of
175 a registered pharmacist which is authorized to dispense prescription drugs and has entered into a
176 network contract with a pharmacy benefit manager