A bill for an act
relating to health; prohibiting excessive price increases by manufacturers to generic
or off-patent drugs; authorizing the attorney general to take action against
manufacturers for certain price increases; prohibiting withdrawal of certain generic
or off-patent drugs sales; establishing a prescription drug affordability board and
prescription drug affordability advisory council; providing for prescription drug
cost reviews and remedies; providing appointments; imposing civil penalties;
requiring a report; appropriating money; amending Minnesota Statutes 2022,
section 151.071, subdivisions 1, 2; proposing coding for new law in Minnesota
Statutes, chapter 62J.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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For purposes of sections 62J.841 to 62J.845, the following
definitions apply.
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"Consumer Price Index" means the Consumer Price
Index, Annual Average, for All Urban Consumers, CPI-U: U.S. City Average, All Items,
reported by the United States Department of Labor, Bureau of Labor Statistics, or its
successor or, if the index is discontinued, an equivalent index reported by a federal authority
or, if no such index is reported, "Consumer Price Index" means a comparable index chosen
by the Bureau of Labor Statistics.
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"Generic or off-patent drug" means any prescription
drug for which any exclusive marketing rights granted under the Federal Food, Drug, and
Cosmetic Act, section 351 of the federal Public Health Service Act, and federal patent law
have expired, including any drug-device combination product for the delivery of a generic
drug.
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"Manufacturer" has the meaning provided in section 151.01,
subdivision 14a.
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"Prescription drug" means a drug for human use subject
to United States Code, title 21, section 353(b)(1).
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"Wholesale acquisition cost" has the meaning
provided in United States Code, title 42, section 1395w-3a.
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"Wholesale distributor" has the meaning provided in
section 151.441, subdivision 14.
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No manufacturer shall impose, or cause to be imposed, an
excessive price increase, whether directly or through a wholesale distributor, pharmacy, or
similar intermediary, on the sale of any generic or off-patent drug sold, dispensed, or
delivered to any consumer in the state.
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A price increase is excessive for purposes of this
section when:
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(1) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds:
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(i) 15 percent of the wholesale acquisition cost over the immediately preceding calendar
year; or
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(ii) 40 percent of the wholesale acquisition cost over the immediately preceding three
calendar years; and
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(2) the price increase, adjusted for inflation utilizing the Consumer Price Index, exceeds
$30 for:
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(i) a 30-day supply of the drug; or
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(ii) a course of treatment lasting less than 30 days.
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It is not a violation of this section for a wholesale distributor or
pharmacy to increase the price of a generic or off-patent drug if the price increase is directly
attributable to additional costs for the drug imposed on the wholesale distributor or pharmacy
by the manufacturer of the drug.
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Any manufacturer that sells, distributes, delivers, or offers for sale any generic or
off-patent drug in the state must maintain a registered agent and office within the state.
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The commissioner of management and budget and any
other state agency that provides or purchases a pharmacy benefit except the Department of
Human Services, and any entity under contract with a state agency to provide a pharmacy
benefit other than an entity under contract with the Department of Human Services, shall
notify the manufacturer of a generic or off-patent drug, the attorney general, and the Board
of Pharmacy of any price increase that the commissioner or entity believes may violate
section 62J.842.
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(a) Within 45 days of receiving a notice under subdivision
1, the manufacturer of the generic or off-patent drug shall submit a drug cost statement to
the attorney general. The statement must:
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(1) itemize the cost components related to production of the drug;
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(2) identify the circumstances and timing of any increase in materials or manufacturing
costs that caused any increase during the preceding calendar year, or preceding three calendar
years as applicable, in the price of the drug; and
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(3) provide any other information that the manufacturer believes to be relevant to a
determination of whether a violation of section 62J.842 has occurred.
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(b) The attorney general may investigate whether a violation of section 62J.842 has
occurred, is occurring, or is about to occur, in accordance with section 8.31, subdivision 2.
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(a) On petition of the attorney general, a court may issue an
order:
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(1) compelling the manufacturer of a generic or off-patent drug to:
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(i) provide the drug cost statement required under subdivision 2, paragraph (a); and
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(ii) answer interrogatories, produce records or documents, or be examined under oath,
as required by the attorney general under subdivision 2, paragraph (b);
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(2) restraining or enjoining a violation of sections 62J.841 to 62J.845, including issuing
an order requiring that drug prices be restored to levels that comply with section 62J.842;
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