Budget Amendment ID: FY2020-S3-4

OTH 4

Promoting transparency and preventing price gouging of pharmaceutical drug prices

Messrs. Montigny, Timilty, O'Connor, Eldridge and Moore moved that the proposed new text be amended by inserting after section __ the following 3 sections:-

SECTION __. 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 __. 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 pharmaceutical manufacturing companies; (xii) at least 1 pharmacy benefit manager; and (xiii)”.

SECTION __.  Said section 8 of said chapter 6D of the General Laws, as so appearing, is hereby 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 concerning factors underlying prescription drug costs and price increases, the impact of manufacturer rebates, discounts and other price concessions on net pricing, the availability of alternative drugs or treatments and any other matters as determined by the commission”.

; and, in section 4, by inserting after the word “drug”, in line 8, the following:-

“, which at a minimum shall include but not be limited to the following: (i) year-over-year wholesale acquisition cost changes over the previous five year period; (ii) aggregate, company-level and product-specific research and development costs, identifying costs paid by the manufacturer and costs paid with public or third party funds; (iii) the price paid by the manufacturer to acquire the prescription drug product if not developed by the manufacturer; (iv) annual marketing and advertising costs for the prescribed drug, apportioned by costs for direct-to-consumer advertising and costs directed toward prescribers; (v) average annual rebates or price concessions offered by the manufacturer for the prescribed drug; (vi) average prices charged for the drug to purchasers in the commonwealth; (vii) average prices charged for the drug to purchasers outside the United States, by country; and (viii) average prices charged for the drug to the United States Department of Veterans Affairs, if such drug is purchased by said agency".

; and, in said section 4, by inserting after the word “resort”, in line 52, the following:-

“. Any drug manufacturer that fails to comply with this section following the imposition of a civil monetary penalty shall not be eligible for grants, subsidies or tax credits, breaks or exemptions pursuant to chapters 23I, 62, 63, 64H, and 64I of the General Laws”.