SENATE . . . . . . . . . . . . . . No. 2651
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Second General Court
(2021-2022)
_______________
SENATE, February 3, 2022.
The committee on Senate Ways and Means to whom was referred the Senate Bill relative
to pharmaceutical access, costs and transparency (Senate, No. 771), - reports, recommending that
the same ought to pass with an amendment substituting a new draft with the same title (Senate,
No. 2651).
For the committee,
Michael J. Rodrigues
 FILED ON: 2/3/2022
SENATE . . . . . . . . . . . . . . No. 2651
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 2020
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: (a) any drug approved through an
8 application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
9 is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
10 Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
11 application that was approved by the United States Secretary of Health and Human Services
12 under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
13 date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
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14 1984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 42
15 C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
16 under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
17 based on available data resources such as Medi-Span.
18 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
19 amended by inserting after the definition of “Disproportionate share hospital” the following
20 definition:-
21 “Early notice”, advanced notification by a pharmaceutical manufacturing company of a:
22 (i) new drug, device or other development coming to market; or (ii) a price increase, as described
23 in subsection (b) of section 15A.
24 SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further
25 amended by inserting after the definition of “Fiscal year” the following definition:-
26 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
27 abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
28 drug as defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
29 and was not originally marketed under a new drug application; or (iv) identified by the health
30 benefit plan as a generic drug based on available data resources such as Medi-Span.
31 SECTION 4. Said section 1 of said chapter 6D, as so appearing, is hereby further
32 amended by striking out, in line 189, the words “not include excludes ERISA plans” and
33 inserting in place thereof the following words:- include self-insured plans to the extent allowed
34 under the federal Employee Retirement Income Security Act of 1974.
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35 SECTION 5. Said section 1 of said chapter 6D, as so appearing, is hereby further
36 amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
37 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
38 preparation, propagation, compounding, conversion or processing of prescription drugs, directly
39 or indirectly, by extraction from substances of natural origin, independently by means of
40 chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
41 repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
42 “pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
43 under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
44 chapter 112.
45 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
46 directly or through a subsidiary provides pharmacy benefit management services for prescription
47 drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
48 insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
49 management services shall include, but not be limited to: (i) the processing and payment of
50 claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
51 of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
52 grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
53 drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
54 clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
55 covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
56 health benefit plan that does not contract with a pharmacy benefit manager and manages its own
57 prescription drug benefits unless specifically exempted by the commission.
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58 SECTION 6. Said section 1 of said chapter 6D, as so appearing, is hereby further
59 amended by inserting after the definition of “Physician” the following definition:-
60 “Pipeline drug”, a prescription drug product containing a new molecular entity for which
61 the sponsor has submitted a new drug application or biologics license application and received an
62 action date from the United States Food and Drug Administration.
63 SECTION 7. Said section 1 of said chapter 6D, as so appearing, is hereby further
64 amended by adding the following definition:-
65 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
66 1395w-3a(c)(6)(B).
67 SECTION 8. Said chapter 6D is hereby further amended by striking out section 2A, as so
68 appearing, and inserting in place thereof the following section:-
69 Section 2A. The commission shall keep confidential all nonpublic clinical, financial,
70 strategic or operational documents or information provided or reported to the commission in
71 connection with any care delivery, quality improvement process, performance improvement
72 plan, early notification or access and affordability improvement plan activities authorized under
73 sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under section 2GGGG of chapter 29 and
74 shall not disclose the information or documents to any person without the consent of the payer,
75 provider or pharmaceutical manufacturing company providing or reporting the information or
76 documents under said sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under said section
77 2GGGG of said chapter 29, except in summary form in evaluative reports of such activities or
78 when the commission believes that such disclosure should be made in the public interest after
79 taking into account any privacy, trade secret or anticompetitive considerations. The confidential
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80 information and documents shall not be public records and shall be exempt from disclosure
81 under clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66.
82 SECTION 9. Section 4 of said chapter 6D, as so appearing, is hereby amended by
83 striking out, in lines 6 and 7, the word “manufacturers” and inserting in place thereof the
84 following words:- manufacturing companies, pharmacy benefit managers.
85 SECTION 10. Section 6 of said chapter 6D, as so appearing, is hereby amended by
86 inserting after the word “center”, in line 1, the following words:- , pharmaceutical and
87 biopharmaceutical manufacturing company, pharmacy benefit manager.
88 SECTION 11. Said section 6 of said chapter 6D, as so appearing, is hereby further
89 amended by striking out, in lines 5 and 36, the figure “33” and inserting in place thereof, in each
90 instance, the following figure:- 25.
91 SECTION 12. Said section 6 of said chapter 6D, as so appearing, is hereby further
92 amended by adding the following paragraph:-
93 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
94 companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
95 appropriated by the general court for the expenses of the commission minus amounts collected
96 from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
97 dissemination of reports and information; and (iii) federal matching revenues received for these
98 expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical and
99 biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
100 and distribution determined by the commission, pay to the commonwealth an amount of the
101 estimated expenses of the commission attributable to the commission’s activities under sections
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102 8, 9, 15A, 20 and 21. A pharmacy benefit manager that is a surcharge payor subject to the
103 preceding paragraph and manages its own prescription drug benefits shall not be subject to
104 additional assessment under this paragraph
105 SECTION 13. Section 8 of said chapter 6D, as so appearing, is hereby amended by
106 inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
107 manager, pharmaceutical manufacturing company.
108 SECTION 14. Said section 8 of said chapter 6D, as so appearing, is hereby further
109 amended by inserting after the word “organizations”, in line 14, the following words:- ,
110 pharmacy benefit managers, pharmaceutical manufacturing companies.
111 SECTION 15. Said section 8 of said chapter 6D, as so appearing, is hereby further
112 amended by striking out, in line 32, the words “and (xi)” and inserting in place thereof the
113 following words:- (xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least
114 1 representative of the pharmacy benefit management industry; and (xiii).
115 SECTION 16. Said section 8 of said chapter 6D, as so appearing, is hereby further
116 amended by striking out, in line 48, the first time it appears, the word “and”.
117 SECTION 17. Said section 8 of said chapter 6D, as so appearing, is hereby further
118 amended by inserting after the word “commission”, in line 59, the first time it appears, the
119 following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
120 manufacturing companies, testimony concerning factors underlying prescription drug costs and
121 price increases including, but not limited to, the initial prices of drugs coming to market and
122 subsequent price increases, changes in industry profit levels, marketing expenses, reverse
123 payment patent settlements, the impact of manufacturer rebates, discounts and other price
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124 concessions on net pricing, the availability of alternative drugs or treatments and any other
125 matters as determined by the commission.
126 SECTION 18. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
127 hereby amended by striking out the second sentence and inserting in place thereof the following
128 2 sentences:-
129 The report shall be based on the commission’s analysis of information provided at the
130 hearings by witnesses, providers, provider organizations, payers, pharmaceutical manufacturing
131 companies and pharmacy benefit managers, registration data collected under section 11, data
132 collected or analyzed by the center under sections 8, 9, 10 and 10A of chapter 12C and any other
133 available information that the commission considers necessary to fulfill its duties under this
134 section as defined in regulations promulgated by the commission. To the extent practicable, the
135 report shall not contain any data that is likely to compromise the financial, competitive or
136 proprietary nature of the information.
137 SECTION 19. Section 9 of said chapter 6D, as so appearing, is hereby amended by
138 inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
139 manager, pharmaceutical manufacturing company.
140 SECTION 20. Said chapter 6D is hereby further amended by inserting after section 15
141 the following section:-
142 Section 15A. (a) A pharmaceutical manufacturing company shall provide early notice to
143 the commission in a manner described in this section for a: (i) pipeline drug; (ii) generic drug; or
144 (iii) biosimilar drug. The commission shall provide non-confidential information received under
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145 this section to the office of Medicaid, the division of insurance and the group insurance
146 commission.
147 Early notice under this subsection shall be submitted to the commission in writing not
148 later than 30 days after receipt of the United States Food and Drug Administration approval date.
149 For each pipeline drug, early notice shall include a brief description of the: (i) primary
150 disease, health condition or therapeutic area being studied and the indication; (ii) route of
151 administration being studied; (iii) clinical trial comparators; and (iv) estimated date of market
152 entry. To the extent possible, information shall be collected using data fields consistent with
153 those used by the federal National Institutes of Health for clinical trials.
154 For each pipeline drug, early notice shall include whether the drug has been designated
155 by the United States Food and Drug Administration: (i) as an orphan drug; (ii) for fast track; (iii)
156 as a breakthrough therapy; (iv) for accelerated approval; or (v) for priority review for a new
157 molecular entity; provided, however, that notwithstanding clause (v), submissions for drugs in
158 development that are designated as new molecular entities by the United States Food and Drug
159 Administration shall be provided as soon as practical upon receipt of the relevant designations.
160 For each generic drug, early notice shall include a copy of the drug label approved by the United
161 States Food and Drug Administration.
162 (b) A pharmaceutical manufacturing company shall provide early notice to the
163 commission if it plans to increase the wholesale acquisition cost of a: (i) brand-name drug by
164 more than 15 per cent per wholesale acquisition cost unit during any 12-month period; or (ii)
165 generic drug with a significant price increase as determined by the commission during any 12-
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166 month period. The commission shall provide non-confidential information received under this
167 section to the office of Medicaid, the division of insurance and the group insurance commission.
168 Early notice under this subsection shall be submitted to the commission in writing not
169 less than 60 days before the planned effective date of the increase.
170 A pharmaceutical manufacturing company required to notify the commission of a price
171 increase under this subsection shall, not less than 30 days before the planned effective date of the
172 increase, report to the commission any information regarding the price increase that is relevant to
173 the commission including, but not limited to: (i) drug identification information; (ii) drug sales
174 volume information; (iii) wholesale price and related information for the drug; (iv) net price and
175 related information for the drug; (v) drug acquisition information, if applicable; (vi) revenue
176 from the sale of the drug; and (vii) manufacturer costs.
177 (c) The commission shall conduct an annual study of pharmaceutical manufacturing
178 companies subject to the requirements in subsections (a) and (b). The commission may contract
179 with a third-party entity to implement this section.
180 (d) Notwithstanding any general or special law to the contrary, information provided
181 under this section shall be protected as confidential and shall not be a public record under clause
182 Twenty-sixth of section 7 of chapter 4 or under chapter 66.
183 (e) If a