Budget Amendment ID: FY2020-S3-39
OTH 39
Prescription Drug Cost Transparency
Messrs. Welch, Humason and O'Connor moved that the proposed new text be amended by inserting after section XX the following section:-
SECTION XX. Section 1 of chapter 6D of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting after the definition of Performance penalty the following 2 definitions:-
Pharmaceutical manufacturing company, an entity engaged in the production, preparation, propagation, conversion or processing of prescription drugs, 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 an 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 under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said chapter 112.
Pharmacy benefit manager, a person or entity that administers: (i) a prescription drug, prescription device or pharmacist services; or (ii) a prescription drug and device and pharmacist services portion of a health benefit plan on behalf of a plan sponsor including, but not limited to, self-insured employers, insurance companies and labor unions; provided, however, that Pharmacy benefit manager shall include a health benefit plan that does not contract with a pharmacy benefit manager and administers its own: (a) prescription drug, prescription device or pharmacist services; or (b) prescription drug and device and pharmacist services portion, unless specifically exempted by the center.
SECTION XX. 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 XX. Section 6 of said chapter 6D, as so appearing, is hereby amended by adding the following paragraph:-
If the analysis of spending trends with respect to the pharmaceutical or biopharmaceutical products increases the expenses of the commission, the estimated increases in the commission s expenses shall be assessed fully to pharmaceutical manufacturing companies and pharmacy benefit managers in the same manner as the assessment under section 68 of chapter 118E. A pharmacy benefit manager that is a surcharge payor subject to the preceding paragraph and administers its own prescription drug, prescription device or pharmacist services or prescription drug and device and pharmacist services portion shall not be subject to additional assessment under this paragraph.
SECTION XX. Section 8 of said chapter 6D, as so appearing, is hereby amended by striking out, in line 32, the words and (xi) and inserting in place thereof the following words:- (xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least 1 pharmacy benefit manager; and (xiii).
SECTION XX. 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 providers, provider organizations, insurers, pharmaceutical manufacturing companies and pharmacy benefit managers, registration data collected under section 11, data collected or analyzed by the center under sections 8, 9, 10 and 10A of chapter 12C and any other available information that the commission considers necessary to fulfill its duties under this section as defined in regulations promulgated by the commission.
SECTION XX. Said chapter 6D is hereby amended by inserting after section 15 the following 2 sections:-
Section 15A. (a) The commission may develop, implement and promote an evidence-based outreach and education program to support the therapeutic and cost-effective utilization of prescription drugs for physicians, podiatrists, pharmacists and other health care professionals authorized to prescribe and dispense prescription drugs. In developing the program, the commission shall consult with physicians, podiatrists, pharmacists, nurses, private insurers, hospitals, pharmacy benefit managers, the MassHealth drug utilization review board and the University of Massachusetts medical school.
(b) The program shall arrange for physicians, podiatrists, pharmacists and nurses to conduct face-to-face visits with prescribers, utilizing evidence-based materials and borrowing methods from behavioral science, educational theory and, where appropriate, pharmaceutical industry data and outreach techniques; provided, however, that, to the extent possible, the program shall inform prescribers about drug marketing that is intended to circumvent competition from generic or other therapeutically-equivalent pharmaceutical alternatives or other evidence-based treatment options.
The program shall be designed to provide outreach to: physicians, podiatrists and other health care practitioners who participate in MassHealth, the subsidized catastrophic prescription drug insurance program established in section 39 of chapter 19A, other publicly-funded, contracted or subsidized health care programs, academic medical centers and other prescribers.
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 including, but not limited to: (i) the Pennsylvania Pharmaceutical Assistance Contract for the Elderly Independent Drug Information Service affiliated with Harvard University; (ii) the Academic Detailing Program through the University of Vermont Larner College of Medicine s Office of Primary Care and Area Health Education Centers Program; (iii) the Drug Effectiveness Review Project coordinated by the Center for Evidence-based Policy at Oregon Health and Science University; and (iv) the North Carolina evidence-based peer-to-peer education program outreach program.
(c) The commission shall make an annual report, not later than April 1, on the operation of the program. The report shall be made publicly available on the commission s website and include information on the outreach and education components of the program, revenues, expenditures and balances and savings attributable to the program in health care programs funded by the commonwealth.
(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 15B. (a) The commission shall conduct an annual study of pharmaceutical manufacturing companies with pipeline drugs, generic drugs or biosimilar drug products that may have a significant impact on statewide health care expenditures; provided, however, that the commission may issue interim studies if it deems it necessary. The commission may contract with a third-party entity to implement this section.
(b) A pharmaceutical manufacturing company shall, provide early notice to the commission for: (i) a pipeline drug; (ii) an abbreviated new drug application for generic drugs, upon submission to the federal Food and Drug Administration; or (iii) a biosimilar biologics license application upon the receipt of an action date from the federal Food and Drug Administration. The commission shall make early notice information available to the office of Medicaid or another agency, as deemed appropriate.
Early notice shall be submitted to the commission not later than 60 days after receipt of the federal Food and Drug Administration action date or after the submission of an abbreviated new drug application to the federal Food and Drug Administration action.
For each prescription drug product, early notice shall include a brief description of the: (i) primary disease, health condition or therapeutic area being studied and the indication; (ii) route of administration being studied; (iii) clinical trial comparators; and (iv) estimated year of market entry. To the extent possible, information shall be collected using data fields consistent with those used by the federal National Institutes of Health for clinical trials.
For each pipeline drug, early notice shall include whether the drug has been designated by the federal Food and Drug Administration: (i) orphan drug; (ii) fast track; (iii) breakthrough therapy; (iv) for accelerated approval; or (v) priority review for a new molecular entity.
Notwithstanding the foregoing, submissions for drugs in development that receive such a designation by the federal Food and Drug Administration for new molecular entities shall be provided as soon as practical upon receipt of the relevant designation.
(c) The commission shall assess pharmaceutical manufacturing companies for the implementation of this section in a similar manner to the annual registration fees and other assessments related to the annual marketing disclosure reports required under section 2A of chapter 111N.
(d) Notwithstanding any general or special law to the contrary, information provided under this section shall be protected as confidential and shall not be a public record under clause Twenty-six of section 7 of chapter 4 or under chapter 66.
SECTION XX. Section 1 of chapter 12C of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting after the definition of Patient-centered medical home the following 2 definitions:
Pharmaceutical manufacturing company, an entity engaged in the production, preparation, propagation, conversion or processing of prescription drugs, 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 an 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 under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said chapter 112.
Pharmacy benefit manager, a person or entity that administers: (i) a prescription drug, prescription device or pharmacist services or (ii) a prescription drug and device and pharmacist services portion of a health benefit plan on behalf of a plan sponsor including, but not limited to, self-insured employers, insurance companies and labor unions; provided, however, that Pharmacy benefit manager shall include a health benefit plan that does not contract with a pharmacy benefit manager and administers its own: (a) prescription drug, prescription device or pharmacist services; or (b) prescription drug and device and pharmacist services portion, unless specifically exempted by the center.
SECTION XX. Section 5 of said chapter 12C, as so appearing, is hereby amended by inserting after the word payers, in line 11, the following words:- , pharmaceutical manufacturing companies, pharmacy benefit managers.
SECTION XX. Said section 5 of said chapter 12C, as so appearing, is hereby further amended by striking out, in line 15, the word and and inserting in place thereof the following words:- affected pharmaceutical manufacturing companies, affected pharmacy benefit managers and.
SECTION XX. Section 7 of said chapter 12C, as so appearing, is hereby amended by adding the following paragraph:-
To the extent that the analysis of pharmaceutical manufacturing companies and pharmacy benefit managers pursuant to section 10A increases the expenses of the center, the estimated increase in the center’s expenses shall be fully assessed to pharmaceutical manufacturing companies and pharmacy benefit managers in the same manner as the assessment under section 68 of chapter 118E. A pharmacy benefit manager that is a surcharge payor subject to the preceding paragraph and administers either its own (a) prescription drug, prescription device or pharmacist services or (b) prescription drug and device and pharmacist services portion shall not be subject to additional assessment under this paragraph.
SECTION XX. Said chapter 12C is hereby further amended by inserting after section 10 the following section:-
Section 10A. (a) The center shall promulgate regulations necessary to ensure the uniform analysis of information regarding pharmaceutical manufacturing companies and pharmacy benefit managers and that enable the center to analyze: (i) year-over-year wholesale acquisition cost changes; (ii) year-over-year trends in net expenditures; (iii) net expenditures on subsets of brand and generic pharmaceuticals identified by the center; (iv) information regarding trends of estimated aggregate drug rebates and other price reductions paid by a pharmaceutical manufacturing company in connection with utilization of all pharmaceutical drug products offered by the pharmaceutical manufacturing company; (v) information regarding trends of estimated aggregate drug rebates and other price reductions paid by a pharmacy benefit manager in connection with utilization of all drugs offered through the pharmacy benefit manager; (vi) information regarding pharmacy benefit manager practices in passing drug rebates or other price reductions received by the pharmacy benefit manager to a private or public health care payer or the consumer; (vii) information regarding discount or free product vouchers that a retail pharmacy provides to a consumer in connection with a pharmacy service, item or prescription transfer offer or to any discount, rebate, product voucher or other reduction in an individual's out-of-pocket expenses, including co-payments and deductibles under section 3 of chapter 175H; and (viii) any other information deemed necessary by the center.
(b) The center shall require the submission of available data and other information from pharmaceutical manufacturing companies and pharmacy benefit managers including, but not limited to: (i) changes in wholesale acquisition costs for prescription drug products, as identified by the center; (ii) aggregate, company-level research and development and other relevant capital expenditures for the most recent year for which final audited data are available for prescription drug products as identified by the center; (iii) a description, suitable for public release, of factors that contributed to reported changes in wholesale acquisition costs for prescription drug products identified by the center.
(c) Except as specifically provided otherwise by the center or under this chapter, data collected by the center pursuant to this section from pharmaceutical manufacturing companies and pharmacy benefit managers shall not be a public record under clause Twenty-sixth of section 7 of chapter 4 or under chapter 66
SECTION XX. Section 11 of said chapter 12C, as so appearing, is hereby amended by striking out, in line 2, the words and 10 and inserting in place thereof the following figures:- , 10 and 10A.
SECTION XX. Section 12 of said chapter 12C, as so appearing, is hereby amended by striking out, in line 2, the words and 10 and inserting in place thereof the following figures:- , 10 and 10A.
SECTION XX. Section 12 of chapter 12C of the General Laws, as so appearing, is hereby amended by striking out, in lines 11 and 12, the words the operation of the database or its functions and inserting in place thereof the following words:- control of the database.
SECTION XX. 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 under sections 8, 9, 10 and 10A concerning health care provider, provider organization, private and public health care payer, pharmaceutical manufacturing company and pharmacy benefit manager costs and cost trends, under section 13 of chapter 6D relative to market power reviews and under section 15 relative to quality data.
SECTION XX. Section 20 of said chapter 12C, as so appearing, is hereby amended by striking out, in lines 22 and 23, the words as determined by the center and inserting in place thereof the following words:- consistent with the recommendations of the taskforce pursuant to section 16AA of chapter 6A.