SENATE DOCKET, NO. 2217 FILED ON: 2/19/2021
SENATE . . . . . . . . . . . . . . No.
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Cindy F. Friedman
_________________
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 pharmaceutical access, costs and transparency.
_______________
PETITION OF:
NAME: DISTRICT/ADDRESS:
Cindy F. Friedman Fourth Middlesex
1 of 1
 SENATE DOCKET, NO. 2217 FILED ON: 2/19/2021
SENATE . . . . . . . . . . . . . . No.
[Pin Slip]
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 2409 OF 2019-2020.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Second General Court
(2021-2022)
_______________
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 2018
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 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.
1 of 45
11 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
12 amended by inserting after the definition of “Disproportionate share hospital” the following
13 definition:-
14 “Early notice”, advanced notification by a pharmaceutical manufacturing company of a:
15 (i) new drug, device or other development coming to market; or (ii) a price increase, as described
16 in subsection (b) of section 15A.
17 SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further
18 amended by inserting after the definition of “Fiscal year” the following definition:-
19 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
20 abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic as
21 defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962 and
22 was not originally marketed under a new drug application; or (iv) identified by the health benefit
23 plan as a generic drug based on available data resources such as Medi-Span.
24 SECTION 4. Said section 1 of said chapter 6D, as so appearing, is hereby further
25 amended by striking out, in line 189, the words “not include excludes ERISA plans” and
26 inserting in place thereof the following words:- include self-insured plans to the extent allowed
27 under the federal Employee Retirement Income Security Act of 1974.
28 SECTION 5. Said section 1 of said chapter 6D, as so appearing, is hereby further
29 amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
30 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
31 preparation, propagation, compounding, conversion or processing of prescription drugs, directly
2 of 45
32 or indirectly, by extraction from substances of natural origin, independently by means of
33 chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
34 repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
35 “pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
36 under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
37 chapter 112.
38 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
39 directly or through a subsidiary provides pharmacy benefit management services for prescription
40 drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
41 insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
42 management services shall include, but not be limited to, the processing and payment of claims
43 for prescription drugs; the performance of drug utilization review; the processing of drug prior
44 authorization requests; pharmacy contracting; the adjudication of appeals or grievances related to
45 prescription drug coverage contracts; formulary administration; drug benefit design; mail and
46 specialty drug pharmacy services; cost containment; clinical, safety and adherence programs for
47 pharmacy services and managing the cost of covered prescription drugs; provided further, that
48 “pharmacy benefit manager” shall include a health benefit plan that does not contract with a
49 pharmacy benefit manager and manages its own prescription drug benefits unless specifically
50 exempted by the commission.
51 SECTION 6. Said section 1 of said chapter 6D, as so appearing, is hereby further
52 amended by inserting after the definition of “Physician” the following definition:-
3 of 45
53 “Pipeline drugs”, prescription drug products containing a new molecular entity for which
54 the sponsor has submitted a new drug application or biologics license application and received an
55 action date from the federal Food and Drug Administration.
56 SECTION 7. Said section 1 of said chapter 6D, as so appearing, is hereby further
57 amended by adding the following definition:-
58 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
59 1395w-3a(c)(6)(B).
60 SECTION 8. Said chapter 6D is hereby further amended by striking out section 2A, as so
61 appearing, and inserting in place thereof the following section:-
62 Section 2A. The commission shall keep confidential all nonpublic clinical, financial,
63 strategic or operational documents or information provided or reported to the commission in
64 connection with any care delivery, quality improvement process, performance improvement
65 plan, early notification or access improvement plan activities authorized under sections 7, 10, 14,
66 15, 15A, 20 or 21 of this chapter or under section 2GGGG of chapter 29 and shall not disclose
67 the information or documents to any person without the consent of the payer, provider or
68 pharmaceutical manufacturing company providing or reporting the information or documents
69 under said sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under said section 2GGGG of
70 said chapter 29, except in summary form in evaluative reports of such activities or when the
71 commission believes that such disclosure should be made in the public interest after taking into
72 account any privacy, trade secret or anticompetitive considerations. The confidential information
73 and documents shall not be public records and shall be exempt from disclosure under clause
74 Twenty sixth of section 7 of chapter 4 or section 10 of chapter 66.
4 of 45
75 SECTION 9. Section 4 of said chapter 6D, as so appearing, is hereby amended by
76 striking out, in lines 6 and 7, the word “manufacturers” and inserting in place thereof the
77 following words:- manufacturing companies, pharmacy benefit managers.
78 SECTION 10. Section 6 of said chapter 6D, as so appearing, is hereby amended by
79 inserting after the word “center”, in line 1, the following words:- , pharmaceutical and
80 biopharmaceutical manufacturing company, pharmacy benefit manager.
81 SECTION 11. Said section 6 of said chapter 6D, as so appearing, is hereby further
82 amended by striking out, in lines 5 and 36, the figure “33” and inserting in place thereof, in each
83 instance, the following figure:- 25.
84 SECTION 12. Said section 6 of said chapter 6D, as so appearing, is hereby further
85 amended by adding the following paragraph:-
86 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
87 companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
88 appropriated by the general court for the expenses of the commission minus amounts collected
89 from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
90 dissemination of reports and information; and (iii) federal matching revenues received for these
91 expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical and
92 biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
93 and distribution determined by the commission, pay to the commonwealth an amount of the
94 estimated expenses of the commission attributable to the commission’s activities under sections
95 8, 9, 15A, 20 and 21. A pharmacy benefit manager that is a surcharge payor subject to the
5 of 45
 96 preceding paragraph and manages its own prescription drug benefits shall not be subject to
97 additional assessment under this paragraph
98 SECTION 13. Section 8 of said chapter 6D, as so appearing, is hereby amended by
99 inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
100 manager, pharmaceutical manufacturing company.
101 SECTION 14. Said section 8 of said chapter 6D, as so appearing, is hereby further
102 amended by inserting after the word “organizations”, in line 14, the following words:- ,
103 pharmacy benefit managers, pharmaceutical manufacturing companies.
104 SECTION 15. Said section 8 of said chapter 6D, as so appearing, is hereby further
105 amended by striking out, in line 32, the words “and (xi)” and inserting in place thereof the
106 following words:- (xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least
107 1 pharmacy benefit manager; and (xiii).
108 SECTION 16. Said section 8 of said chapter 6D, as so appearing, is hereby further
109 amended by striking out, in line 48, the first time it appears, the word “and”.
110 SECTION 17. Said section 8 of said chapter 6D, as so appearing, is hereby further
111 amended by inserting after the word “commission”, in line 59, the first time it appears, the
112 following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
113 manufacturing companies, testimony concerning factors underlying prescription drug costs and
114 price increases including, but not limited to, the initial prices of drugs coming to market and
115 subsequent price increases, changes in industry profit levels, marketing expenses, reverse
116 payment patent settlements, the impact of manufacturer rebates, discounts and other price
6 of 45
117 concessions on net pricing, the availability of alternative drugs or treatments and any other
118 matters as determined by the commission.
119 SECTION 18. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
120 hereby amended by striking out the second sentence and inserting in place thereof the following
121 sentence:-
122 The report shall be based on the commission’s analysis of information provided at the
123 hearings by witnesses, providers, provider organizations, payers, pharmaceutical manufacturing
124 companies and pharmacy benefit managers, registration data collected under section 11, data
125 collected or analyzed by the center under sections 8, 9, 10, and 10A of chapter 12C and any other
126 available information that the commission considers necessary to fulfill its duties under this
127 section as defined in regulations promulgated by the commission.
128 SECTION 19. Section 9 of said chapter 6D, as so appearing, is hereby amended by
129 inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
130 manager, pharmaceutical manufacturing company.
131 SECTION 20. Said chapter 6D is hereby further amended by inserting after section 15
132 the following section:-
133 Section 15A. (a) A pharmaceutical manufacturing company shall provide early notice to
134 the commission in a manner described in this section for a: (i) pipeline drug; (ii) generic drug; or
135 (iii) biosimilar drug. The commission shall make non-confidential early notice information
136 available to the office of Medicaid or another agency, as the commission deems appropriate.
7 of 45
137 Early notice for a pipeline drug or biosimilar drug under this subsection shall be
138 submitted to the commission in writing not later than 60 days after receipt of the federal Food
139 and Drug Administration action date. Early notice for a generic drug under this subsection shall
140 be submitted to the commission in writing not later than 60 days before the generic drug’s
141 effective date of distribution.
142 For each prescription drug product, early notice shall include a brief description of the: (i)
143 primary disease, health condition or therapeutic area being studied and the indication; (ii) route
144 of administration being studied; (iii) clinical trial comparators; and (iv) estimated year of market
145 entry. To the extent possible, information shall be collected using data fields consistent with
146 those used by the federal National Institutes of Health for clinical trials.
147 For each pipeline drug, early notice shall include whether the drug has been designated
148 by the federal Food and Drug Administration: (i) as an orphan drug; (ii) fast track; (iii) as a
149 breakthrough therapy; (iv) for accelerated approval; or (v) for priority review for a new
150 molecular entity; provided, however, that notwithstanding clause (v), submissions for drugs in
151 development that are designated as new molecular entities by the federal Food and Drug
152 Administration shall be provided as soon as practical upon receipt of the relevant designations.
153 (b) A pharmaceutical manufacturing company shall provide early notice to the
154 commission if it plans to increase the wholesale acquisition cost of a: (i) brand-name drug by
155 more than 20 per cent per wholesale acquisition cost unit during any 12-month period; or (ii)
156 generic drug with a significant price increase as determined by the commission during any 12-
157 month period. The commission shall make non-confidential early notice information available to
158 the office of Medicaid or another agency, as the commission deems appropriate.
8 of 45
159 Early notice under this subsection shall be submitted to the commission in writing not
160 less than 60 days before the planned effective date of the increase.
161 A pharmaceutical manufacturing company required to notify the commission of a price
162 increase under this subsection shall, not less than 30 days before the planned effective date of the
163 increase, report to the commission any information regarding the price increase that is relevant to
164 the commission including, but not limited to: (i) drug identification information; (ii) drug sales
165 volume information; (iii) wholesale price and related information for the drug; (iv) drug
166 acquisition information, if applicable; (v) revenue from the sale of the drug; and (vi)
167 manufacturer costs.
168 (c) The commission shall conduct an annual study of pharmaceutical manufacturing
169 companies subject to the requirements in subsections (a) and (b). The commission may contract
170 with a third-party entity to implement this section.
171 (d) Notwithstanding any general or special law to the contrary, information provided
172 under this section shall be protected as confidential and shall not be a public record under clause
173 Twenty-sixth of section 7 of chapter 4 or under chapter 66.
174 SECTION 21. Said chapter 6D is hereby further amended by adding the following 2
175 sections:-
176 Section 20. (a) As used in this section, the following words shall have the following
177 meanings unless the context clearly requires otherwise:
178 “Eligible drug”, a (i) brand name drug or biologic, not including a biosimilar, that has a
179 launch wholesale acquisition cost of $50,000 or more for a 1-year supply or full course of
9 of 45
180 treatment; (ii) biosimilar drug that has a launch wholesale acquisition cost that is not at least 15
181 per cent lower than the referenced brand biologic at