SENATE DOCKET, NO. 2286 FILED ON: 2/19/2021
SENATE . . . . . . . . . . . . . . No.
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Mark C. Montigny
_________________
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 to promote transparency and prevent price gouging of pharmaceutical drug prices.
_______________
PETITION OF:
NAME: DISTRICT/ADDRESS:
Mark C. Montigny Second Bristol and Plymouth
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 SENATE DOCKET, NO. 2286 FILED ON: 2/19/2021
SENATE . . . . . . . . . . . . . . No.
[Pin Slip]
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 712 OF 2019-2020.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Second General Court
(2021-2022)
_______________
An Act to promote transparency and prevent price gouging of pharmaceutical drug prices.
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 “Performance penalty” the
3 following 2 definitions:-
4 “Pharmaceutical manufacturing company”, an entity engaged in the production,
5 preparation, propagation, conversion or processing of prescription drugs, directly or indirectly,
6 by extraction from substances of natural origin or independently by means of chemical synthesis
7 or by a combination of extraction and chemical synthesis or an entity engaged in the packaging,
8 repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
9 ''Pharmaceutical manufacturing company'' shall not include a wholesale drug distributor licensed
10 under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
11 chapter 112.
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12 “Pharmacy benefit manager”, a person or entity that administers: (i) a prescription drug,
13 prescription device or pharmacist services; or (ii) a prescription drug and device and pharmacist
14 services portion of a health benefit plan on behalf of a plan sponsor including, but not limited to,
15 self-insured employers, insurance companies and labor unions; provided, however, that
16 “Pharmacy benefit manager” shall include a health benefit plan that does not contract with a
17 pharmacy benefit manager and administers its own: (a) prescription drug, prescription device or
18 pharmacist services; or (b) prescription drug and device and pharmacist services portion, unless
19 specifically exempted by the center.
20 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
21 amended by inserting after the definition of “Physician” the following definition:-
22 “Pipeline drugs”, prescription drug products containing a new molecular entity for which
23 the sponsor has submitted a new drug application or biologics license application and received an
24 action date from the federal Food and Drug Administration.
25 SECTION 3. Section 6 of said chapter 6D, as so appearing, is hereby amended by adding
26 the following paragraph:-
27 If the analysis of spending trends with respect to the pharmaceutical or biopharmaceutical
28 products increases the expenses of the commission, the estimated increases in the commission’s
29 expenses shall be assessed fully to pharmaceutical manufacturing companies and pharmacy
30 benefit managers in the same manner as the assessment under section 68 of chapter 118E. A
31 pharmacy benefit manager that is a surcharge payor subject to the preceding paragraph and
32 administers its own prescription drug, prescription device or pharmacist services or prescription
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33 drug and device and pharmacist services portion shall not be subject to additional assessment
34 under this paragraph.
35 SECTION 4. Section 8 of said chapter 6D, as so appearing, is hereby amended by
36 striking out, in line 32, the words “ and (xi) ” and inserting in place thereof the following words:-
37 (xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least 1 pharmacy
38 benefit manager; and (xiii).
39 SECTION 5. Said section 8 of said chapter 6D of the General Laws, as so appearing, is
40 hereby amended by inserting after the word “commission”, in line 59, the first time it appears,
41 the following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
42 manufacturing companies, testimony concerning factors underlying prescription drug costs and
43 price increases, the impact of manufacturer rebates, discounts and other price concessions on net
44 pricing, the availability of alternative drugs or treatments and any other matters as determined by
45 the commission.
46 SECTION 6. Said chapter 6D is hereby further amended by inserting after section 15 the
47 following section:-
48 Section 15A. (a) The commission shall conduct an annual study of pharmaceutical
49 manufacturing companies with pipeline drugs, generic drugs or biosimilar drug products that
50 may have a significant impact on statewide health care expenditures; provided, however, that the
51 commission may issue interim studies if it deems it necessary. The commission may contract
52 with a third-party entity to implement this section that has familiarity with the development and
53 approval of pharmaceuticals or biologics or studies and compares the clinical effectiveness and
54 value of prescription drugs.
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55 (b) A pharmaceutical manufacturing company shall, provide early notice to the
56 commission for: (i) a pipeline drug; (ii) an abbreviated new drug application for generic drugs,
57 upon submission to the federal Food and Drug Administration; or (iii) a biosimilar biologics
58 license application upon the receipt of an action date from the federal Food and Drug
59 Administration. The commission shall make early notice information available to the office of
60 Medicaid or another agency in addition to acute hospitals, ambulatory surgical centers and
61 surcharge payors, as deemed appropriate.
62 Early notice shall be submitted to the commission not later than 60 days after receipt of
63 the federal Food and Drug Administration action date or after the submission of an abbreviated
64 new drug application to the federal Food and Drug Administration action.
65 For each prescription drug product, early notice shall include a brief description of the: (i)
66 primary disease, health condition or therapeutic area being studied and the indication; (ii) route
67 of administration being studied; (iii) clinical trial comparators; and (iv) estimated year of market
68 entry. To the extent possible, information shall be collected using data fields consistent with
69 those used by the federal National Institutes of Health for clinical trials.
70 For each pipeline drug, early notice shall include whether the drug has been designated
71 by the federal Food and Drug Administration: (i) orphan drug; (ii) fast track; (iii) breakthrough
72 therapy; (iv) for accelerated approval; or (v) priority review for a new molecular entity.
73 Notwithstanding the foregoing, submissions for drugs in development that receive such a
74 designation by the federal Food and Drug Administration for new molecular entities shall be
75 provided as soon as practical upon receipt of the relevant designation.
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76 (c) The commission shall assess pharmaceutical manufacturing companies for the
77 implementation of this section in a similar manner to the annual registration fees and other
78 assessments related to the annual marketing disclosure reports required under section 2A of
79 chapter 111N.
80 (d) Notwithstanding any general or special law to the contrary, information provided
81 under this section shall be protected as confidential and shall not be a public record under clause
82 Twenty-sixth of section 7 of chapter 4 or under chapter 66.
83 SECTION 7. Said chapter 6D is hereby further amended by adding the following 2
84 sections:-
85 Section 20. (a) As used in this section, the following words shall have the following
86 meanings unless the context clearly requires otherwise:
87 “Eligible drug”, a (i) brand name drug or biologic, not including a biosimilar, that has a
88 launch wholesale acquisition cost of $50,000 or more for a 1-year supply or full course of
89 treatment; (ii) biosimilar drug that has a launch wholesale acquisition cost that is not at least 15
90 per cent lower than the referenced brand biologic at the time the biosimilar is launched; or (iii)
91 public health essential drug, as defined in section 239 of chapter 111, with a significant price
92 increase over a defined period of time as determined by the commission by regulation or with a
93 wholesale acquisition cost of $25,000 or more for a 1-year supply or full course of treatment.
94 “Manufacturer”, a pharmaceutical manufacturer of an eligible drug.
95 “Public health essential drug”, shall have the same meaning as defined in section 239 of
96 chapter 111.
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 97 (b) The commission shall review the impact of eligible drug costs on patient access;
98 provided, however, that the commission may prioritize the review of eligible drugs based on
99 potential impact to consumers.
100 In order to conduct a review of eligible drugs, the commission may require a
101 manufacturer to disclose to the commission within a reasonable time period information relating
102 to the manufacturer’s pricing of an eligible drug. The disclosed information shall be on a
103 standard reporting form developed by the commission with the input of the manufacturers and
104 shall include, but not be limited to:
105 (i) a schedule of the drug’s wholesale acquisition cost increases over the previous 5
106 calendar years;
107 (ii) the manufacturer’s aggregate, company-level research and development and other
108 relevant capital expenditures, including facility construction, for the most recent year for which
109 final audited data are available;
110 (iii) a written, narrative description, suitable for public release, of factors that contributed
111 to reported changes in wholesale acquisition cost during the previous 5 calendar years; and
112 (iv) any other information that the manufacturer wishes to provide to the commission or
113 that the commission requests.
114 (c) Based on the records furnished under subsection (b) and available information from
115 the center for health information and analysis or an outside third party, the commission shall
116 identify a proposed value for the eligible drug. The commission may request additional relevant
117 information that it deems necessary.
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118 Any information, analyses or reports regarding an eligible drug review shall be provided
119 to the manufacturer. The commission shall consider any clarifications or data provided by the
120 manufacturer with respect to the eligible drug. The commission shall not base its determination
121 on the proposed value of the eligible drug solely on the analysis or research of an outside third
122 party.
123 (d) If, after review of an eligible drug and after receiving information from the
124 manufacturer under subsections (b) or (e), the commission determines that the manufacturer’s
125 pricing of the eligible drug does not substantially exceed the proposed value of the drug, the
126 commission shall notify the manufacturer, in writing, of its determination and shall evaluate
127 other ways to mitigate the eligible drug’s cost in order to improve patient access to the eligible
128 drug. The commission may engage with the manufacturer and other relevant stakeholders,
129 including, but not limited to, patients, patient advocacy organizations, providers, provider
130 organizations and payers, to explore options for mitigating the cost of the eligible drug. Upon the
131 conclusion of a stakeholder engagement process under this subsection, the commission shall
132 issue recommendations on ways to reduce the cost of the eligible drug for the purpose of
133 improving patient access to the eligible drug. Recommendations may include, but not be limited
134 to: (i) an alternative payment plan or methodology; (ii) a bulk purchasing program; (iii) co-pay,
135 deductible, coinsurance or other cost-sharing restrictions; and (iv) a reinsurance program to
136 subsidize the cost of the eligible drug. The recommendations shall be publicly posted on the
137 commission’s website and provided to the clerks of the house of representatives and senate, the
138 joint committee on health care financing and the house and senate committees on ways and
139 means.
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140 (e) If, after review of an eligible drug, the commission determines that the manufacturer’s
141 pricing of the eligible drug substantially exceeds the proposed value of the drug, the commission
142 shall request that the manufacturer provide further information related to the pricing of the
143 eligible drug and the manufacturer’s reasons for the pricing not later than 30 days after receiving
144 the request.
145 (f) Not later than 60 days after receiving information from the manufacturer under
146 subsections (b) or (e), the commission shall confidentially issue a determination on whether the
147 manufacturer’s pricing of an eligible drug substantially exceeds the commission’s proposed
148 value of the drug. If the commission determines that the manufacturer’s pricing of an eligible
149 drug substantially exceeds the proposed value of the drug, the commission shall confidentially
150 notify the manufacturer, in writing, of its determination and require the manufacturer to enter
151 into an access improvement plan under section 21.
152 (g) Records disclosed by a manufacturer under this section shall: (i) be accompanied by
153 an attestation that all information provided is true and correct; (ii) not be public records under
154 clause Twenty-sixth of section 7 of chapter 4 or chapter 66; and (iii) remain confidential;
155 provided, however, that the commission may produce reports summarizing any findings;
156 provided further, that any such report shall not be in a form that identifies specific prices charged
157 for or rebate amounts associated with drugs by a manufacturer or in a manner that is likely to
158 compromise the financial, competitive or proprietary nature of the information.
159 Any request for further information made by the commission under subsection (e) or any
160 determination issued or written notification made by the commission under subsection (f) shall
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161 not be public records under said clause Twenty-sixth of said section 7 of said chapter 4 or said
162 chapter 66.
163 (h) If the manufacturer fails to timely comply with the commission’s request for records
164 under subsections (b) or (e), or otherwise knowingly obstructs the commission’s ability to issue
165 its determination under subsection (f), including, but not limited to, by providing incomplete,
166 false or misleading information, the commission may impose appropriate sanctions against the
167 manufacturer, including reasonable monetary penalties not to exceed $1,000,000, in each
168 instance. The commission shall seek to promote compliance with this section and shall only
169 impose a civil penalty on the manufacturer as a last resort.
170 (i) The commission shall adopt any written policies, procedures or regulations that the
171 commission determines are necessary to implement this section.
172 Section 21. (a) The commission shall establish procedures to assist manufacturers
173 in filing and implementing an access improvement plan.
174 Upon providing written notice provided under subsection (f) of section 20, the
175 commission shall require that a manufacturer whose pricing of an eligible drug substantially
176 exceeds the commission’s proposed value of the drug file an access improvement plan with the
177 commission. Not later than 45 days after receipt of a notice under subsection (g) of section 20, a
178 manufacturer shall: (i) file an access improvement plan; or (ii) provide written notice declining
179 the commission’s request.
180 (b) An access improvement plan shall: (i) be generated by the manufacturer; (ii) identify
181 the reasons for the manufacturer’s drug price; and (iii) include, but not be limited to, specific
182 strategies, adjustments and action steps the manufacturer proposes to implement to address the
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183 cost of the eligib