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The 192nd General Court of the Commonwealth of Massachusetts

Section 8A: Pharmaceutical drug pricing; manufacturer disclosure of pricing information; determination of supplemental rebate, proposed value or reasonableness of pricing of a drug

[ Text of section added by 2019, 41, Sec. 6 effective July 1, 2019. See 2019, 41, Sec. 111.]

  Section 8A. (a) As used in this section, the following word shall, unless the context clearly requires otherwise, have the following meaning:

  "Manufacturer'', an entity that manufactures a pharmaceutical drug covered by MassHealth.

  (b) The commission may require a manufacturer specified in subsection (c) 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 the 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 previous 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, in consultation with the executive office, for a prescribed drug specified in subsection (c); provided that the proposed supplemental rebate may be based on a proposed value of the drug; and provided further, that the commission shall consider any proposed supplemental rebate framework or other information provided to the commission under subsection (g) of section 12A of chapter 118E. The commission may request additional relevant information that it deems necessary to identify a proposed supplemental rebate or proposed value of the drug.

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

  (d) Records disclosed by a manufacturer under this section shall: (i) be accompanied by an attestation that all information provided is true and correct; (ii) not be public records under section 7 of chapter 4 or chapter 66; and (iii) 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.

  (e) If, after review of any records furnished to the commission under subsection (b), the commission determines that the manufacturer's pricing of the drug is potentially unreasonable or excessive in relation to the commission's proposed value under subsection (b), the commission shall, with 30 days' advance notice to the 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 manufacturer, the commission may identify other relevant parties including but not limited to patients, providers, provider organizations and payers who may provide information to the commission.

  (f) Any information, analyses or reports regarding a particular drug reviewed or used in identifying the supplemental rebate or assessing the proposed value of the drug shall be provided to the manufacturer 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 its determination on the supplemental rebate, the proposed value or the reasonableness of the drug pricing, solely on the analysis or research of an outside third party.

  (g) If the commission relies upon a third party to provide cost-effectiveness analysis or research related to the proposed value, such analysis or research shall also provide, but not be limited in scope to, (i) a description of the methodologies and models used in its analysis; (ii) any assumptions and potential limitations of research findings in the context of the results; and (iii) outcomes for affected subpopulations that utilize the drug.

  (h) Not later than 60 days after receiving information from the manufacturer, as required under subsection (b) or (e), the commission shall issue a determination on whether the manufacturer's pricing of a drug subject to the supplemental rebate negotiation that resulted in the provision of notice under section 12A of chapter 118E is unreasonable or excessive in relation to the commission's proposed value of the drug.

  (i) If the manufacturer fails to timely comply with the commission's request for records under subsections (b) or (e), or otherwise knowingly obstructs the commission's ability to issue its determination under subsection (h), including, but not limited to, providing incomplete, false or misleading information, the commission may impose appropriate sanctions against the manufacturer, including reasonable monetary penalties not to exceed $500,000, in each instance. The commission shall seek to promote compliance with this section and shall only impose a civil penalty on the manufacturer as a last resort.

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