House File 464 - Introduced
HOUSE FILE 464
BY MASCHER
A BILL FOR
1 An Act relating to price transparency and cost-sharing for
2 prescription drugs, and including applicability provisions.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 2471YH (4) 89
ko/rn
 H.F. 464
1 Section 1. NEW SECTION. 510D.1 Definitions.
2 As used in this chapter, unless the context otherwise
3 requires:
4 1. “Commissioner” means the commissioner of insurance.
5 2. “Dispenser” means the same as defined in 21 U.S.C.
6 §360eee(3).
7 3. “Established name” means the same as defined in 21 C.F.R.
8 §299.4.
9 4. “Health benefit plan” means the same as defined in
10 section 514J.102.
11 5. “Pharmaceutical drug manufacturer” or “manufacturer” means
12 any person engaged in the business of producing, preparing,
13 converting, processing, packaging, labeling, or distributing
14 a prescription drug. “Pharmaceutical drug manufacturer” or
15 “manufacturer” does not include a wholesale distributor or a
16 dispenser.
17 6. “Prescription drug” means the same as defined in 21
18 U.S.C. §360eee(12).
19 7. “Wholesale acquisition cost” or “cost” means a
20 manufacturer’s list price for a prescription drug for
21 wholesalers or direct purchasers in the United States, not
22 including prompt pay or other discounts, rebates, or reductions
23 in price, for the most recent month for which the information
24 is available, as reported in wholesale price guides or other
25 publications of drug or biological pricing data.
26 8. “Wholesale distributor” means the same as defined in 21
27 U.S.C. §360eee(29).
28 Sec. 2. NEW SECTION. 510D.2 Pharmaceutical drug
29 manufacturers —— annual report.
30 Each manufacturer shall provide an annual report by
31 February 15 to the commissioner, in a format prescribed
32 by the commissioner, that contains the current wholesale
33 acquisition cost for each prescription drug manufactured by the
34 manufacturer that was sold to a person in this state in the
35 immediately preceding calendar year. Within thirty calendar
LSB 2471YH (4) 89
-1- ko/rn 1/11
 H.F. 464
1 days of receipt, the commissioner shall publish the information
2 received by the commissioner on a publicly accessible internet
3 site.
4 Sec. 3. NEW SECTION. 510D.3 Wholesale acquisition cost
5 increase —— report.
6 1. If a prescription drug sold to a person in this state
7 has a wholesale acquisition cost of one hundred dollars or more
8 for a thirty-day supply and the cost increases forty percent
9 or more over the three preceding consecutive calendar years,
10 or increases fifteen percent or more in the preceding calendar
11 year, the manufacturer of the prescription drug shall file a
12 report with the commissioner within thirty calendar days of
13 the date on which the forty or the fifteen percent increase in
14 the cost occurs. The report shall be in the form and manner
15 prescribed by the commissioner and shall include all of the
16 following information:
17 a. The established name of the prescription drug.
18 b. All brand names, generic names, proprietary names, and
19 nonproprietary names for the prescription drug, as applicable.
20 c. The aggregate manufacturer-level research and development
21 costs related to the prescription drug for the most recent
22 calendar year for which third-party independent audit data for
23 manufacturer-level research and development costs is available.
24 d. All established names, brand names, generic names,
25 proprietary names, and nonproprietary names for each
26 prescription drug manufactured by the manufacturer that
27 received approval from the United States food and drug
28 administration in the immediately preceding three consecutive
29 calendar years.
30 e. All established names, brand names, generic names,
31 proprietary names, and nonproprietary names for each
32 prescription drug manufactured by the manufacturer for which
33 a patent or exclusivity expired in the immediately preceding
34 three consecutive calendar years.
35 f. A statement detailing the factor or factors that played
LSB 2471YH (4) 89
-2- ko/rn 2/11
 H.F. 464
1 any role in the increase in cost of the prescription drug
2 and an explanation for the factor or factors’ impact on the
3 increase in cost of the prescription drug.
4 2. All information and data a manufacturer submits to the
5 commissioner must be consistent in detail and quality with the
6 information and data submitted in the manufacturer’s annual
7 report filed with the United States securities and exchange
8 commission on form 10-k.
9 3. a. Information provided by a pharmaceutical drug
10 manufacturer to the commissioner pursuant to this section
11 that may reveal any of the following as related to a specific
12 prescription drug or class of prescription drugs shall
13 be considered a confidential record, and be recognized
14 and protected as a trade secret pursuant to section 22.7,
15 subsection 3:
16 (1) The amount the manufacturer charges a specific health
17 carrier, specific pharmacy benefit manager, or a specific
18 dispenser.
19 (2) The dollar value of the rebates the manufacturer
20 provides a specific health carrier, specific pharmacy benefit
21 manager, or a specific dispenser.
22 (3) The identity of a specific health carrier, specific
23 pharmacy benefit manager, or a specific dispenser.
24 b. Within sixty calendar days of receipt of the information
25 pursuant to this section, the commissioner shall publish all
26 nonconfidential information received by the commissioner on the
27 same publicly accessible internet site referenced in section
28 510D.2.
29 Sec. 4. NEW SECTION. 510D.4 Rules.
30 The commissioner shall adopt rules pursuant to chapter 17A
31 as necessary to administer this chapter.
32 Sec. 5. NEW SECTION. 510D.5 Enforcement.
33 The commissioner may take any action within the
34 commissioner’s authority to enforce compliance with this
35 chapter.
LSB 2471YH (4) 89
-3- ko/rn 3/11
 H.F. 464
1 Sec. 6. NEW SECTION. 510E.1 Definitions.
2 As used in this chapter unless the context otherwise
3 requires:
4 1. “Commissioner” means the commissioner of insurance.
5 2. “Covered person” means the same as defined in section
6 514J.102.
7 3. “Health benefit plan” means the same as defined in
8 section 514J.102.
9 4. “Health care professional” means the same as defined in
10 section 514J.102.
11 5. “Health carrier” means the same as defined in section
12 514J.102.
13 6. “Pharmaceutical drug manufacturer” or “manufacturer” means
14 any person engaged in the business of producing, preparing,
15 converting, processing, packaging, labeling, or distributing
16 a prescription drug. “Pharmaceutical drug manufacturer” or
17 “manufacturer” does not include a wholesale distributor or a
18 dispenser.
19 7. “Prescription drug” means the same as defined in 21
20 U.S.C. §360eee(12).
21 8. “Prescription drug benefit” means a health benefit
22 plan providing for third-party payment or prepayment for
23 prescription drugs.
24 9. “Specialty drug” means a prescription drug that a health
25 carrier has designated as a specialty drug and that has either
26 of the following characteristics:
27 a. The United States food and drug administration has
28 designated the prescription drug an orphan drug.
29 b. The manufacturer of the prescription drug or the United
30 States food and drug administration restricts distribution of
31 the prescription drug to a limited number of distributors.
32 10. “Utilization review” means the same as defined in
33 section 514F.7.
34 11. “Utilization review organization” means the same as
35 defined in section 514F.7.
LSB 2471YH (4) 89
-4- ko/rn 4/11
 H.F. 464
1 Sec. 7. NEW SECTION. 510E.2 Health carriers —— annual
2 report.
3 1. Each health carrier shall submit an annual report
4 by February 1 to the commissioner, in the form and manner
5 prescribed by the commissioner, that contains the following
6 information for the immediately preceding calendar year, across
7 all of the health carrier’s health benefit plans that offer a
8 prescription drug benefit:
9 a. The brand name of the twenty-five prescription drugs most
10 frequently covered by the prescription drug benefits offered
11 by the health carrier.
12 b. The percent increase in annual spending by the health
13 carrier to provide all prescription drug benefits offered by
14 the health carrier.
15 c. The percent increase in premiums paid by covered persons
16 attributable to all prescription drug benefits offered by the
17 health carrier.
18 d. The percentage of specialty drugs included in all
19 prescription drug benefits offered by the health carrier that
20 are subject to utilization review conducted by a utilization
21 review organization.
22 e. The percent decrease in premiums paid by covered persons
23 attributable to specialty drugs that are subject to utilization
24 review conducted by a utilization review organization that
25 are included in all prescription drug benefits offered by the
26 health carrier.
27 2. Any information a health carrier provides to the
28 commissioner pursuant to subsection 1 that may reveal any of
29 the following shall be considered a confidential record, and be
30 recognized and protected as a trade secret pursuant to section
31 22.7:
32 a. The identity of a specific health benefit plan.
33 b. The identity of the specific price charged by a specific
34 manufacturer, pharmacy benefit manager, or dispenser for a
35 specific prescription drug or class of prescription drugs.
LSB 2471YH (4) 89
-5- ko/rn 5/11
 H.F. 464
1 c. The dollar value of the rebates a specific manufacturer,
2 a specific pharmacy benefit manager, or a specific dispenser
3 provides to the health carrier.
4 3. Prior to May 1 of each calendar year, the commissioner
5 shall publish the nonconfidential data received by the
6 commissioner pursuant to this section on the same publicly
7 accessible internet site referenced in section 510D.2. The
8 data shall be aggregated from all annual reports submitted
9 pursuant to subsection 1, and the information shall be
10 made available to the public in a format that complies with
11 subsection 2.
12 Sec. 8. NEW SECTION. 510E.3 Rules.
13 The commissioner shall adopt rules pursuant to chapter 17A
14 as necessary to administer this chapter.
15 Sec. 9. NEW SECTION. 510E.4 Enforcement.
16 The commissioner may take any action within the
17 commissioner’s authority to enforce compliance with this
18 chapter.
19 Sec. 10. NEW SECTION. 514M.1 Definitions.
20 1. “Carrier” means an entity subject to the insurance laws
21 and regulations of this state, or subject to the jurisdiction
22 of the commissioner, that offers at least one health plan in
23 this state.
24 2. “Cost-sharing requirement” means any copayment,
25 coinsurance, deductible, or other out-of-pocket expense
26 obligation required of or on behalf of an enrollee in order
27 for the enrollee to receive a specific health care service,
28 including a prescription drug, covered by the enrollee’s health
29 plan.
30 3. “Enrollee” means an individual who is eligible to obtain
31 health care services under a health plan.
32 4. “Health care services” means an item or service for the
33 prevention, treatment, cure, or healing of an illness, injury,
34 or physical disability.
35 5. “Health plan” means a policy, contract, certificate, or
LSB 2471YH (4) 89
-6- ko/rn 6/11
 H.F. 464
1 agreement offered or issued by a carrier to provide, deliver,
2 arrange for, pay for, or reimburse any of the costs of health
3 care services.
4 6. “Internal Revenue Code” means the Internal Revenue Code
5 as defined in section 422.3.
6 7. “Person” means a natural person, corporation, mutual
7 company, unincorporated association, partnership, joint
8 venture, limited liability corporation, trust, estate,
9 foundation, not-for-profit organization, government or
10 governmental subdivision, or government or governmental agency.
11 Sec. 11. NEW SECTION. 514M.2 Cost-sharing calculation.
12 1. A carrier shall include all cost-sharing amounts paid by
13 an enrollee, or by another person on behalf of the enrollee, as
14 part of the carrier’s calculation of an enrollee’s contribution
15 to the enrollee’s applicable cost-sharing requirement. This
16 requirement does not apply to cost-sharing amounts paid by an
17 enrollee, or by another person on behalf of an enrollee, for
18 a prescription drug for which a medically appropriate A-rated
19 generic equivalent is available to the enrollee.
20 2. Subsection 1 shall not apply to a state-regulated
21 high-deductible health plan to the extent it results in the
22 plan’s failure to qualify as a high-deductible health plan
23 pursuant to section 223 of the Internal Revenue Code.
24 Sec. 12. NEW SECTION. 514M.3 Severability.
25 If the provisions of subsection 1 conflict with a federal law
26 or regulation as applied to a specific carrier or in a specific
27 circumstance, the provisions shall remain in full force and
28 effect for all carriers and in all circumstances in which the
29 federal conflict does not exist.
30 Sec. 13. NEW SECTION. 514M.4 Applicability.
31 This chapter applies to all health plans delivered, issued
32 for delivery, continued, or renewed in this state on or after
33 January 1, 2022.
34 Sec. 14. RETROACTIVE APPLICABILITY.
35 1. The section of this Act that requires a pharmaceutical
LSB 2471YH (4) 89
-7- ko/rn 7/11
 H.F. 464
1 drug manufacturer to submit an annual report to the
2 commissioner containing the current wholesale acquisition
3 cost for each of the manufacturer’s prescription drugs is
4 retroactively applicable to all manufacturers that manufactured
5 any prescription drug that is sold to a person in this state on
6 or after January 1, 2021.
7 2. The section of this Act that requires a pharmaceutical
8 drug manufacturer to submit a report to the commissioner
9 containing information related to an increase in the wholesale
10 acquisition cost of a prescription drug manufactured by the
11 manufacturer is retroactively applicable to all manufacturers
12 that manufactured any prescription drug that is sold to a
13 person in this state on or after January 1, 2021.
14 3. The section of this Act that requires a health carrier
15 to submit an annual report to the commissioner related to
16 all of the health carrier’s health benefit plans that offer
17 a prescription drug benefit is retroactively applicable to
18 all health benefit plans providing for third-party payment
19 or prepayment of health or medical expenses that provide a
20 prescription drug benefit that have been delivered, issued
21 for delivery, continued, or renewed in this state on or after
22 January 1, 2021.
23 EXPLANATION
24 The inclusion of this explanation does not constitute agreement with
25 the explanation’s substance by the members of the general assembly.
26 This bill relates to price transparency and cost-sharing for
27 prescription drugs.
28 The bill requires a manufacturer to file an annual report
29 with the commissioner of insurance (commissioner) that
30 discloses the wholesale acquisition cost for all prescription
31 drugs manufactured by the manufacturer that were sold to a
32 person in this state in the immediately preceding calendar
33 year. The first report that is due covers all prescription
34 drugs sold to a person in this state on or after January 1,
35 2021. “Wholesale acquisition cost” or “cost” is defined in the
LSB 2471YH (4) 89
-8- ko/rn 8/11
 H.F. 464
1 bill as the manufacturer’s list price for a prescription drug
2 for wholesalers or direct purchasers in the United States, not
3 including prompt pay or other discounts, rebates, or reductions
4 in price, for the most recent