2023 - 2024 LEGISLATURE
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2023 ASSEMBLY BILL 747
December 6, 2023 - Introduced by Representatives SUBECK, C. ANDERSON, J.
ANDERSON, ANDRACA, BARE, BILLINGS, CLANCY, CONLEY, CONSIDINE, DRAKE,
EMERSON, HONG, JACOBSON, JOERS, MOORE OMOKUNDE, NEUBAUER,
ORTIZ-VELEZ, PALMERI, RATCLIFF, SHANKLAND, SHELTON, SINICKI, HAYWOOD and
MADISON, cosponsored by Senators PFAFF, HESSELBEIN, AGARD, CARPENTER, L.
JOHNSON, LARSON, ROYS, SMITH, SPREITZER, TAYLOR and WIRCH. Referred to
Committee on Insurance.
1 AN ACT to create 15.07 (3) (bm) 7., 15.735, 20.145 (1) (g) 4. and subchapter VI
2 of chapter 601 [precedes 601.78] of the statutes; relating to: creating a
3 Prescription Drug Affordability Review Board, funding for an office of
4 prescription drug affordability, crediting certain amounts to the general
5 program operations account of the office of the commissioner of insurance,
6 granting rulemaking authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
This bill creates a Prescription Drug Affordability Review Board, whose
purpose is to protect Wisconsin residents and other stakeholders from the high costs
of prescription drugs. The board consists of the commissioner of insurance and the
following members, all of whom are appointed by the governor for four-year terms:
1. Two members who represent the pharmaceutical drug industry, at least one
of whom is a licensed pharmacist.
2. Two members who represent the health insurance industry.
3. Two members who represent the health care industry, at least one of whom
is a licensed practitioner.
4. Two members who represent the interests of the public.
The bill requires the board to meet in open session at least four times per year
to review prescription drug pricing information. The board must provide at least two
weeks' public notice of its meetings, make the meeting's materials publicly available
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ASSEMBLY BILL 747
at least one week prior to meeting, and provide the opportunity for public comment.
The bill imposes conflict of interest requirements for the board relating to recusal
and public disclosure of certain conflicts. The bill directs the board to access and
assess drug pricing information, to the extent practicable, by accessing and assessing
information from other states, by assessing spending for the drug in Wisconsin, and
by accessing other available pricing information.
Under the bill, the board must conduct drug cost affordability reviews. The first
step in the reviews is for the board to identify prescription drugs whose launch
wholesale acquisition cost exceeds specified thresholds, prescription drugs whose
increase in wholesale acquisition cost exceeds specified thresholds, and other
prescription drugs that may create affordability challenges for the health care
system in Wisconsin. For each identified prescription drug, the board must
determine whether to conduct an affordability review by seeking stakeholder input
and considering the average patient cost share for the drug. During an affordability
review, the board must determine whether use of the prescription drug that is fully
consistent with the labeling approved by the federal Food and Drug Administration
or standard medical practice has led or will lead to an affordability challenge for the
health care system in Wisconsin. In making this determination, the bill requires the
board to consider a variety of factors, which include the following:
1. The drug's wholesale acquisition cost.
2. The average monetary price concession, discount, or rebate the
manufacturer provides, or is expected to provide, for the drug to health plans.
3. The total amount of price concessions, discounts, and rebates the
manufacturer provides to each pharmacy benefit manager for the drug.
4. The price at which therapeutic alternatives have been sold and the average
monetary concession, discount, or rebate the manufacturer provides, or is expected
to provide, to health plan payors and pharmacy benefit managers for therapeutic
alternatives.
5. The costs to health plans based on patient access consistent with federal
labeled indications and recognized standard medical practice.
6. The impact on patient access resulting from the drug's cost relative to
insurance benefit design.
7. The current or expected dollar value of drug-specific patient access
programs that are supported by the manufacturer.
8. The relative financial impacts to health, medical, or social services costs that
can be quantified and compared to baseline effects of existing therapeutic
alternatives.
9. The average patient copay or other cost sharing for the drug.
If the board determines that a prescription drug will lead to an affordability
challenge, the bill directs the board to establish an upper payment limit for that drug
that applies to all purchases and payor reimbursements of the drug dispensed or
administered to individuals in Wisconsin. In establishing the upper payment limit,
the board must consider the cost of administering the drug, the cost of delivering it
to consumers, and other relevant administrative costs. For certain drugs, the board
must solicit information from the manufacturer regarding the price increase and, if
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the board determines that the price increase is not a result of the need for increased
manufacturing capacity or other effort to improve patient access during a public
health emergency, the board must establish an upper payment limit equal to the
drug's cost prior to the price increase.
Further, this bill provides $500,000 in program revenue in fiscal year 2023-24
for onetime implementation costs associated with establishing an Office of
Prescription Drug Affordability in the Office of the Commissioner of Insurance. The
bill provides that the Office of Prescription Drug Affordability is responsible for
prescription drug affordability programming within OCI and for overseeing the
operations of the Prescription Drug Affordability Review Board. Additionally, the
bill authorizes and funds for the fiscal biennium 16.0 positions for the Office of
Prescription Drug Affordability.
Finally, the bill credits to the appropriation account for OCI's general program
operations all moneys received from the regulation of pharmacy benefit managers,
pharmacy benefit management brokers, pharmacy benefit management
consultants, pharmacy services administration organizations, and pharmaceutical
sales representatives.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
1 SECTION 1. 15.07 (3) (bm) 7. of the statutes is created to read:
2 15.07 (3) (bm) 7. The prescription drug affordability review board shall meet
3 at least 4 times each year.
4 SECTION 2. 15.735 of the statutes is created to read:
5 15.735 Same; attached board. (1) There is created a prescription drug
6 affordability review board attached to the office of the commissioner of insurance
7 under s. 15.03. The board shall consist of the following members:
8 (a) The commissioner of insurance or his or her designee.
9 (b) Two members appointed for 4-year terms who represent the
10 pharmaceutical drug industry, including pharmaceutical drug manufacturers and
11 wholesalers. At least one of the members appointed under this paragraph shall be
12 a licensed pharmacist.
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1 (c) Two members appointed for 4-year terms who represent the health
2 insurance industry, including insurers and pharmacy benefit managers.
3 (d) Two members appointed for 4-year terms who represent the health care
4 industry, including hospitals, physicians, pharmacies, and pharmacists. At least one
5 of the members appointed under this paragraph shall be a licensed practitioner.
6 (e) Two members appointed for 4-year terms who represent the interests of the
7 public.
8 (2) A member appointed under sub. (1), except for a member appointed under
9 sub. (1) (b), may not be an employee of, a board member of, or a consultant to a drug
10 manufacturer or trade association for drug manufacturers.
11 (3) Any conflict of interest, including any financial or personal association, that
12 has the potential to bias or has the appearance of biasing an individual's decision in
13 matters related to the board or the conduct of the board's activities shall be
14 considered and disclosed when appointing that individual to the board under sub.
15 (1).
16 SECTION 3. 20.145 (1) (g) 4. of the statutes is created to read:
17 20.145 (1) (g) 4. All moneys received from the regulation of pharmacy benefit
18 managers, pharmacy benefit management brokers, pharmacy benefit management
19 consultants, pharmacy services administration organizations, and pharmaceutical
20 sales representatives.
21 SECTION 4. Subchapter VI of chapter 601 [precedes 601.78] of the statutes is
22 created to read:
23 CHAPTER 601
24 SUBCHAPTER VI
25 PRESCRIPTION DRUG
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1 AFFORDABILITY REVIEW BOARD
2 601.78 Definitions. In this subchapter:
3 (1) “Biologic” means a drug that is produced or distributed in accordance with
4 a biologics license application approved under 21 CFR 601.20.
5 (2) “Biosimilar” means a drug that is produced or distributed in accordance
6 with a biologics license application approved under 42 USC 262 (k) (3).
7 (3) “Board” means the prescription drug affordability review board established
8 under s. 15.735 (1).
9 (4) “Brand name drug” means a drug that is produced or distributed in
10 accordance with an original new drug application approved under 21 USC 355 (c),
11 other than an authorized generic drug, as defined in 42 CFR 447.502.
12 (5) “Financial benefit” includes an honorarium, fee, stock, the value of the stock
13 holdings of a member of the board or any immediate family member, and any direct
14 financial benefit deriving from the finding of a review conducted under s. 601.79.
15 (6) “Generic drug” means any of the following:
16 (a) A retail drug that is marketed or distributed in accordance with an
17 abbreviated new drug application approved under 21 USC 355 (j).
18 (b) An authorized generic drug, as defined in 42 CFR 447.502.
19 (c) A drug that entered the market prior to 1962 and was not originally
20 marketed under a new drug application.
21 (7) “Immediate family member” means a spouse, grandparent, parent, sibling,
22 child, stepchild, or grandchild or the spouse of a grandparent, parent, sibling, child,
23 stepchild, or grandchild.
24 (8) “Manufacturer” means an entity that does all of the following:
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1 (a) Engages in the manufacture of a prescription drug product or enters into
2 a lease with another manufacturer to market and distribute a prescription drug
3 product under the entity's own name.
4 (b) Sets or changes the wholesale acquisition cost of the prescription drug
5 product described in par. (a).
6 (9) “Pharmacy benefit manager” has the meaning given in s. 632.865 (1) (c).
7 (10) “Prescription drug product” means a brand name drug, a generic drug, a
8 biologic, or a biosimilar.
9 601.785 Prescription drug affordability review board. (1) MISSION. The
10 purpose of the board is to protect state residents, the state, local governments, health
11 plans, health care providers, pharmacies licensed in this state, and other
12 stakeholders of the health care system in this state from the high costs of prescription
13 drug products.
14 (2) POWERS AND DUTIES. (a) The board shall do all of the following:
15 1. Meet in open session at least 4 times per year to review prescription drug
16 product pricing information, except that the chair may cancel or postpone a meeting
17 if there is no business to transact.
18 2. To the extent practicable, access and assess pricing information for
19 prescription drug products by doing all of the following:
20 a. Accessing and assessing information from other states by entering into
21 memoranda of understanding with other states to which manufacturers report
22 pricing information.
23 b. Assessing spending for specific prescription drug products in this state.
24 c. Accessing other available pricing information.
25 (b) The board may do any of the following:
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1 1. Promulgate rules for the administration of this subchapter.
2 2. Enter into a contract with an independent 3rd party for any service
3 necessary to carry out the powers and duties of the board. Unless written permission
4 is granted by the board, any person with whom the board contracts may not release,
5 publish, or otherwise use any information to which the person has access under the
6 contract.
7 (c) The board shall establish and maintain a website to provide public notices
8 and make meeting materials available under sub. (3) (a) and to disclose conflicts of
9 interest under sub. (4) (d).
10 (3) MEETING REQUIREMENTS. (a) Pursuant to s. 19.84, the board shall provide
11 public notice of each board meeting at least 2 weeks prior to the meeting and shall
12 make the materials for each meeting publicly available at least one week prior to the
13 meeting.
14 (b) Notwithstanding s. 19.84 (2), the board shall provide an opportunity for
15 public comment at each open meeting and shall provide the public with the
16 opportunity to provide written comments on pending decisions of the board.
17 (c) Notwithstanding subch. V of ch. 19, any portion of a meeting of the board
18 concerning proprietary data and information shall be conducted in closed session
19 and shall in all respects remain confidential.
20 (d) The board may allow expert testimony at any meeting, including when the
21 board meets in closed session.
22 (4) CONFLICTS OF INTEREST. (a) A member of the board shall recuse himself or
23 herself from a decision by the board relating to a prescription drug product if the
24 member or an immediate family member has received or could receive any of the
25 following:
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1 1. A direct financial benefit deriving from a determination, or a finding of a
2 study or review, by the board relating to the prescription drug product.
3 2. A financial benefit in excess of $5,000 in a calendar year from any person who
4 owns, manufactures, or provides a prescription drug product to be studied or
5 reviewed by the board.
6 (b) A conflict of interest under this subsection shall be disclosed by the board
7 when hiring board staff, by the appointing authority when appointing members to
8 the board, and by the board when a member of the board is recused from any decision
9 relating to a review of a prescription drug product.
10 (c) A conflict of interest under this subsection shall be disclosed no later than
11 5 days after the conflict is identified, except that, if the conflict is identified within
12 5 days of an open meeting of the board, the conflict shall be disclosed prior to the
13 meeting.
14 (d) The board shall disclose a conflict of interest under this subsection on the
15 board's website unless the chair of the board recuses the member from a final
16 decision relating to a review of the prescription drug product. The disclosure shall
17 include the type, nature, and magnitude of the interests of the member involved.
18 (e) A member of the board or a 3rd-party contractor may not accept any gift or
19 donation of services or property that indicates a potential conflict of interest or has
20 the appearance of biasing the work of the board.
21 601.79 Drug cost affordability review. (1)