SENATE DOCKET, NO. 1980        FILED ON: 1/18/2019

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 653

The Commonwealth of Massachusetts

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PRESENTED BY:

Bruce E. Tarr

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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 prescription drug pricing.

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PETITION OF:

SENATE DOCKET, NO. 1980        FILED ON: 1/18/2019

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 653

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-First General Court
(2019-2020)

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An Act relative to prescription drug pricing.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

Section 1. Chapter 112 of the general laws is hereby amended by inserting after section 274 the following new section:-:

Section 275. Disclosure of prescription drug consumer cost burden; certification

As used in this Section:

(1) "Excess consumer cost burden" means a cost burden amount  charged to an enrollee for a covered prescription drug that is greater than the amount that an enrollee's health insurance issuer pays, or would pay absent the enrollee cost sharing, after accounting for rebates, or where an enrollee is subject to a coinsurance amount of less than one hundred percent, a prorated amount of the issuer cost based on the enrollee's coinsurance amount.

(2) "Health benefit plan", "plan", "benefit", or "health insurance coverage" means services consisting of medical care provided directly through insurance, reimbursement, or other means, and including items and services paid for as medical care under any hospital or medical service policy or  certificate, hospital or medical service plan contract, preferred provider organization, or health maintenance organization contract offered by a health insurance issuer. However, excepted benefits are not included as a "health benefit plan".

(3) "Health insurance issuer" means any entity that offers health insurance coverage through a plan, policy, or certificate of insurance subject to state law that regulates the business of insurance. "Health insurance issuer" shall also include a health maintenance organization, as defined and licensed pursuant chapter 175 or chapter 176A through 176W

(4) "Rebates" means: (a) Negotiated price concessions, including but not limited to base rebates and reasonable estimates of any price protection rebates and performance-based rebates that may accrue directly or indirectly to the health insurance issuer during the coverage year from a manufacturer, dispensing pharmacy, or other party to the transaction.

(b) Reasonable estimates of any fees and other administrative costs that are passed through to the health insurance issuer and serve to reduce the health insurance issuer's prescription drug liabilities for the coverage year.

B. In the case of a health insurance issuer that offers or renews a health benefit plan for sale in the state on or after January 1, 2019, if the health insurance issuer may charge enrollees cost sharing amounts that may result in an excess consumer cost burden for covered prescription drugs, the health insurance issuer shall disclose to enrollees and prospective enrollees the fact that enrollees may be subject to an excess consumer cost burden. The notice shall be provided in health benefit plan documents, including but not limited to inclusion in evidence of coverage materials,formulary or preferred drug guides, and all marketing materials.

C. A health insurance issuer that offers or renews a health benefit plan for sale in the state on or after January 1, 2019, shall annually certify to the commissioner of insurance that, during the prior benefit year, the health insurance issuer made available to enrollees at the point of sale at least an amount greater than fifty percent of rebates received by the insurer.

D. In complying with the provisions of this Section a health insurance issuer shall not publish or otherwise reveal information regarding the actual amount of rebates the health insurance issuer receives, including but not limited to information regarding the amount of rebates it receives on a product, manufacturer, or pharmacy specific basis. Such information is a trade secret, is not a public record as defined under chapter 66 of the general laws and shall not be disclosed directly or indirectly. A health insurance issuer shall impose the confidentiality protections of this Section on any third parties or vendors with which it contracts that may receive or have access to rebate information.

E. The commissioner of insurance shall have enforcement authority over this Section. Among other enforcement mechanisms, the commissioner of insurance may, after a hearing, suspend or revoke a health insurance issuer's license for failure to comply with the requirements of this Section, or providing a false certification under this Section.

F. Notwithstanding any provision of law to the contrary, the provisions of this Section shall apply to any pharmacy benefit manager that has a contract with the executive office of health and human services or is a subcontractor with a managed care organization that has a contract with the executive office of health and human services for the provision of services in the Medicaid program.