SECTION 1.  Section 3 of chapter 175H of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by inserting before the word “Any”, in line 1, the following:- (a).

SECTION 2.  Said section 3 of said chapter 175H, as so appearing, is hereby further amended by inserting after word “rebate”, in line 7, the following words:- except as provided in subsection (b),.

SECTION 3. Said section 3 of said chapter 175H, as so appearing, is hereby further amended by adding the following 3 subsections:-

(b) This section shall not apply to a discount, rebate, product voucher or other reduction in an individual’s out-of-pocket expenses, including co-payments and deductibles on a prescription drug, biologic or vaccine provided by a pharmaceutical manufacturing company, as defined in section 1 of chapter 111N, that is made available to an individual if the discount, rebate, product voucher or other reduction is provided directly or electronically to the individual or through a point of sale or mail-in rebate, or through similar means; provided, however, that a pharmaceutical manufacturing company shall not exclude nor favor any pharmacy in the redemption of such discount, rebate, product voucher or other expense reduction offer to an individual.

(c) This subsection shall not: (i) restrict a pharmaceutical manufacturing company with regard to how it distributes a prescription drug, biologic or vaccine; or (ii) restrict a carrier or a health maintenance organization, as defined in section 1 of chapter 118G, with regard to how its plan design will treat such discounts, rebates, product voucher or other reduction in out-of-pocket expenses.

(d) For purposes of the federal Health Insurance Portability and Accountability Act of 1996, hereinafter HIPAA, and regulations promulgated under HIPAA, nothing in this subsection shall be deemed to require or allow the use or disclosure of health information in any manner that does not otherwise comply with HIPAA or regulations promulgated under HIPAA.

SECTION 4.  The division of health care finance and policy, in consultation with the department of public health shall conduct an analysis of the impact on health care costs of the use of discounts, rebate, product voucher or other reduction for prescription drugs.  The report shall include, but not be limited to, an analysis of the impact on commercial health insurance premiums and on premiums associated with the group insurance commission, and a comparison of any change in utilization of generic versus brand name prescription drugs.  The division shall file a report of its findings with the clerks of the senate and house of representatives, the house and senate committees on ways and means and the joint committee on health care financing by not later than March 15, 2013.