Amendment 23 - Withdrawn

Amendment ID: S2397-23

Amendment 23

Prescription Drug Transparency

Mr. Boncore moves that the proposed new draft be amended by renumbering Sections 35, 36, 37, 38, 39, 40, and 41 as Sections 27, 28, 29, 30, 31, 32 and 33, respectively and, further, striking out Sections 1-34, 42 and 43 and inserting in place thereof the following sections:-

SECTION 1. Section 1 of chapter 6D, as appearing in the 2016 Official Edition, is hereby amended by inserting after the definition of “Disproportionate share hospital” the following definition:-

“Early notice”, advanced notification by a pharmaceutical manufacturing company of a new drug, device or other development coming to market.

SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further amended by inserting after the definition of “Performance penalty” the following 3 definitions:-

“Pharmaceutical manufacturing company”, any entity engaged in the production, preparation, propagation, compounding, conversion or processing of prescription drugs, either directly or indirectly, by extraction from substances of natural origin, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis, or any entity engaged in the packaging, repackaging, labeling, relabeling or distribution of prescription drugs; provided however, that “pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed pursuant to section 36A of chapter 112 or a retail pharmacist registered pursuant to section 38 of said chapter 112.

“Pharmacy benefit manager”, any person, business or entity, however organized, that administers, either directly or through its subsidiaries, pharmacy benefit services for prescription drugs and devices on behalf of health benefit plan sponsors, including, but not limited to, self-insured employers, insurance companies and labor unions.

“Pharmacy benefit services” shall include, but not be limited to: formulary administration; drug benefit design; pharmacy network contracting; pharmacy claims processing; mail and specialty drug pharmacy services; and cost containment, clinical, safety, adherence programs for pharmacy services. For the purposes of the chapter, a health benefit plan that does not contract with a pharmacy benefit manager shall be a pharmacy benefit manager.

SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further amended by inserting after the definition of “Physician” the following definition:-

“Pipeline drugs”, prescription drug products containing a new molecular entity for which the sponsor has submitted a new drug application or biologics license application and received an action date from the federal Food and Drug Administration.

SECTION 4. Section 4 of said chapter 6D, as so appearing, is hereby amended by striking out, in lines 6 and 7, the word “manufacturers” and inserting in place thereof the following words:- manufacturing companies, pharmacy benefit managers.

SECTION 5. Section 8 of said chapter 6D, as so appearing, is hereby amended by inserting after the word “organization” , in lines 6 and 7, the following words:- , pharmacy benefit manager, pharmaceutical manufacturing company.

SECTION 6. Said section 8 of said chapter 6D, as so appearing, is hereby further amended by inserting after the word “organizations”, in line 14, the following words:- , pharmacy benefit managers, pharmaceutical manufacturing companies.

SECTION 7. Said section 8 of said chapter 6D, as so appearing, is hereby further amended by striking out, in lines 32 and 33 , the words “and (xi) any witness identified by the attorney general or the center” and inserting in place thereof the following words:- (xi) 2 pharmacy benefit managers; (xii) 3 pharmaceutical manufacturing companies, 1 of which shall be representative of a publicly traded company that manufactures specialty drugs, 1 of which shall be representative of and doing business in generic drug manufacturing and 1 of which shall have been in existence for fewer than 10 years; and (xiii) any witness identified by the attorney general or the center.

SECTION 8. Said section 8 of said chapter 6D, as so appearing, is hereby further amended by striking out, in line 48, the first time it appears, the word “and”.

SECTION 9. Said section 8 of said chapter 6D, as so appearing, is hereby further amended by inserting after the word “commission”, in line 59, the first time it appears, the following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical manufacturing companies, testimony that is suitable for public release and that is not likely to compromise the financial, competitive or proprietary nature of any information and data concerning factors underlying prescription drug costs and price increases; the impact of aggregate manufacturer rebates, discounts and other price concessions on net pricing; and any other matters as determined by the commission. No pharmaceutical manufacturing company identified as a witness under this section, or any testimony by any such company, shall be subject to the provisions of section 17 of chapter 12C.

SECTION 10. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:- The report shall be based on the commission's analysis of information provided at the hearings by witnesses, providers, provider organizations, insurers, pharmaceutical manufacturing companies and pharmacy benefit managers, registration data collected pursuant to section 11, data collected or analyzed by the center pursuant to sections 8, 9, 10,10A and 10B of chapter 12C and any other available information that the commission considers necessary to fulfill its duties in this section, as defined in regulations promulgated by the commission.

SECTION 11. Section 9 of said chapter 6D, as so appearing, is hereby amended by inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit manager, pharmaceutical manufacturing company.

SECTION 12. Said chapter 6D is hereby further amended by inserting after section 15 the following section:-

Section 15A. (a) The commission shall develop, implement and promote an evidence based outreach and education program to support the therapeutic and cost-effective utilization of prescription drugs for health care practitioners authorized to prescribe and dispense prescription drugs including, but not limited to, physicians, podiatrists and pharmacists. The commission shall develop the program in consultation with health care practitioners authorized to prescribe and dispense prescription drugs including, but not limited to, physicians, podiatrists, pharmacists, nurses, private insurers, hospitals, pharmacy benefit managers, consumers, the MassHealth drug utilization review board, the University of Massachusetts medical school and researchers and organizations engaged in the development, training and deployment of health practitioner education outreach programs.

(b) The program shall provide outreach to: (i) health care practitioners who participate in: (A) MassHealth; (B) the subsidized catastrophic prescription drug insurance program established in section 39 of chapter 19A; and (C) other publicly-funded, contracted or subsidized health care programs; (ii) academic medical centers; and (iii) other health care practitioners authorized to prescribe and dispense prescription drugs. The program shall include in-person visits to prescribers by physicians, podiatrists, pharmacists and nurses that utilize evidence-based materials and borrowing methods from behavioral science, educational theory and, where appropriate, pharmaceutical industry data and outreach techniques; provided, however, that the program shall inform prescribers about drug marketing intended to circumvent competition from generic or other therapeutically-equivalent pharmaceutical alternatives or other evidence-based treatment options, if applicable. The commission shall, to the extent possible, utilize or incorporate into its program other independent educational resources or models proven effective in promoting high quality, evidenced-based, cost-effective information regarding the effectiveness and safety of prescription drugs.

(c) Annually, not later than April 1, the commission shall report on the operation of the program including, but not limited to, information on the outreach and education components of the program, revenues, expenditures and balances, including an accounting of the estimated expenses of the program for the following year, and savings attributable to the program in health care programs funded by the commonwealth. The report shall be made publicly available on the commission’s website.

(d) The commission shall undertake a public education initiative to inform residents of the commonwealth about clinical trials and drug safety information.

(e) The commission may establish and collect fees for subscriptions and contracts with private health care payers related to this section. The commission may seek funding from nongovernmental health access foundations and undesignated drug litigation settlement funds associated with pharmaceutical marketing and pricing practices.

SECTION 13. Said chapter 6D is hereby further amended by adding the following section:-

Section 20. (a) In the course of its duties the commission may contract with a third-party entity, such as an accounting firm, to conduct an annual study of pharmaceutical manufacturers with pipeline drugs, generic drugs or biosimilar drugs that may have a significant impact on state health care expenditures.

(b) For purposes of this section, early notice shall be provided for the following:

(1) Pipeline drugs; and

(2) All biosimilar biologics license applications (BLA), upon the receipt of an action date from the FDA. (c) In connection with the annual study, the applicant for a pipeline brand or biosimilar shall provide the commission or the contracted third-party entity with a brief description of the following for each drug, using data fields consistent with those employed by the United States National Institutes of Health in clinicaltrials.gov, if applicable:

(1) The primary disease, health condition or therapeutic area being studied and the indication;

(2) The routes of administration being studied;

(3) Clinical trial comparators, if applicable; and

(4) Estimated year of market entry.

(d) As part of such submission, manufacturers shall also report the receipt of any of the following designations from the FDA for each pipeline drug:

(1) Orphan Drug;

(2) Fast Track;

(3) Breakthrough Therapy;

(4) Accelerated Approval; or

(5) Priority Review for New Molecular Entities NMEs.

(e) The data submissions required by this section shall be submitted to the commission or the contracted third-party entity no later than 60 days after receipt of the FDA action date, provided, however, that for drugs in development that receive any of the FDA designations listed in subsection (d) for NMEs, such submissions shall be provided as soon as practical upon receipt of the relevant designation.

(f) Any study conducted pursuant to this section shall be funded by annual registration fees and any other assessments that accompany the annual marketing disclosure reports required pursuant to chapter 111N.

(g) Notwithstanding any general or special law to the contrary, information provided pursuant to this section shall be protected as confidential and shall not be a public record pursuant to clause Twenty-sixth of section 7 of chapter 4 or chapter 66.

SECTION 14. Section 1 of chapter 12C of the General Laws, as so appearing, is hereby amended by inserting after the definition of “Patient-centered medical home” the following 3 definitions:-

“Pharmacy benefit manager”, any person, business, or entity, however organized, that administers, either directly or through its subsidiaries, pharmacy benefit services for prescription drugs and devices on behalf of health benefit plan sponsors, including, but not limited to, self-insured employers, insurance companies and labor unions;

“Pharmacy benefit services” shall include, but not be limited to, formulary administration; drug benefit design; pharmacy network contracting; pharmacy claims processing; mail and specialty drug pharmacy services; and cost containment, clinical, safety, and adherence programs for pharmacy services. For the purposes of this section, a health benefit plan that does not contract with a pharmacy benefit manager shall be a pharmacy benefit manager, unless specifically exempted.

SECTION 15. Said section 1 of said chapter said 12C, as so appearing, is hereby further amended by adding the following definition:-

“Wholesale acquisition cost”, the cost of a prescription drug as defined in 42 U.S.C. §1395w-3a(c)(6)(B).

SECTION 16. Section 3 of said chapter 12C, as so appearing, is hereby amended by inserting after the word “organizations”, in lines 13 and 14, the following words:- , pharmaceutical manufacturing companies, pharmacy benefit managers.

SECTION 17. Said section 3 of said chapter 12C, as so appearing, is hereby further amended by striking out, in line 24, the words “and payer” and inserting in place thereof the following words:- , payer, pharmaceutical manufacturing company and pharmacy benefit manager.

SECTION 18. Section 5 of said chapter 12C, as so appearing, is hereby amended by inserting after the word “organizations”, in line 11, the following words:- , pharmaceutical manufacturing companies, pharmacy benefit managers.

SECTION 19. Said section 5 of said chapter 12C, as so appearing, is hereby further amended by inserting after the word “providers”, in line 15, the following words:- , affected pharmaceutical manufacturing companies, affected pharmacy benefit managers.

SECTION 20. Section 7 of said chapter 12C, as so appearing, is hereby further amended by adding the following paragraph:-

Pharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner and distribution determined by the center, pay to the commonwealth an amount of the estimated expenses of the center attributable to the center’s activities under sections 10A or 10B. A pharmacy benefit manager that is a surcharge payor subject to the preceding paragraph and manages its own prescription drug benefits shall not be subject to additional assessment under this paragraph.

SECTION 21. Said chapter 12C is hereby further amended by inserting after section 10 the following 2 sections:-

Section 10A. (a) On or before March 1, 2022, and annually thereafter, the center shall prepare a list of not more than ten outpatient prescription drugs that the center determines account for a significant share of state health care spending, considering the net cost of such drugs in the immediately preceding calendar year. The list shall include outpatient prescription drugs from different therapeutic classes and no more than three generic outpatient prescription drugs. The center shall not list any outpatient prescription drug pursuant to this subsection unless the wholesale acquisition cost of the prescription drug, less all rebates paid to the commonwealth for such drug during the immediately preceding calendar year, increased by not less than 25 per cent during the immediately preceding calendar year.

(b) The pharmaceutical manufacturing company that manufacturers a prescription drug included on a list prepared by the center pursuant to subsection (a) shall provide to the center the following: (i) a written, narrative description, suitable for public release, of factors that caused the increase in the wholesale acquisition cost of the listed prescription drug; and (ii) aggregate, company-level research and development costs and such other capital expenditures that the center deems relevant for the most recent year for which final audited data is available.

(c) The quality and types of information and data that a pharmaceutical manufacturing company submits to the center pursuant to this section shall be consistent with the quality and types of information and data that the pharmaceutical manufacturing company includes in: (i) such pharmaceutical manufacturing company’s annual consolidated report on Securities and Exchange Commission Form 10-K or (ii) any other public disclosure.

(d) The center shall consult with pharmaceutical manufacturing companies to establish a single, standardized form for reporting information and data pursuant to this section. The form shall minimize the administrative burden and cost imposed on the center and pharmaceutical manufacturing companies.

(e) The center shall compile an annual report based on the information that the center receives pursuant to subsection (b). The center shall post such report and the information described in this subsection on the center's website on or before October 1 of each year.

(f) Except as otherwise provided in this section, information and data submitted to the center pursuant to this section or section 10B shall not be a public record and shall be exempt from disclosure pursuant to clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66. No such information and data shall be disclosed in a manner that may compromise the financial, competitive or proprietary nature of such information and data, or that would have enable a third party to identify an individual drug, therapeutic class of drugs or pharmaceutical manufacturing company the prices charged for any particular drug or therapeutic class of drugs, or the value of any rebate or discount provided for any particular drug or class of drugs.

Section 10B. The center shall promulgate the regulations necessary to ensure the uniform reporting of information from pharmacy benefit managers that enables the center to analyze: (i) trends in estimated aggregate drug rebates and other drug price reductions, if any, provided by a pharmacy benefit manager to a health carrier client or health plan sponsor or passed through from a pharmacy benefit manager to a health carrier client or health plan sponsor in connection with utilization of the drugs offered through the pharmacy benefit manager and a measure of lives covered by each health carrier client or health plan sponsor; (ii) pharmacy benefit manager practices with regard to drug rebates and other drug price reductions, if any, provided by a pharmacy benefit manager to a health carrier client or to the consumer or passed through from a pharmacy benefit manager to a health carrier client or to the consumer; and (iii) any other information deemed necessary by the center. The center shall require the submission of available data and other information from pharmacy benefit managers including, but not limited to: (i) the amount of all rebates that the pharmacy benefit manager received from all pharmaceutical manufacturing companies for all health carrier clients in the aggregate and for each health carrier client individually; (ii) the administrative fees that the pharmacy benefit manager received from all health carrier clients in the aggregate and for each health carrier client individually; (iii) the aggregate amount of all retained rebates that the pharmacy benefit manager received from all pharmaceutical manufacturing companies and did not pass through to the pharmacy benefit manager’s health carrier clients; (iv) the aggregate amount of rebates a pharmacy benefit manager: (A) retains based on its contractual arrangement with its client; and (B) passes through to its clients; and (v) the percentage of contracts that a pharmacy benefit manager holds where the pharmacy benefit manager: (A) retains all rebates; (B) passes all rebates through to the client; and (C) shares rebates with the client.

SECTION 22. Section 11 of said chapter 12C, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:-

The center shall ensure the timely reporting of information required pursuant to sections 8, 9, 10, 10A, and 10B.

SECTION 23. Section 12 of said chapter 12C, as so appearing, is hereby amended by striking out, in line 2, the words “9, and 10” and inserting in place thereof the following words:- 9, 10, 10A and 10B.

SECTION 24. Subsection (a) of section 16 of said chapter 12C, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- The center shall publish an annual report based on the information submitted pursuant to sections 8, 9, 10, 10A and 10B concerning health care provider, provider organization, pharmaceutical manufacturing company, pharmacy benefit manager and private and public health care payer costs and cost and price trends, pursuant to section 13 of chapter 6D relative to market impact reviews and pursuant to section 15 relative to quality data.

SECTION 25. Chapter 94C of the General Laws is hereby amended by inserting after section 21B the following sections:-

Section 21C. (a) For the purposes of this section, the following words shall have the following meanings unless the context clearly requires otherwise:

“Cost-sharing”, amounts owed by a consumer under the terms of the consumer’s health benefit plan as defined in section 1 of chapter 176O or as required by a pharmacy benefit manager as defined in section 1 of chapter 6D.

“Pharmacy retail price”, the amount an individual would pay for a prescription medication at a pharmacy if the individual purchased that prescription medication at that pharmacy without using a health benefit plan as defined in section 1 of chapter 176O or any other prescription medication benefit or discount.

(b) A pharmacy shall provide the consumer, at the point of sale, the current pharmacy retail price and the applicable cost-sharing amount for each prescription medication the consumer is purchasing; provided, however, that the lower cost prescription medication is clearly indicated. The consumer shall affirm by signature in writing that the pharmacy has provided this price information and an opportunity for counseling. The pharmacy shall charge the consumer the applicable cost-sharing amount or the current pharmacy retail price for that prescription medication, as directed by the consumer. A pharmacy shall post a notice informing consumers that a consumer may request, at the point of sale, the current pharmacy retail price for each prescription medication the consumer intends to purchase.

(c) A contract shall not: (i) prohibit a pharmacist from complying with this section; or (ii) impose a penalty on the pharmacist or pharmacy for complying with this section; provided, however, that a pharmacist shall submit a claim to the consumer’s health benefit plan or its pharmacy benefit manager if the pharmacist has knowledge that the prescription medication is covered under the consumer’s health benefit plan.

SECTION 26. Section 4N of said chapter 111 is hereby repealed.