HOUSE DOCKET, NO. 2503 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 945
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Christine P. Barber and Jon Santiago
_________________
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 1/19/2023
Jon Santiago 9th Suffolk 1/19/2023
Lindsay N. Sabadosa 1st Hampshire 1/19/2023
Mindy Domb 3rd Hampshire 1/19/2023
Carmine Lawrence Gentile 13th Middlesex 1/25/2023
David Paul Linsky 5th Middlesex 1/26/2023
Lenny Mirra 2nd Essex 1/26/2023
Peter Capano 11th Essex 1/27/2023
Susannah M. Whipps 2nd Franklin 1/27/2023
Brian W. Murray 10th Worcester 1/29/2023
Jack Patrick Lewis 7th Middlesex 2/1/2023
Vanna Howard 17th Middlesex 2/1/2023
Patricia A. Duffy 5th Hampden 2/2/2023
Kevin G. Honan 17th Suffolk 2/3/2023
Jennifer Balinsky Armini 8th Essex 2/4/2023
David Henry Argosky LeBoeuf 17th Worcester 2/6/2023
Jason M. Lewis Fifth Middlesex 2/7/2023
Patrick M. O'Connor First Plymouth and Norfolk 2/8/2023
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Colleen M. Garry 36th Middlesex 2/13/2023
James C. Arena-DeRosa 8th Middlesex 2/13/2023
James B. Eldridge Middlesex and Worcester 2/16/2023
Kate Lipper-Garabedian 32nd Middlesex 2/22/2023
Natalie M. Higgins 4th Worcester 2/23/2023
Tram T. Nguyen 18th Essex 2/27/2023
Tommy Vitolo 15th Norfolk 3/15/2023
Samantha Montaño 15th Suffolk 3/25/2023
William J. Driscoll, Jr. 7th Norfolk 4/25/2023
Mike Connolly 26th Middlesex 4/28/2023
Jessica Ann Giannino 16th Suffolk 6/28/2023
Rebecca L. Rausch Norfolk, Worcester and Middlesex 7/7/2023
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 HOUSE DOCKET, NO. 2503 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 945
By Representatives Barber of Somerville and Santiago of Boston, a petition (accompanied by
bill, House, No. 945) of Christine P. Barber, Jon Santiago and others for legislation to ensure
prescription drug cost transparency and affordability. Financial Services.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
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 so appearing, is
2 hereby amended by inserting after the definition of “Alternative payment methodologies or
3 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 plan
54 authorized under sections 7, 10, 14, 15 or 20 of this chapter or under section 2GGGG of chapter
55 29 and shall not disclose the information or documents to any person without the consent of the
56 payer, provider or pharmaceutical manufacturing company providing or reporting the
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57 information or documents under said sections 7, 10, 14, 15, or 20 of this chapter or under said
58 section 2GGGG of said chapter 29, except in summary form in evaluative reports of such
59 activities or when the commission believes that such disclosure should be made in the public
60 interest after taking into account any privacy, trade secret or anticompetitive considerations. The
61 confidential information and documents shall not be public records and shall be exempt from
62 disclosure under clause Twenty sixth of section 7 of chapter 4 or section 10 of chapter 66.
63 SECTION 7. Section 6 of said chapter 6D, as so appearing, is hereby amended by
64 inserting after the word “center”, in line 1, the following words:- , pharmaceutical and
65 biopharmaceutical manufacturing company, pharmacy benefit manager.
66 SECTION 8. Said section 6 of said chapter 6D, as so appearing, is hereby further
67 amended by striking out, in lines 5 and 36, the figure “33” and inserting in place thereof, in each
68 instance, the following figure:- 25.
69 SECTION 9. Said section 6 of said chapter 6D, as so appearing, is hereby further
70 amended by adding the following paragraph:-
71 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
72 companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
73 appropriated by the general court for the expenses of the commission minus amounts collected
74 from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
75 dissemination of reports and information; and (iii) federal matching revenues received for these
76 expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical and
77 biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
78 and distribution determined by the commission, pay to the commonwealth an amount of the
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79 estimated expenses of the commission attributable to the commission’s activities under sections
80 8, 9 and 20. A pharmacy benefit manager that is a surcharge payor subject to the preceding
81 paragraph and manages its own prescription drug benefits shall not be subject to additional
82 assessment under this paragraph.
83 SECTION 10. Section 8 of said chapter 6D, as so appearing, is hereby amended by
84 inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
85 manager, pharmaceutical manufacturing company.
86 SECTION 11. Said section 8 of said chapter 6D, as so appearing, is hereby further
87 amended by inserting after the word “organizations”, in line 14, the following words:- ,
88 pharmacy benefit managers, pharmaceutical manufacturing companies.
89 SECTION 12. Said section 8 of said chapter 6D, as so appearing, is hereby further
90 amended by striking out, in line 32, the words “and (xi)” and inserting in place thereof the
91 following words:- (xi) at least 3 representatives of the pharmaceutical industry; (xii) at least 1
92 pharmacy benefit manager; and (xiii).
93 SECTION 13. Said section 8 of said chapter 6D, as so appearing, is hereby further
94 amended by inserting after the word “commission”, in line 59, the first time it appears, the
95 following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
96 manufacturing companies, testimony concerning factors underlying prescription drug costs and
97 price increases including, but not limited to, the initial prices of drugs coming to market and
98 subsequent price increases, changes in industry profit levels, marketing expenses, reverse
99 payment patent settlements, the impact of manufacturer rebates, discounts and other price
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100 concessions on net pricing, the availability of alternative drugs or treatments and any other
101 matters as determined by the commission.
102 SECTION 14. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
103 hereby amended by striking out the second sentence and inserting in place thereof the following
104 sentence:- The report shall be based on the commission’s analysis of information provided at the
105 hearings by witnesses, providers, provider organizations, payers, pharmaceutical manufacturing
106 companies and pharmacy benefit managers, registration data collected under section 11, data
107 collected or analyzed by the center under sections 8, 9, 10, and 10A of chapter 12C and any other
108 available information that the commission considers necessary to fulfill its duties under this
109 section as defined in regulations promulgated by the commission.
110 SECTION 15. Section 9 of said chapter 6D, as so appearing, is hereby amended by
111 inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
112 manager, pharmaceutical manufacturing company.
113 SECTION 16. Said chapter 6D, as so appearing, is hereby further amended by adding the
114 following section:
115 Section 20. (a) For the purposes of this section, “Manufacturer” shall mean an entity that
116 manufactures a pharmaceutical drug.
117 (b) The commission may require a manufacturer specified in subsection (c) to disclose to
118 the commission within a reasonable time information relating to the manufacturer’s pricing of
119 that drug, on a standard reporting form developed by the commission with the input of the
120 manufacturers, which includes, but shall not be limited to, the following:
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121 (1) A schedule of the drug’s wholesale acquisition cost increases over the previous 5
122 calendar years;
123 (2) The manufacturer’s aggregate, company-level research and development and other
124 relevant capital expenditures, including facility construction, for the most recent year for which
125 final audited data are available;
126 (3) A written, narrative description, suitable for public release, of factors that contributed
127 to reported changes in wholesale acquisition cost during the previous 5 calendar years; and
128 (4) Any other information that the manufacturer wishes to provide to the commission.
129 Based on the records furnished, the commission may identify a proposed value for a
130 prescribed drug specified in subsection (c). The Commission may request additional relevant
131 information that it deems necessary.
132 (c) A manufacturer of a drug for which the commission has received a referral from the
133 center under subsection (b) of section 25 of chapter 12C shall comply with the requirements set
134 forth in this section; provided that the commission may select or prioritize a subset of the
135 referred drugs for the commission’s review.
136 (d) Records disclosed by a manufacturer under this section shall: (i) be accompanied by
137 an attestation that all information provided is true and correct; (ii) not be public records under
138 section 7 of chapter 4 or chapter 66; and (iii) remain confidential; provided, however, that the
139 commission may produce reports summarizing any findings; provided that any such report shall
140 not be in a form that identifies specific prices charged for or rebate amounts associated with
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141 drugs by a manufacturer, or in a manner that is likely to compromise the financial, competitive or
142 proprietary nature of the information.
143 (e) If, after review of any records furnished to the commission under subsection (b), the
144 commission determines that the manufacturer’s pricing of the drug is potentially unreasonable or
145 excessive in relation to the commission’s proposed value under subsection (b), the commission
146 shall require that the manufacturer provide within 30 days further information related to the
147 pricing of the prescribed drug and the manufacturer’s justification for the pricing. In addition to
148 the manufacturer, the commission may identify other relevant parties including but not limited to
149 patients, providers, provider organizations and payers who may provide information to the
150 commission.
151 (f)