SENATE . . . . . . . . . . . . . . No. 2520
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Second General Court
(2021-2022)
_______________
SENATE, November 15, 2023.
The committee on Senate Bills in the Third Reading to whom was referred the Senate
Bill relative to pharmaceutical access, costs and transparency (Senate, No. 2499, amended);
reports, recommending that the same be amended as follows, and that, when so amended, it will
be correctly drawn:-- by substituting a new with the same title (Senate, No. 2520).
For the committee,
Sal N. DiDomenico
 FILED ON: 11/15/2023
SENATE . . . . . . . . . . . . . . No. 2520
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act relative to pharmaceutical access, costs and transparency.
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 2022
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 under a biologics license application
5 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: (a) any drug approved through an
8 application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
9 is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
10 Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
11 application that was approved by the United States Secretary of Health and Human Services
12 under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
13 date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
1 of 100
14 1984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 42
15 C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
16 under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the carrier as a brand name drug based on
17 available data resources such as Medi-Span.
18 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
19 amended by inserting after the definition of “Disproportionate share hospital” the following
20 definition:-
21 “Early notice”, advanced notification by a pharmaceutical manufacturing company of a:
22 (i) new drug, device or other product coming to market; or (ii) a price increase, as described in
23 subsection (b) of section 15A.
24 SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further
25 amended by inserting after the definition of “Fiscal year” the following definition:-
26 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
27 abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
28 drug as defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
29 and was not originally marketed under a new drug application; or (iv) identified by the carrier as
30 a generic drug based on available data resources such as Medi-Span.
31 SECTION 4. Said section 1 of said chapter 6D, as so appearing, is hereby further
32 amended by striking out, in line 189, the words “not include excludes ERISA plans” and
33 inserting in place thereof the following words:- include self-insured plans to the extent allowed
34 under the federal Employee Retirement Income Security Act of 1974.
2 of 100
35 SECTION 5. Said section 1 of said chapter 6D, as so appearing, is hereby further
36 amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
37 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
38 preparation, propagation, compounding, conversion or processing of prescription drugs, directly
39 or indirectly, by extraction from substances of natural origin, independently by means of
40 chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
41 repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
42 “pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
43 under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
44 chapter 112.
45 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
46 directly or through a subsidiary provides pharmacy benefit management services for prescription
47 drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
48 insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
49 management services shall include, but not be limited to: (i) the processing and payment of
50 claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
51 of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
52 grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
53 drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
54 clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
55 covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
56 health benefit plan sponsor that does not contract with a pharmacy benefit manager and manages
57 its own prescription drug benefits unless specifically exempted by the commission.
3 of 100
58 SECTION 6. Said section 1 of said chapter 6D, as so appearing, is hereby further
59 amended by inserting after the definition of “Physician” the following definition:-
60 “Pipeline drug”, a prescription drug product containing a new molecular entity for which
61 the sponsor has submitted a new drug application or biologics license application and received an
62 action date from the United States Food and Drug Administration.
63 SECTION 7. Said section 1 of said chapter 6D, as so appearing, is hereby further
64 amended by adding the following definition:-
65 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
66 1395w-3a(c)(6)(B).
67 SECTION 8. Said chapter 6D is hereby further amended by striking out section 2A, as so
68 appearing, and inserting in place thereof the following section:-
69 Section 2A. The commission shall keep confidential all nonpublic clinical, financial,
70 strategic or operational documents or information provided or reported to the commission in
71 connection with any care delivery, quality improvement process, performance improvement
72 plan, early notification or access and affordability improvement plan activities authorized under
73 sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under section 2GGGG of chapter 29 and
74 shall not disclose the information or documents to any person without the consent of the entity
75 providing or reporting the information or documents under said sections 7, 10, 14, 15, 15A, 20 or
76 21 of this chapter or under said section 2GGGG of said chapter 29, except in summary form in
77 evaluative reports of such activities or when the commission believes that such disclosure should
78 be made in the public interest after taking into account any privacy, trade secret or
79 anticompetitive considerations. The confidential information and documents shall not be public
4 of 100
80 records and shall be exempt from disclosure under clause Twenty-sixth of section 7 of chapter 4
81 or under chapter 66.
82 SECTION 9. Section 4 of said chapter 6D, as so appearing, is hereby amended by
83 striking out, in line 8, the word “manufacturers” and inserting in place thereof the following
84 words:- manufacturing companies, pharmacy benefit managers.
85 SECTION 10. Section 6 of said chapter 6D, as so appearing, is hereby amended by
86 inserting after the word “center”, in line 1, the following words:- , pharmaceutical and
87 biopharmaceutical manufacturing company, pharmacy benefit manager.
88 SECTION 11. Said section 6 of said chapter 6D, as so appearing, is hereby further
89 amended by striking out, in lines 5 and 36, the figure “33” and inserting in place thereof, in each
90 instance, the following figure:- 25.
91 SECTION 12. Said section 6 of said chapter 6D, as so appearing, is hereby further
92 amended by adding the following paragraph:-
93 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
94 companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
95 appropriated by the general court for the expenses of the commission minus amounts collected
96 from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
97 dissemination of reports and information; and (iii) federal matching revenues received for these
98 expenses or received retroactively for expenses of predecessor agencies. A pharmacy benefit
99 manager that is a surcharge payor subject to the preceding paragraph and manages its own
100 prescription drug benefits shall not be subject to additional assessment under this paragraph.
5 of 100
101 SECTION 13. Section 8 of said chapter 6D, as so appearing, is hereby amended by
102 inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
103 manager, pharmaceutical manufacturing company.
104 SECTION 14. Said section 8 of said chapter 6D, as so appearing, is hereby further
105 amended by inserting after the word “organizations”, in line 15, the following words:- ,
106 pharmacy benefit managers, pharmaceutical manufacturing companies.
107 SECTION 15. Said section 8 of said chapter 6D, as so appearing, is hereby further
108 amended by striking out, in line 33, the words “and (xi)” and inserting in place thereof the
109 following words:- (xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least
110 1 representative of the pharmacy benefit management industry; and (xiii).
111 SECTION 16. Said section 8 of said chapter 6D, as so appearing, is hereby further
112 amended by striking out, in line 49, the first time it appears, the word:- and.
113 SECTION 17. Said section 8 of said chapter 6D, as so appearing, is hereby further
114 amended by inserting after the word “commission”, in line 60, the first time it appears, the
115 following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
116 manufacturing companies, testimony concerning factors underlying prescription drug costs and
117 price changes including, but not limited to, the initial prices of drugs coming to market and
118 subsequent price changes, changes in industry profit levels, marketing expenses, reverse payment
119 patent settlements, the impact of manufacturer rebates, discounts and other price concessions on
120 net pricing, the availability of alternative drugs or treatments, corporate ownership organizational
121 structure and any other matters as determined by the commission.
6 of 100
122 SECTION 18. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
123 hereby amended by striking out the second sentence and inserting in place thereof the following
124 2 sentences:- The report shall be based on the commission’s analysis of information provided at
125 the hearings by witnesses, providers, provider organizations, payers, pharmaceutical
126 manufacturing companies and pharmacy benefit managers, registration data collected under
127 section 11, data collected or analyzed by the center under sections 8, 9, 10 and 10A of chapter
128 12C and any other available information that the commission considers necessary to fulfill its
129 duties under this section as defined in regulations promulgated by the commission. To the extent
130 practicable, the report shall not contain any data that is likely to compromise the financial,
131 competitive or proprietary nature of the information.
132 SECTION 19. Section 9 of said chapter 6D, as so appearing, is hereby amended by
133 inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
134 manager, pharmaceutical manufacturing company.
135 SECTION 20. Said chapter 6D is hereby further amended by inserting after section 15
136 the following section:-
137 Section 15A. (a) A pharmaceutical manufacturing company shall provide early notice to
138 the commission in a manner described in this section for a: (i) pipeline drug; (ii) generic drug; or
139 (iii) biosimilar drug. The commission shall provide nonconfidential information received under
140 this section to the office of Medicaid, the division of insurance and the group insurance
141 commission.
142 Early notice under this subsection shall be submitted to the commission in writing not
143 later than 30 days after receipt of the United States Food and Drug Administration approval date.
7 of 100
144 For each pipeline drug, early notice shall include a brief description of the: (i) primary
145 disease, health condition or therapeutic area being studied and the indication; (ii) route of
146 administration being studied; (iii) clinical trial comparators; and (iv) estimated date of market
147 entry. To the extent possible, information shall be collected using data fields consistent with
148 those used by the federal National Institutes of Health for clinical trials.
149 For each pipeline drug, early notice shall include whether the drug has been designated
150 by the United States Food and Drug Administration: (i) as an orphan drug; (ii) for fast track; (iii)
151 as a breakthrough therapy; (iv) for accelerated approval; or (v) for priority review for a new
152 molecular entity; provided, however, that notwithstanding clause (v), submissions for drugs in
153 development that are designated as new molecular entities by the United States Food and Drug
154 Administration shall be provided as soon as practical upon receipt of the relevant designations.
155 For each generic drug, early notice shall include a copy of the drug label approved by the United
156 States Food and Drug Administration.
157 (b) A pharmaceutical manufacturing company shall provide early notice to the
158 commission if it plans to increase the wholesale acquisition cost of a: (i) brand-name drug by
159 more than 15 per cent per wholesale acquisition cost unit during any 12-month period; or (ii)
160 generic drug or biosimilar drug with a significant price increase as determined by the
161 commission during any 12-month period. The commission shall provide non-confidential
162 information received under this section to the office of Medicaid, the division of insurance and
163 the group insurance commission.
164 Early notice under this subsection shall be submitted to the commission in writing not
165 less than 60 days before the planned effective date of the increase.
8 of 100
166 A pharmaceutical manufacturing company required to notify the commission of a price
167 increase under this subsection shall, not less than 30 days before the planned effective date of the
168 increase, report to the commission any information regarding the price increase that is relevant to
169 the commission including, but not limited to: (i) drug identification information; (ii) drug sales
170 volume information; (iii) wholesale price and related information for the drug; (iv) net price and
171 related information for the drug; (v) drug acquisition information, if applicable; (vi) revenue
172 from the sale of the drug; and (vii) manufacturer costs.
173 (c) The commission shall conduct an annual study of pharmaceutical manufacturing
174 companies subject to the requirements in subsections (a) and (b). The commission may contract
175 with a third-party entity to implement this section.
176 (d) If a pharmaceutical manufacturing company fails to timely comply with the
177 requirements under subsection (a) or subsection (b), or otherwise knowingly obstructs the
178 commission’s ability to receive early notice under this section, including, but not limited to,
179 providing incomplete, false or misleading information, the commission may impose appropriate
180 sanctions against the manufacturer, including reasonable monetary penalties not to exceed
181 $500,000, in each instance. The commission shall seek to promote compliance with this section
182 and shall only impose a civil penalty on the manufacturer as a last resort. Amounts collected
183 under this section shall