HOUSE DOCKET, NO. 2000 FILED ON: 2/16/2021
HOUSE . . . . . . . . . . . . . . . No.
The Commonwealth of Massachusetts
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PRESENTED BY:
Edward F. Coppinger
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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 promoting comprehensive transparency in the pharmaceutical industry.
_______________
PETITION OF:
NAME: DISTRICT/ADDRESS: DATE ADDED:
Edward F. Coppinger 10th Suffolk 2/16/2021
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 HOUSE DOCKET, NO. 2000 FILED ON: 2/16/2021
HOUSE . . . . . . . . . . . . . . . No.
[Pin Slip]
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Second General Court
(2021-2022)
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An Act relative to promoting comprehensive transparency in the pharmaceutical industry.
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, as appearing in the 2016 Official Edition, is hereby
2 amended by inserting after the definition of “Disproportionate share hospital” the following
3 definition:-
4 “Early notice”, advanced notification by a pharmaceutical manufacturing company of a
5 new drug, device or other development coming to market.
6 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
7 amended by inserting after the definition of “Performance penalty” the following 3 definitions:-
8 “Pharmaceutical manufacturing company”, any entity engaged in the production,
9 preparation, propagation, compounding, conversion or processing of prescription drugs, either
10 directly or indirectly, by extraction from substances of natural origin, or independently by means
11 of chemical synthesis or by a combination of extraction and chemical synthesis, or any entity
12 engaged in the packaging, repackaging, labeling, relabeling or distribution of prescription drugs;
13 provided however, that “pharmaceutical manufacturing company” shall not include a wholesale
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14 drug distributor licensed pursuant to section 36A of chapter 112 or a retail pharmacist registered
15 pursuant to section 38 of said chapter 112.
16 “Pharmacy benefit manager”, any person, business or entity, however organized, that
17 administers, either directly or through its subsidiaries, pharmacy benefit services for prescription
18 drugs and devices on behalf of health benefit plan sponsors, including, but not limited to, self-
19 insured employers, insurance companies and labor unions.
20 “Pharmacy benefit services” shall include, but not be limited to: formulary
21 administration; drug benefit design; pharmacy network contracting; pharmacy claims processing;
22 mail and specialty drug pharmacy services; and cost containment, clinical, safety, adherence
23 programs for pharmacy services. For the purposes of the chapter, a health benefit plan that does
24 not contract with a pharmacy benefit manager shall be a pharmacy benefit manager.
25 SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further
26 amended by inserting after the definition of “Physician” the following definition:-
27 “Pipeline drugs”, which are defined as those drugs that contain a new molecular entity
28 (“NME”) for which the sponsor has submitted a new drug application or biologics license
29 application (“BLA”).
30 SECTION 4. Said section 1 of said chapter 6D, as so appearing, is hereby further
31 amended by inserting after the definition of “State Institution” the following definition:-
32 “Sponsor”, any person who submits an NDA (including a 505(b)(2) application), ANDA,
33 BLA or an amendment or supplement to an NDA, ANDA, or BLA to obtain FDA approval of a
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34 new drug or FDA licensure of a biological product application and any person who owns an
35 approved NDA (including a 505(b)(2) application), ANDA, or BLA.
36 SECTION 5. Section 4 of said chapter 6D, as so appearing, is hereby amended by
37 striking out, in lines 6 and 7, the word “manufacturers” and inserting in place thereof the
38 following words:- manufacturing companies, pharmacy benefit managers.
39 SECTION 6. Section 6 of said chapter 6D, as so appearing, is hereby amended by adding
40 the following paragraph:-
41 To the extent that the analysis of spending trends with respect to pharmaceutical or
42 biopharmaceutical products increases the expenses of the commission, such expenses shall be
43 fully assessed to pharmaceutical manufacturing companies and pharmacy benefit managers. Any
44 fees assessed by the commission under this section, when paid by every pharmaceutical
45 manufacturing company and pharmacy benefit manager, shall not exceed the commission’s
46 reasonable regulatory costs to analyze such spending trends, and in no event shall exceed $2000
47 annually as assessed against each such pharmaceutical manufacturing company and pharmacy
48 benefit manager. A pharmacy benefit manager that is a surcharge payor subject to the preceding
49 paragraph and administers its own prescription drug, prescription device or pharmacist services
50 or prescription drug and device and pharmacist services portion shall not be subject to additional
51 assessment under this paragraph.
52 SECTION 7. Section 8 of said chapter 6D, as so appearing, is hereby amended by
53 inserting after the word “organization” , in lines 6 and 7, the following words:- , pharmacy
54 benefit manager, pharmaceutical manufacturing company.
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55 SECTION 8. Said section 8 of said chapter 6D, as so appearing, is hereby further
56 amended by inserting after the word “organizations”, in line 14, the following words:- ,
57 pharmacy benefit managers, pharmaceutical manufacturing companies.
58 SECTION 9. Said section 8 of said chapter 6D, as so appearing, is hereby further
59 amended by striking out, in lines 32 and 33 , the words “and (xi) any witness identified by the
60 attorney general or the center” and inserting in place thereof the following words:- (xi) 2
61 pharmacy benefit managers; (xii) 3 pharmaceutical manufacturing companies, 1 of which shall
62 be representative of a publicly traded company that manufactures specialty drugs, 1 of which
63 shall be representative of and doing business in generic drug manufacturing and 1 of which shall
64 have been in existence for fewer than 10 years; and (xiii) any witness identified by the attorney
65 general or the center.
66 SECTION 10. Said section 8 of said chapter 6D, as so appearing, is hereby further
67 amended by striking out, in line 48, the first time it appears, the word “and”.
68 SECTION 11. Said section 8 of said chapter 6D, as so appearing, is hereby further
69 amended by inserting after the word “commission”, in line 59, the first time it appears, the
70 following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
71 manufacturing companies, testimony that is suitable for public release and that is not likely to
72 compromise the financial, competitive or proprietary nature of any information and data
73 concerning factors underlying prescription drug costs and price increases; the impact of
74 aggregate manufacturer rebates, discounts and other price concessions on net pricing; and any
75 other matters as determined by the commission. No pharmaceutical manufacturing company
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76 identified as a witness under this section, or any testimony by any such company, shall be subject
77 to the provisions of section 17 of chapter 12C.
78 SECTION 12. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
79 hereby amended by striking out the second sentence and inserting in place thereof the following
80 sentence:-
81 The report shall be based on the commission's analysis of information provided at the
82 hearings by witnesses, providers, provider organizations, insurers, pharmaceutical manufacturing
83 companies and pharmacy benefit managers, registration data collected pursuant to section 11,
84 data collected or analyzed by the center pursuant to sections 8, 9, 10,10A and 10B of chapter
85 12C and any other available information that the commission considers necessary to fulfill its
86 duties in this section, as defined in regulations promulgated by the commission.
87 SECTION 13. Section 8A of chapter 6D is hereby deleted and replaced in its entirety
88 with the following new section:-
89 Section 8A. (a) As used in this section, the following words shall, unless the context
90 clearly requires otherwise, have the following meaning:
91 “Manufacturer”, an entity that manufactures a pharmaceutical drug covered by
92 MassHealth.
93 “Rare disease”, any disease that affects fewer than 200,000 people in the United States,
94 which has status as an "orphan" disease for research purposes, or is known to be substantially
95 under diagnosed and unrecognized as a result of lack of adequate diagnostic and research
96 information.
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 97 “Wholesale acquisition cost”, the cost of a prescription drug as defined in 42 U.S.C.
98 §1395w-3a(c)(6)(B).
99 (b) The commission may require a manufacturer specified in subsection (c) to disclose to
100 the commission within a reasonable time the following information relating to the
101 manufacturer’s pricing of that drug, as applicable, on a standard reporting form developed by the
102 commission with the input of the manufacturers:
103 (1) A schedule of the drug’s wholesale acquisition cost increases over the previous five
104 calendar years if the drug was manufactured by the company;
105 (2) A written description suitable for public release of the specific financial and
106 nonfinancial factors used to make the decision to increase the wholesale acquisition cost of the
107 drug over the previous five calendar years including, but not limited to, an explanation of how
108 these factors explain the increase in the wholesale acquisition cost;
109 (3) The manufacturer’s aggregate, company-level research and development and other
110 relevant capital expenditures, including facility construction, for the most recent year for which
111 final audited data are available;
112 (4) If the drug was acquired by the manufacturer within the previous 5 years, all of the
113 following information:
114 (A) The wholesale acquisition cost at the time of acquisition and in the calendar year
115 prior to acquisition.
116 (B) The name of the company from which the drug was acquired, the date acquired,
117 and the purchase price.
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118 (C) The year the drug was introduced to market and the wholesale acquisition cost at
119 the time of introduction.
120 (5) The patent expiration date of the drug if it is under patent.
121 (6) If the drug is a multiple source drug, an innovator multiple source drug, a
122 noninnovator multiple source drug, or a single source drug, as defined in subparagraph (A) of
123 paragraph (7) of subdivision (k) of Section 1396r–8 of Title 42 of the United States Code.
124 (7) A description of the change or improvement in the drug, if any, that necessitates
125 the price increase.
126 (8) Volume of sales of the drug in the US for the previous year.
127 (9) If the drug was approved during the preceding 5 calendar years, and the wholesale
128 acquisition cost of the drug exceeded a current average annual gross cost per utilizer for public
129 and private health care payers in Massachusetts of greater than $50,000 during the immediately
130 preceding calendar year, all of the following information:
131 (A) A description of the marketing and pricing plans used in the launch of the drug in
132 the US and internationally.
133 (B) The estimated volume of patients that are prescribed the drug.
134 (C) If the drug was granted breakthrough therapy designation or priority review by
135 the Federal Food and Drug Administration prior to final approval.
136 (D) The date and price of acquisition if the drug was not developed by the
137 manufacturer.
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138 (10) Any other information that the manufacturer wishes to provide to the commission.
139 The manufacturer may limit the information reported pursuant to this section to that
140 which is otherwise in the public domain or publicly available. Based on the records furnished, as
141 well as any records relied upon by the executive office of health and human services in
142 connection with the procedures under section 12A of chapter 118E and any other publicly
143 available records, the commission may identify a proposed supplemental rebate, in consultation
144 with the executive office, for a prescribed drug specified in subsection (c); provided that the
145 proposed supplemental rebate may be based on a proposed value of the drug; and provided
146 further, that the commission shall consider any proposed supplemental rebate framework or other
147 information provided to the commission under subsection (g) of section 12A of chapter 118E.
148 (c) A manufacturer of the following prescribed drugs shall comply with the requirements
149 set forth in this section: a drug for which the executive office was unable to successfully
150 conclude supplemental rebate negotiations with the manufacturer under subsections (b) and (c)
151 of section 12A of chapter 118E, and for which the commission has received notice from the
152 executive office under subsection (g) of said section 12A of said chapter 118E.
153 (d) Records disclosed by a manufacturer under this section shall: (i) be accompanied by
154 an attestation that all information provided is true and correct; (ii) not be public records under
155 section 7 of chapter 4 or chapter 66; and (iii) remain confidential; provided, however, that the
156 commission may produce reports summarizing any findings; provided that any such report shall
157 not be in a form that identifies specific prices charged for or rebate amounts associated with
158 drugs by a manufacturer, or in a manner that is likely to compromise the financial, competitive or
159 proprietary nature of any information.
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160 (e) If, after review of any records furnished to the commission under subsection (b), the
161 commission determines that the manufacturer’s pricing of the drug is potentially unreasonable or
162 excessive in relation to the commission’s proposed value under subsection (b), the commission
163 shall, with 30 days’ advance notice to the manufacturer, request that the manufacturer provide, at
164 the manufacturer’s discretion, further information related to the pricing of the prescribed drug
165 and the manufacturer’s justification for the pricing. In addition to the manufacturer, the
166 commission may identify other relevant parties including but not limited to patients, providers,
167 provider organizations, external experts and payers who may provide information to the
168 commission.
169 (f) Any information, analyses or reports regarding a particular drug reviewed or used in
170 identifying the supplemental rebate or assessing the proposed value of the drug shall be provided
171 to the manufacturer for review and input. The commission shall consider any clarifications or
172 data provided by the manufacturer with respect to its drug. The commission may not base its
173 determination on the supplemental rebate, the proposed value or the reasonableness of the drug
174 pricing, solely on the analysis or research of an outside third party.
175 (g) If the commission relies upon a third party to provide cost-effectiveness analysis or
176 research related to the proposed value, such analysis or research shall also provide, but not be
177 limited in scope to, (i) a description of the methodologies and models used in its analysis; (ii) any
178 assumptions and potential limitations of research findings in the context of the results; and (iii)
179 outcomes for affected subpopulations that utilize the drug.
180 (h) (1) In connection with the identification of a proposed supplemental rebate or a
181 proposed value for a drug that is approved for the treatment of a rare disease or that is otherwise
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182 identified as first-in-class, including without limitation any consultation with a third party to
183 provide cost effectiveness analysis or research related to the proposed value for such a drug, the
184 commission shall ensure that opportunities exist, at a time the commission determines
185 appropriate, for consultations with stakeholders on