Amendment #1057, as changed to H3800

MassHealth Drug Pricing

Mr. Coppinger of Boston moves to amend the bill by striking out section 5 and inserting in place thereof the following section:-

SECTION 5. Chapter 6D of the General Laws is hereby amended by inserting after section 8 the following section:

Section 8A. (a) The commission may require a manufacturer of a prescribed drug specified in subsection (b) to disclose to the commission within a reasonable time information relating to the manufacturer’s pricing of that drug, on a standard reporting form developed by the commission with the input of the manufacturers, which includes but shall not be limited to, the following:

(1) A schedule of drug’s wholesale acquisition cost increases over the previous five calendar years;

(2) The manufacturer's aggregate, company-level research and development and other relevant capital expenditures, including facility construction, for the most recent year for which final audited data are available;

(3) A written, narrative description, suitable for public release, of factors that contributed to reported changes in wholesale acquisition cost during the prior five calendar years; and

(4) Any other information that the manufacturer wishes to provide to the commission.

Based on the records furnished, the commission may identify a proposed supplemental rebate of a prescribed drug specified in subsection (b). The commission may request additional relevant information that it deems necessary to identify a proposed supplemental rebate.

(b) A manufacturer of the following prescribed drugs must comply with the requirements set forth in this section: a drug for which the executive office of health and human services was unable to successfully conclude supplemental rebate negotiations with the manufacturer of the drug under subsections (a) and (b) of section 12A of chapter 118E, and for which the commission has  received notice from the secretary of health and human services under subsection (e) of said section 12A of said chapter 118E.

(c) Records disclosed by a manufacturer under subsection (a) shall not be public records under section 7 of chapter 4 or chapter 66 and shall remain confidential; provided, however, that the commission may produce reports summarizing any findings; provided that any such report shall not be in a form that identifies specific prices charged for or rebate amounts associated with drugs by a manufacturer, or in a manner that is likely to compromise the financial, competitive, or proprietary nature of the information.

(d) If, after review of any records furnished to the commission under subsection (a), the commission determines that the drug manufacturer's pricing of the drug is potentially unreasonable or excessive in relation to the commission’s proposed supplemental rebate amount under subsection (a), the commission shall, with 30 days advance notice to the drug manufacturer, request that the manufacturer provide further information related to the pricing of the prescribed drug and the manufacturer's  justification for the pricing. In addition to the drug manufacturer, the commission may identify other relevant parties including patients, providers, provider organizations and payers who may provide information to the commission.

(e) Any cost-effectiveness analysis or research provided by a relevant party must (i) include transparent methodologies and models; (ii) clearly communicate all assumptions and limitations of research findings in the context of the results; and (iii) present results in a way that properly reflects different outcomes for different subpopulations.

(f) Any information, analyses or reports regarding a particular drug reviewed or used in creating the supplemental rebate shall be provided to the manufacturer of the drug for review and input. The commission shall consider any clarifications or data provided by the manufacturer with respect to its drug. The commission may not base a determination on the supplemental rebate solely on the analysis or research of an outside third party.

(g) Within 60 days of the manufacturer providing the information required under subsection (d), the commission shall issue a determination concerning the reasonableness of the manufacturer’s pricing of the drug.

(h) In the event the drug manufacturer does not timely comply with the commission's request for records under subsection (a), or otherwise willfully and knowingly obstructs the commission's ability to issue the determination described in  subsection (e), including by willfully and knowingly providing incomplete, false or misleading information, the  commission may impose appropriate sanctions against the drug manufacturer, including  reasonable monetary penalties not to exceed $500,000. The commission shall seek to promote compliance with this section and shall only impose a civil penalty on the drug manufacturer as a last resort.

(i) The commission shall adopt any written policies, procedures or regulations the commission determines necessary to implement this section.

And further moves to amend the bill by striking out section 29 and inserting in place thereof the following section:-

SECTION 29. Said chapter 118E is hereby amended by inserting after section 12 the following section:

Section 12A. (a) Notwithstanding any general or special law to the contrary and subject to required federal approvals, the executive office of health and human services may directly negotiate supplemental rebate agreements with manufacturers of prescribed drugs; provided that the executive office shall not be subject to any otherwise applicable requirements set forth in 801 CMR 21.00 or any successor regulation; and provided further, that such agreements maximize value to the commonwealth. Such agreements may be based on the value, efficacy or outcomes of the drug. Prior to seeking a supplemental rebate agreement with a manufacturer, the executive office shall take into consideration a drug’s actual cost to the commonwealth and whether the manufacturer of the drug is providing significant discounts relative to other drugs covered by MassHealth.

(b) In the event a manufacturer of prescribed drugs and the executive office are unable to successfully conclude negotiations for a supplemental rebate agreement pursuant to subsection (a) and the drug that is the subject of the negotiations is projected to exceed a post-rebate cost per utilizer of $25,000 per year or a post-rebate aggregate annual cost to MassHealth of $10,000,000, the executive office may identify a proposed supplemental rebate amount for the drug and may afford interested persons an opportunity to present data, views or arguments for a period of not less than 21 days, and, at the option of the secretary of health and human services, hereinafter the secretary, hold a public hearing as to the proposed value of the drug. In establishing the proposed supplemental rebate with respect to a drug, the executive office may consider factors including clinical efficacy and outcomes, publicly available information relating to the pricing of the drug, including publicly available information relating to prices paid by other developed nations, the drug’s net price to the Medicaid program as compared to its therapeutic benefits, including the seriousness and prevalence of the disease or condition that is treated by the drug, the extent of utilization of the drug, the likelihood that the use of the drug will reduce the need for other medical care, the number of manufacturers that produce the drug, whether there are pharmaceutical equivalents of the drug, analyses by independent third parties, any information supplied by the manufacturer and other appropriate measures. After consideration of such information, including the public comments or testimony received, the executive office shall make any necessary updates to the proposed supplemental rebate for the drug. The executive office may engage the manufacturer of the drug in further negotiations under subsection (a) at any point during this process, and shall, at minimum, solicit further negotiations with the drug manufacturer after identifying the proposed supplemental rebate amount for the drug. The executive office may not disclose any confidential or proprietary information, including but not limited to drug rebate or pricing information, in a manner that would allow for the identification of an individual drug, therapeutic class of drugs, or manufacturer, or in a manner that is likely to compromise the financial, competitive, or proprietary nature of the information. All such information shall not be considered public records under section 7 of chapter 4 and under chapter 66, and shall be regarded as confidential and proprietary.

(c) If the executive office relies upon any third-party to provide cost-effectiveness analysis or research related to the supplemental rebate amount, such analysis or research must (i) include transparent methodologies and models; (ii) clearly communicate all assumptions and limitations of research findings in the context of the results; and (iii) present results in a way that properly reflects different outcomes for different subpopulations.

(d) Any information, analyses or reports regarding a particular drug reviewed or used in creating the supplemental rebate shall be provided to the manufacturer of the drug for review and input. The executive office shall consider any clarifications or data provided by the manufacturer with respect to its drug.

(e) In the event a manufacturer of prescribed drugs and the executive office are unable to successfully conclude negotiations for a supplemental rebate agreement pursuant to subsection (a) after the process set forth in subsection (b), the secretary may refer the drug manufacturer to the health policy commission for review under section 8A of chapter 6D.

(f) In the event that the secretary and the manufacturer have previously agreed to a supplemental rebate for a drug pursuant to subsection (a), the secretary shall not initiate further negotiations, and the drug manufacturer shall not be referred to the commission, for any additional supplemental rebates for the duration of the rebate agreement. No additional supplemental rebates shall be entered into by the manufacturer and the executive office pursuant to subsection (a) with respect to a drug that is subject to an existing supplemental rebate agreement with MassHealth, allowed under applicable state and federal laws.

(g) If the health policy commission determines that a manufacturer’s pricing of a drug is unreasonable or excessive in relation to the commission’s proposed net price, factoring in the proposed supplemental rebate amount, pursuant to section 8A of chapter 6D, and the executive office and the manufacturer are unable to successfully complete negotiations for a supplemental rebate agreement, the secretary may subject the drug to actions authorized by the drug management program administered by MassHealth, including but not limited to prior authorization, step therapy, generic drug promotion, quantity limits and the maximum allowable cost.

(h) The executive office shall adopt any written policies, procedures or regulations necessary to implement this section.


Additional co-sponsor(s) added to Amendment #1057, as changed to H3800

MassHealth Drug Pricing

Representative:

Paul McMurtry

Kenneth I. Gordon

John J. Lawn, Jr.