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General Assembly Raised Bill No. 5366
February Session, 2020
LCO No. 2027
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING TH E COST OF PRESCRIPTION DRUGS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective January 1, 2021) No insurer, health care 1
center, hospital service corporation, medical service corporation, 2
fraternal benefit society or other entity that delivers, issues for delivery, 3
renews, amends or continues an individual or group health insurance 4
policy in this state on or after January 1, 2021, that provides coverage of 5
the type specified in subdivisions (1), (2), (4), (11), (12) and (16) of section 6
38a-469 of the general statutes and includes coverage for prescription 7
drugs shall impose coinsurance, copayments, deductibles and out-of-8
pocket expenses for covered prescription drugs that, in the aggregate, 9
exceed two hundred fifty dollars per insured per month. 10
Sec. 2. (NEW) (Effective January 1, 2021) For each year beginning on or 11
after January 1, 2021, the wholesale cost of an outpatient prescription 12
drug sold in this state shall not exceed one hundred two per cent of the 13
consumer price index for all urban consumers as published by the 14
United States Department of Labor, Bureau of Labor Statistics, for the 15
preceding year. 16 Raised Bill No. 5366
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Sec. 3. (NEW) (Effective July 1, 2020) For the purposes of this section 17
and sections 4 to 8, inclusive, of this act unless the context otherwise 18
requires: 19
(1) "Drug" means an article that is (A) recognized in the official United 20
States Pharmacopoeia, official Homeopathic Pharmacopoeia of the 21
United States or official National Formulary, or any supplement thereto, 22
(B) intended for use in the diagnosis, cure, mitigation, treatment or 23
prevention of disease in humans, (C) not food and intended to affect the 24
structure or any function of the human body, and (D) not a device and 25
intended for use as a component of any other article specified in 26
subparagraphs (A) to (C), inclusive, of this subdivision; 27
(2) "Drug Quality and Security Act" means the federal Drug Quality 28
and Security Act, 21 USC 351, et seq., as amended from time to time; 29
(3) "Food, Drug and Cosmetic Act" means the Federal Food, Drug and 30
Cosmetic Act, 21 USC 301, et seq., as amended by the Drug Quality and 31
Security Act, as both may be amended from time to time; 32
(4) "Laboratory testing" means a quantitative and qualitative analysis 33
of a prescription drug consistent with the official United States 34
Pharmacopoeia; 35
(5) "Legend drug" means a drug that (A) any applicable federal or 36
state law requires to be (i) dispensed pursuant to a prescription, or (ii) 37
used by a prescribing practitioner, or (B) applicable federal law requires 38
to bear the following legend: "RX ONLY" IN ACCORDANCE WITH 39
GUIDELINES ESTABLISHED IN THE FEDERAL FOOD, DRUG AND 40
COSMETIC ACT; 41
(6) "Participating Canadian supplier" means a manufacturer or 42
wholesale drug distributor that is (A) licensed or permitted under 43
applicable Canadian law to manufacture or distribute prescription 44
drugs, (B) exporting legend drugs, in the manufacturer's original 45
container, to a participating wholesaler for distribution in this state 46
under the program, and (C) properly registered, if such Canadian 47 Raised Bill No. 5366
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supplier is required to be registered, with the United States Food and 48
Drug Administration, or any successor agency; 49
(7) "Participating wholesaler" means a wholesaler, as defined in 50
section 21a-70 of the general statutes, that (A) has received a certificate 51
of registration from the Commissioner of Consumer Protection 52
pursuant to said section, and (B) is designated by the commissioner to 53
participate in the program; 54
(8) "Prescription" means a lawful verbal, written or electronic order 55
by a prescribing practitioner for a drug for a specific patient; 56
(9) "Program" means the Canadian legend drug importation program 57
established by the Commissioner of Consumer Protection pursuant to 58
section 4 of this act; 59
(10) "Qualified laboratory" means a laboratory that is (A) adequately 60
equipped and staffed to properly perform laboratory testing on legend 61
drugs, and (B) accredited to International Organization for 62
Standardization (ISO) 17025; and 63
(11) "Track-and-trace" means the product tracing process for the 64
components of the pharmaceutical distribution supply chain, as 65
described in Title II of the Drug Quality and Security Act. 66
Sec. 4. (NEW) (Effective July 1, 2020) (a) The Commissioner of 67
Consumer Protection shall establish a program to be known as the 68
"Canadian legend drug importation program". Under such program, 69
the commissioner shall, notwithstanding any contrary provision of the 70
general statutes: 71
(1) Provide for the importation of safe and effective legend drugs 72
from Canada that have the highest potential for cost savings in this state; 73
and 74
(2) Designate one or more participating wholesalers to distribute 75
legend drugs in this state: 76 Raised Bill No. 5366
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(A) In the manufacturer's original container; 77
(B) From a participating Canadian supplier; and 78
(C) To a pharmacy or institutional pharmacy, as both terms are 79
defined in section 20-571 of the general statutes, or a qualified 80
laboratory. 81
(b) (1) Not later than July 1, 2021, the Commissioner of Consumer 82
Protection shall submit a request to the federal Secretary of Health and 83
Human Services seeking approval for the program under 21 USC 384, 84
as amended from time to time. Such request shall, at a minimum: 85
(A) Describe the commissioner's plans for operating the program; 86
(B) Demonstrate that the legend drugs that will be imported and 87
distributed in this state under the program shall: 88
(i) Meet all applicable federal and state standards for safety and 89
effectiveness; and 90
(ii) Comply with all federal tracing procedures; and 91
(C) Disclose the costs of implementing the program. 92
(2) (A) If the federal Secretary of Health and Human Services 93
approves the commissioner's request, the commissioner shall: 94
(i) Submit to the Commissioner of Public Health a notice disclosing 95
that the federal Secretary of Health and Human Services has approved 96
such request; 97
(ii) Submit to the joint standing committees of the General Assembly 98
having cognizance of matters relating to appropriations, general law, 99
human services and public health a notice disclosing that the federal 100
Secretary of Health and Human Services has approved such request; 101
and 102
(iii) Begin operating the program not later than one hundred eighty 103 Raised Bill No. 5366
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days after the date of such approval. 104
(B) Except as otherwise provided in this subsection, the 105
Commissioner of Consumer Protection shall not operate the program 106
unless the federal Secretary of Health and Human Services approves the 107
commissioner's request. 108
Sec. 5. (NEW) (Effective July 1, 2020) (a) Each participating wholesaler 109
may, subject to the provisions of this section and sections 4 and 7 of this 110
act, import into this state a legend drug from a participating Canadian 111
supplier, and distribute such legend drug to a pharmacy or institutional 112
pharmacy, as both terms are defined in section 20-571 of the general 113
statutes, or a qualified laboratory in this state, under the program if: 114
(1) Such participating wholesaler: 115
(A) Is registered with the federal Secretary of Health and Human 116
Services pursuant to Section 510(b) of the Food, Drug and Cosmetic Act, 117
21 USC 360(b), as amended from time to time; and 118
(B) Holds a valid labeler code that has been issued to such 119
participating wholesaler by the United States Food and Drug 120
Administration, or any successor agency; and 121
(2) Such legend drug: 122
(A) May be imported into this state in accordance with applicable 123
federal patent laws; 124
(B) Meets the United States Food and Drug Administration's, or any 125
successor agency's, standards concerning drug safety, effectiveness, 126
misbranding and adulteration; and 127
(C) Is not: 128
(i) A controlled substance, as defined in 21 USC 802, as amended from 129
time to time; 130
(ii) A biological product, as defined in 42 USC 262, as amended from 131 Raised Bill No. 5366
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time to time; 132
(iii) An infused drug; 133
(iv) An intravenously injected drug; 134
(v) A drug that is inhaled during surgery; or 135
(vi) A drug that is a parenteral drug, the importation of which is 136
determined by the federal Secretary of Health and Human Services to 137
pose a threat to the public health. 138
(b) Each participating wholesaler shall: 139
(1) Comply with all applicable track-and-trace requirements, and 140
make available to the Commissioner of Consumer Protection all track-141
and-trace records not later than forty-eight hours after the commissioner 142
requests such records; 143
(2) Not import, distribute, dispense or sell in this state any legend 144
drugs under the program except in accordance with the provisions of 145
this section and sections 4 and 7 of this act; 146
(3) Not distribute, dispense or sell outside of this state any legend 147
drugs that are imported into this state under the program; 148
(4) Ensure the safety and quality of the legend drugs that are 149
imported and distributed in this state under the program; 150
(5) For each initial shipment of a legend drug that is imported into 151
this state by such participating wholesaler, ensure that a qualified 152
laboratory engaged by such participating wholesaler tests a statistically 153
valid sample size for each batch of such legend drug in such shipment 154
for authenticity and degradation in a manner that is consistent with the 155
Food, Drug and Cosmetic Act; 156
(6) For each shipment of a legend drug that is imported into this state 157
by such participating wholesaler, and sampled and tested pursuant to 158
subdivision (5) of this subsection, ensure that a qualified laboratory 159 Raised Bill No. 5366
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engaged by such participating wholesaler tests a statistically valid 160
sample of such legend drug in such shipment for authenticity and 161
degradation in a manner that is consistent with the Food, Drug and 162
Cosmetic Act; 163
(7) Certify to the Commissioner of Consumer Protection that each 164
legend drug imported into this state under the program: 165
(A) Is approved for marketing in the United States and not 166
adulterated or misbranded; and 167
(B) Meets all labeling requirements under 21 USC 352, as amended 168
from time to time; 169
(8) Maintain laboratory records, including, but not limited to, 170
complete data derived from all tests necessary to ensure that each 171
legend drug imported into this state under the program satisfies the 172
requirements of subdivisions (5) and (6) of this subsection; 173
(9) Maintain documentation demonstrating that the testing required 174
by subdivisions (5) and (6) of this subsection was conducted at a 175
qualified laboratory in accordance with the Food, Drug and Cosmetic 176
Act and all other applicable federal and state laws and regulations 177
concerning laboratory qualifications; 178
(10) Maintain the following information for each legend drug that 179
such participating wholesaler imports and distributes in this state under 180
the program, and submit such information to the Commissioner of 181
Consumer Protection upon request by the commissioner: 182
(A) The name and quantity of the active ingredient of such legend 183
drug; 184
(B) A description of the dosage form of such legend drug; 185
(C) The date on which such participating wholesaler received such 186
legend drug; 187 Raised Bill No. 5366
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(D) The quantity of such legend drug that such participating 188
wholesaler received; 189
(E) The point of origin and destination of such legend drug; 190
(F) The price paid by such participating wholesaler for such legend 191
drug; 192
(G) A report for any legend drug that fails laboratory testing under 193
subdivision (5) or (6) of this subsection; and 194
(H) Such additional information and documentation that the 195
commissioner deems necessary to ensure the protection of the public 196
health; and 197
(11) Maintain all information and documentation that is submitted to 198
the Commissioner of Consumer Protection pursuant to this subsection 199
for a period of not less than three years. 200
Sec. 6. (NEW) (Effective July 1, 2020) Each participating Canadian 201
supplier shall: 202
(1) Comply with all applicable track-and-trace requirements; 203
(2) Not distribute, dispense or sell outside of this state any legend 204
drugs that are imported into this state under the program; and 205
(3) Maintain the following information and documentation and, 206
upon request by the Commissioner of Consumer Protection, submit 207
such information and documentation to the commissioner for each 208
legend drug that such participating Canadian supplier exports into this 209
state under the program: 210
(A) The original source of such legend drug, including, but not 211
limited to: 212
(i) The name of the manufacturer of such legend drug; 213
(ii) The date on which such legend drug was manufactured; and 214 Raised Bill No. 5366
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(iii) The location where such legend drug was manufactured; 215
(B) The date on which such legend drug was shi pped to a 216
participating wholesaler; 217
(C) The quantity of such legend drug that was shipped to a 218
participating wholesaler; 219
(D) The quantity of each lot of such legend drug that such 220
participating Canadian supplier originally received and the source of 221
such lot; 222
(E) The lot or control number and the batch number assigned to such 223
legend drug by the manufacturer; and 224
(F) Such additional information and documentation that the 225
commissioner deems necessary to ensure the protection of the public 226
health. 227
Sec. 7. (NEW) (Effective July 1, 2020) (a) The Commissioner of 228
Consumer Protection shall issue a written order: 229
(1) Suspending importation and distribution of a legend drug under 230
the program if the commissioner discovers that such distribution or 231
importation violates any provision of sections 4 to 6, inclusive, of this 232
act or any other applicable state or federal law or regulation; 233
(2) Suspending all importation and distribution of legend drugs by a 234
participating wholesaler under the program if the commissioner 235
discovers that the participating wholesaler has violated any provision 236
of section 4 or 5 of this act or any other applicable state or federal law or 237
regulation; 238
(3) Suspending all importation and distribution of legend drugs by a 239
participating Canadian supplier under the program if the commissioner 240
discovers that the participating Canadian supplier has violated any 241
provision of section 4 or 6 of this act or any other applicable state or 242
federal law or regulation; or 243 Raised Bill No. 5366
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(4) Requiring the recall or seizure of any legend drug that was 244
imported and distributed under the program and has been identified as 245
adulterated, within the meaning of section 21a-105 of the general 246
statutes, or misbranded. 247
(b) The Commissioner of Consumer Protection shall send a notice to 248
each participating Canadian supplier and participating wholesaler 249
affected by an order issued pursuant to subsection (a) of this section 250
notifying such participating Canadian supplier or participating 251
wholesaler that: 252
(1) The commissioner has issued such order, and providing the legal 253
and factual basis for such order; and 254
(2) Such participating Canadian supplier or participating wholesaler 255
may request, in writing, a hearing before the commissioner, provided 256
such request is received by the commissioner not later than thirty days 257
after the date of such notice. 258
(c) If a participating Canadian supplier or participating wholesaler 259
timely requests a hearing pursuant to subsection (b) of this section, the 260
Commissioner of Consumer Protection shall, not later than thirty days 261
after the receipt of the request, convene the hearing as a contested case 262
in accordance with the provisions of chapter 54 of the general statutes. 263
Not later than sixty days after the receipt of such request, the 264
commissioner shall issue a final decision vacating, modifying or 265
affirming the commissioner's order. A participating Canadian supplier 266
or participating wholesaler aggrieved by a final decision may appeal 267
such decision in accordance with the provisions of section 4-183 of the 268
general statutes. 269
Sec. 8. (NEW) (Effective July 1, 2020) The Commissioner of Consumer 270
Protection may, in consultation with the Commissioner of Public 271
Health, adopt regulations in accordance with the provisions of chapter 272
54 of the general statutes to implement the provisions of sections 3 to 7, 273
inclusive, of this act. 274 Raised Bill No. 5366
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Sec. 9. (NEW) (Effective October 1, 2020) (a) Each pharmaceutical 275
manufacturer doing business in this state that manufactures a brand 276
name prescription drug and enters into an agreement with another 277
pharmaceutical manufacturer for the purpose of delaying or preventing 278
such other manufacturer from introducing a generic substitute for such 279
drug into the marketplace shall, not later than thirty days after entering 280
into such agreement, send notice to the Insurance Commissioner, in a 281
form and manner prescribed by the commissioner, disclosing the name 282
of such drug. 283
(b) (1) The commissioner shall, not later than thirty days after 284
receiving a notice pursuant to subsection (a) of this section, send notice 285
to each health carrier, as defined in section 38a-1080 of the general 286
statutes, and pharmacy benefits manager, as defined in section 38a-287
479aaa of the general statutes, doing business in this state. Such notice 288
shall, at a minimum: 289
(A) Disclose the name of the brand name prescription drug that is the 290
subject of the notice the commissioner received pursuant to subsection 291
(a) of this section; and 292
(B) Instruct such health carrier, if such health carrier includes such 293
drug on such health carrier's drug formulary or list of covered drugs, or 294
pharmacy benefits manager, if such pharmacy benefits manager 295
administers a prescription drug benefit that includes such drug, to 296
immediately reduce the cost of such drug to covered individuals by an 297
amount that is equal to fifty per cent of the manufacturer's wholesale list 298
price for such drug. 299
(2) For the purposes of this subsection, "manufacturer's wholesale list 300
price" has the same meaning as provided in section 21a-126 of the 301
general statutes. 302
(c) The provisions of this section shall apply to the maximum extent 303
permitted by applicable law. 304
(d) The commissioner may adopt regulations, in accordance with 305 Raised Bill No. 5366
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chapter 54 of the general statutes, to implement the provisions of this 306
section. 307
Sec. 10. (NEW) (Effective October 1, 2020) (a) There is established a 308
Critical Drug Shortage Review Board, which shall be part of the 309
Executive Department. 310
(b) The board shall consist of the following members: 311
(1) The Commissioner of Correction; 312
(2) The Commissioner of Mental Health and Addiction Services; 313
(3) The Commissioner of Social Services; and 314
(4) The executive director of the Office of Health Strategy, established 315
under section 19a-754a of the general statutes. 316
(b) A majority of the board shall constitute a quorum for the 317
transaction of any business. 318
(c) The members of the board shall serve without compensation, but 319
shall, within the limits of available funds, be reimbursed for expenses 320
necessarily incurred in the performance of their duties. 321
(d) The board shall have the following powers and duties: (1) To 322
evaluate the cost of prescription drugs in this state; (2) to declare a 323
prescription drug pricing emergency and recommend that the 324
Commissioner of Public Health request that the federal government 325
exercise its powers under 28 USC 1498; (3) obtain from any executive 326
department, board, commission or other agency of the state such 327
assistance and data as necessary and available to carry out the purposes 328
of this section; (4) accept any gift, donation or bequest for the purpose 329
of performing the duties described in this section; and (5) perform such 330
other acts as may be necessary and appropriate to carry out the duties 331
described in this section. 332
(e) The board shall meet as often as deemed necessary by a majority 333 Raised Bill No. 5366
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of the board. 334
(f) The board may enter into such contractual agreements as may be 335
necessary for the discharge of its duties, within the limits of its 336
appropriated funds and in accordance with established procedures. 337
Sec. 11. (NEW) (Effective January 1, 2021) (a) For the purposes of this 338
section: 339
(1) "Affordable Care Act" has the same meaning as provided in 340
section 38a-1080 of the general statutes; 341
(2) "Health benefit plan" has the same meaning as provided in section 342
38a-1080 of the general statutes, except that such term shall not include 343
a grandfathered health plan as such term is used in the Affordable Care 344
Act; and 345
(3) "Health carrier" has the same meaning as provided in section 38a-346
1080 of the general statutes. 347
(b) Notwithstanding any provision of the general statutes and except 348
as provided in subsection (c) of this section, no health carrier offering a 349
health benefit plan in this state on or after January 1, 2021, that includes 350
a pharmacy benefit and uses a drug formulary or list of covered drugs 351
may: 352
(1) Remove a prescription drug from the drug formulary or list of 353
covered drugs during a plan year; or 354
(2) Move a prescription drug from a cost-sharing tier that imposes a 355
lesser coinsurance, copayment or deductible for the prescription drug to 356
a cost-sharing tier that imposes a greater coinsurance, copayment or 357
deductible for the prescription drug during a plan year, unless the 358
prescription drug is subject to an in-network coinsurance, copayment or 359
deductible that is not greater than forty dollars per prescription per 360
month in any tier. 361
(c) A health carrier offering a health benefit plan in this state on or 362 Raised Bill No. 5366
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after January 1, 2021, that includes a pharmacy benefit and uses a drug 363
formulary or list of covered drugs may: 364
(1) Remove a prescription drug from the drug formulary or list of 365
covered drugs, upon at least ninety days' advance notice to a covered 366
person and the covered person's treating physician, if: 367
(A) The federal Food and Drug Administration issues an 368
announcement, guidance, notice, warning or statement concerning the 369
prescription drug that calls into question the clinical safety of the 370
prescription drug, unless the covered person's treating physician states, 371
in writing, that the prescription drug remains medically necessary 372
despite such announcement, guidance, notice, warning or statement; or 373
(B) The prescription drug is approved by the federal Food and Drug 374
Administration for use without a prescription; and 375
(2) Move a brand name prescription drug from a cost-sharing tier that 376
imposes a lesser coinsurance, copayment or deductible for the brand 377
name prescription drug to a cost-sharing tier that imposes a greater 378
coinsurance, copayment or deductible for the brand name prescription 379
drug if the health carrier adds to the drug formulary or list of covered 380
drugs a generic prescription drug that is: 381
(A) Approved by the federal Food and Drug Administration for use 382
as an alternative to such brand name prescription drug; and 383
(B) In a cost-sharing tier that imposes a coinsurance, copayment or 384
deductible for the generic prescription drug that is lesser than the 385
coinsurance, copayment or deductible that is imposed for such brand 386
name prescription drug. 387
(d) Nothing in this section shall prevent or prohibit a health carrier 388
from adding a prescription drug to a formulary or list of covered drugs 389
at any time. 390 Raised Bill No. 5366
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This act shall take effect as follows and shall amend the following
sections:
Section 1 January 1, 2021 New section
Sec. 2 January 1, 2021 New section
Sec. 3 July 1, 2020 New section
Sec. 4 July 1, 2020 New section
Sec. 5 July 1, 2020 New section
Sec. 6 July 1, 2020 New section
Sec. 7 July 1, 2020 New section
Sec. 8 July 1, 2020 New section
Sec. 9 October 1, 2020 New section
Sec. 10 October 1, 2020 New section
Sec. 11 January 1, 2021 New section
Statement of Purpose:
To: (1) Cap aggregate monthly cost-sharing for prescription drugs
covered under certain individual and group health insurance policies;
(2) cap the cost of generic drugs in this state; (3) require the
Commissioner of Consumer Protection to submit a request to the federal
Secretary of Health and Human Services to implement a Canadian
prescription drug reimportation program in this state and, if the
secretary approves such request, implement such program in this state;
(4) require pharmaceutical manufacturers to send notice to the
Insurance Commissioner regarding "pay-for-delay" agreements, and
require health carriers and pharmacy benefits managers to reduce the
cost of brand name prescription drugs that are the subject of such
agreements; (5) establish a Critical Drug Shortage Review Board; and (6)
limit the circumstances in which a health carrier may remove a
prescription drug from a drug formulary or list of covered drugs, or
move a prescription drug to a different cost-sharing tier, during a plan
year.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]