Connecticut 2022 Regular Session

Connecticut Senate Bill SB00260 Compare Versions

Only one version of the bill is available at this time.

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5	5	LCO No. 2224 1 of 13
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7	7	General Assembly Raised Bill No. 260
8	8	February Session, 2022
9	9	LCO No. 2224
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11	11
12	12	Referred to Committee on AGING
13	13
14	14
15	15	Introduced by:
16	16	(AGE)
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21	21	AN ACT CONCERNING A PRESCRIPTION DRUG COST CONTROL
22	22	BOARD.
23	23	Be it enacted by the Senate and House of Representatives in General
24	24	Assembly convened:
25	25	Section 1. (NEW) (Effective October 1, 2022) (a) There is hereby 1
26	26	established the Prescription Drug Cost Control Board, a body politic and 2
27	27	corporate, constituting a public instrumentality and political 3
28	28	subdivision of the state established and created for the performance of 4
29	29	an essential public and governmental function. The board shall not be 5
30	30	construed to be a department, institution or agency of the state. 6
31	31	(b) The purposes of the Prescription Drug Cost Control Board shall 7
32	32	be to monitor prescription drug prices in the state and recommend 8
33	33	upper price limits on prescription drugs to the Insurance Commissioner. 9
34	34	(c) The powers of the board shall be vested in and exercised by a 10
35	35	board of directors, which shall consist of five voting members and three 11
36	36	voting alternate members, with expertise in health care, economics and 12
37	37	clinical medicine, appointed by the Governor and confirmed by the 13
38	38	Senate to serve for five-year terms. The chairperson of the board shall 14 Raised Bill No. 260
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42	42	LCO No. 2224 2 of 13
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44	44	be appointed by the Governor, with the advice and consent of both 15
45	45	houses of the General Assembly, and shall serve at the pleasure of the 16
46	46	Governor. Alternate members shall, when seated as provided in this 17
47	47	section, have all powers and duties of a member of the board. If a regular 18
48	48	member of the board is absent or has a conflict of interest, the 19
49	49	chairperson of the board shall designate an alternate to so act, choosing 20
50	50	alternates in rotation so that they shall act as nearly equal a number of 21
51	51	times as possible. If any alternate is not available in accordance with 22
52	52	such rotation, such fact shall be recorded in the minutes of the meeting. 23
53	53	A member or alternate member shall serve until a successor is 24
54	54	appointed. 25
55	55	(d) Any vacancy occurring other than by expiration of term shall be 26
56	56	filled in the same manner as the original appointment for the balance of 27
57	57	the unexpired term. The Governor may remove a member for any one 28
58	58	or more of the following: Wilful neglect of duty, misfeasance or 29
59	59	malfeasance. 30
60	60	(e) Each member of the board shall be entitled to reimbursement for 31
61	61	such member's actual and necessary expenses incurred during the 32
62	62	performance of such member's official duties. 33
63	63	(f) Members of the board may engage in private employment, or in a 34
64	64	profession or business, subject to any applicable laws, rules and 35
65	65	regulations of the state regarding official ethics or conflict of interest. It 36
66	66	shall not constitute a conflict of interest for a trustee, director, partner or 37
67	67	officer of any person, firm or corporation, or any individual having a 38
68	68	financial interest in a person, firm or corporation, to serve as a board 39
69	69	member of the board, provided such trustee, director, partner, officer or 40
70	70	individual shall abstain from deliberation, action or vote by the board 41
71	71	in specific request to such person, firm or corporation. 42
72	72	(g) The board shall meet not less than four times annually to review 43
73	73	prescription drug product information. A majority of the members of 44
74	74	the board shall constitute a quorum for the transaction of any business 45
75	75	or the exercise of any power of the board. 46 Raised Bill No. 260
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81	81	(h) In carrying out its purposes, the board may: 47
82	82	(1) Assess and collect fees from prescription drug manufacturers 48
83	83	doing business in the state to be used exclusively to finance the work of 49
84	84	the board, provided the board shall account for and audit funds of the 50
85	85	board; 51
86	86	(2) Maintain an office at such place or places as it may designate and 52
87	87	an Internet web site; 53
88	88	(3) (A) Employ such assistants, agents and other employees as may 54
89	89	be necessary or desirable who shall not be employees, as defined in 55
90	90	subsection (b) of section 5-270 of the general statutes; (B) establish all 56
91	91	necessary or appropriate personnel practices and policies, including 57
92	92	those relating to hiring, promotion, compensation, retirement and 58
93	93	collective bargaining, which need not be in accordance with chapter 68 59
94	94	of the general statutes, and the board shall not be an employer as 60
95	95	defined in subsection (a) of section 5-270 of the general statutes; and (C) 61
96	96	engage consultants, attorneys and appraisers as may be necessary or 62
97	97	desirable to carry out its purposes in accordance with this section and 63
98	98	section 3 of this act; 64
99	99	(4) Receive and accept aid or contributions from any source of money, 65
100	100	property, labor or other things of value, to be held, used and applied to 66
101	101	carry out the purposes of the board, provided acceptance of such aid or 67
102	102	contributions does not present a conflict of interest for any board 68
103	103	member or staff hired pursuant to subdivision (3) of this subsection; and 69
104	104	(5) Make and enter into all contracts and agreements necessary or 70
105	105	incidental to the performance of its duties and the execution of its 71
106	106	powers, including contracts and agreements for such professional 72
107	107	services as the board deems necessary, including, but not limited to, 73
108	108	financial consultants, counsel, underwriters and technical specialists. 74
109	109	(i) (1) The chairperson of the board shall provide to the Insurance 75
110	110	Commissioner the name of any prescription drug manufacturer that 76
111	111	fails to pay any assessment or fee under subdivision (1) of subsection (h) 77 Raised Bill No. 260
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117	117	of this section to the board. The Insurance Commissioner shall see that 78
118	118	all laws respecting the board's authority pursuant to said subdivision 79
119	119	are faithfully executed. The commissioner has all the powers that are 80
120	120	reasonable and necessary to enforce the provisions of said subdivision. 81
121	121	(2) Any prescription drug manufacturer aggrieved by an 82
122	122	administrative action taken by the commissioner under subdivision (1) 83
123	123	of this subsection may appeal therefrom in accordance with the 84
124	124	provisions of section 4-183, except venue for such appeal shall be in the 85
125	125	judicial district of New Britain. 86
126	126	(j) The members of the Prescription Drug Cost Control Board shall 87
127	127	adopt written procedures, in accordance with the provisions of section 88
128	128	1-121 of the general statutes, for: (1) Adopting an annual budget and 89
129	129	plan of operations, including a requirement of board approval before 90
130	130	the budget or plan may take effect; (2) hiring, dismissing, promoting and 91
131	131	compensating employees of the board, including an affirmative action 92
132	132	policy and a requirement of board approval before a position may be 93
133	133	created or a vacancy filled; (3) acquiring personal property and personal 94
134	134	services, including a requirement of board approval for any 95
135	135	nonbudgeted expenditure in excess of an amount to be determined by 96
136	136	the board; (4) contracting for financial, legal and other professional 97
137	137	services, including a requirement that the board solicit proposals at least 98
138	138	once every three years for each such service which it uses; and (5) the 99
139	139	use of surplus funds. 100
140	140	Sec. 2. (NEW) (Effective October 1, 2022) As used in this section and 101
141	141	sections 3 and 4 of this act: 102
142	142	(1) "Biologic" means a drug licensed under 42 USC 262; 103
143	143	(2) "Biosimilar" means a drug that is highly similar to a biologic and 104
144	144	is produced or distributed in accordance with a biologics license 105
145	145	application approved under 42 USC 262, as amended from time to time; 106
146	146	(3) "Board" means the Prescription Drug Cost Control Board 107
147	147	established pursuant to section 1 of this act; 108 Raised Bill No. 260
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153	153	(4) "Brand name drug" means a drug that is produced or distributed 109
154	154	in accordance with an original new drug application approved under 21 110
155	155	USC 355, as amended from time to time, but does not include a generic 111
156	156	drug as defined in 42 CFR 447.502, as amended from time to time; 112
157	157	(5) "Generic drug" means (A) a prescription drug product that is 113
158	158	marketed or distributed in accordance with an abbreviated new drug 114
159	159	application approved under 21 USC 355, as amended from time to time, 115
160	160	(B) a generic drug as defined in 42 CFR 447.502, as amended from time 116
161	161	to time, or (C) a drug that entered the market before calendar year 1962 117
162	162	that was not originally marketed under a new prescription drug product 118
163	163	application; 119
164	164	(6) "Manufacturer" means an entity that (A) engages in the 120
165	165	manufacture of a drug product, or (B) enters into a lease with another 121
166	166	manufacturer to market and distribute a prescription drug product 122
167	167	under the entity's own name and sets or changes the wholesale 123
168	168	acquisition cost of the prescription drug product it manufactures or 124
169	169	markets; 125
170	170	(7) "Prescription drug product" means a brand name drug, a generic 126
171	171	drug, a biologic or biosimilar; and 127
172	172	(8) "Stakeholder council" means the Prescription Drug Affordability 128
173	173	Stakeholder Council established pursuant to section 4 of this act. 129
174	174	Sec. 3. (NEW) (Effective October 1, 2022) (a) To the extent practicable, 130
175	175	the Prescription Drug Cost Control Board shall access pricing 131
176	176	information for prescription drug products by: (1) Entering into a 132
177	177	memorandum of understanding with another state to which a 133
178	178	manufacturer already reports pricing information, (2) assessing 134
179	179	spending for the drug in the state, and (3) accessing other available 135
180	180	pricing information. 136
181	181	(b) The board shall identify prescription drug products that, as 137
182	182	adjusted annually for inflation in accordance with the consumer price 138
183	183	index for all urban consumers, as published by the United States 139 Raised Bill No. 260
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189	189	Department of Labor, Bureau of Labor Statistics, are: 140
190	190	(1) Brand name drugs that have a launch wholesale acquisition cost 141
191	191	of thirty thousand dollars or more per year or course of treatment; 142
192	192	(2) Brand name drugs that have a wholesale acquisition cost increase 143
193	193	of three thousand dollars or more in any twelve–month period; 144
194	194	(3) Biosimilars that have a launch wholesale acquisition cost that is 145
195	195	not at least fifteen per cent lower than the referenced brand biologic at 146
196	196	the time the biosimilars are launched; and 147
197	197	(4) Generic drugs that have: 148
198	198	(A) A wholesale acquisition cost of one hundred dollars or more for 149
199	199	(i) a thirty-day supply lasting a patient for a period of thirty consecutive 150
200	200	days based on the recommended dosage approved for labeling by the 151
201	201	United States Food and Drug Administration, (ii) a supply lasting a 152
202	202	patient for fewer than thirty days based on the recommended dosage 153
203	203	approved for labeling by the United States Food and Drug 154
204	204	Administration, or (iii) one unit of the drug if the labeling approved by 155
205	205	the United States Food and Drug Administration does not recommend 156
206	206	a finite dosage; and 157
207	207	(B) A wholesale acquisition cost that increased by two hundred per 158
208	208	cent or more during the immediately preceding twelve-month period, 159
209	209	as determined by the difference between the resulting wholesale 160
210	210	acquisition cost and the average of the wholesale acquisition cost 161
211	211	reported over the immediately preceding twelve months. 162
212	212	(c) The board shall identify other prescription drug products that 163
213	213	may create affordability challenges for the health care system in the state 164
214	214	or patients, including, but not limited to, drugs needed to address public 165
215	215	health emergencies. 166
216	216	(d) After identifying prescription drug products as required by 167
217	217	subsections (b) and (c) of this section, the board shall determine whether 168
218	218	to conduct an affordability review for each identified prescription drug 169 Raised Bill No. 260
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224	224	product by seeking (1) input from the stakeholder council, and (2) 170
225	225	considering the average patient cost share of the prescription drug 171
226	226	product. 172
227	227	(e) In conducting an affordability review of prescription drugs, the 173
228	228	board may examine any document and research relate d to the 174
229	229	manufacturer's selection of the introductory price or price increase of 175
230	230	the prescription drug product, including, but not limited to, (1) net 176
231	231	average price in the state, (2) market competition and context, (3) 177
232	232	projected revenue to the manufacturer, and (4) the estimated value or 178
233	233	cost effectiveness of the prescription drug product. 179
234	234	(f) The board shall determine whether use of the prescription drug 180
235	235	product, consistent with the labeling approved by the United States 181
236	236	Food and Drug Administration or standard medical practice, has led or 182
237	237	will lead to affordability challenges for the health care system in the 183
238	238	state or high out–of–pocket costs for patients. In determining whether a 184
239	239	prescription drug product has led or will lead to an affordability 185
240	240	challenge, the board shall consider the following factors: 186
241	241	(1) The wholesale acquisition cost for the prescription drug product 187
242	242	sold in the state; 188
243	243	(2) The average monetary price concession, discount or rebate the 189
244	244	manufacturer provides to health plans in the state or is expected to 190
245	245	provide to health plans in the state as reported by manufacturers and 191
246	246	health plans, expressed as a per cent of the wholesale acquisition cost 192
247	247	for the prescription drug product under review; 193
248	248	(3) The total amount of the price concession, discount or rebate the 194
249	249	manufacturer provides to each pharmacy benefits manager operating in 195
250	250	the state for the prescription drug product under review, as reported by 196
251	251	manufacturers and pharmacy benefits managers, expressed as a per cent 197
252	252	of the wholesale acquisition costs; 198
253	253	(4) The price at which therapeutic alternatives have been sold in the 199
254	254	state; 200 Raised Bill No. 260
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260	260	(5) The average monetary concession, discount or rebate the 201
261	261	manufacturer provides or is expected to provide to health plan payors 202
262	262	and pharmacy benefits managers in the state for therapeutic 203
263	263	alternatives; 204
264	264	(6) The costs to health plans based on patient access consistent with 205
265	265	United States Food and Drug Administration labeled indications and 206
266	266	recognized standard medical practice; 207
267	267	(7) The impact on patient access resulting from the cost of the 208
268	268	prescription drug product relative to health plan benefit design; 209
269	269	(8) The current or expected dollar value of drug–specific patient 210
270	270	access programs that are supported by the manufacturer; 211
271	271	(9) The relative financial impacts to health, medical or social services 212
272	272	costs as can be quantified and compared to baseline effects of existing 213
273	273	therapeutic alternatives; 214
274	274	(10) The average patient copayment or other cost sharing for the 215
275	275	prescription drug product in the state; 216
276	276	(11) Any information a manufacturer chooses to provide; and 217
277	277	(12) Any other factors as determined by the board. 218
278	278	(g) If the board finds that the spending on a prescription drug 219
279	279	product reviewed under this section has led or will lead to an 220
280	280	affordability challenge, the board shall recommend an upper payment 221
281	281	limit to the Insurance Commissioner after considering: (1) The cost of 222
282	282	administering the drug, (2) the cost of delivering the drug to patients, 223
283	283	and (3) other relevant administrative costs related to the drug. 224
284	284	(h) Any conflict of interest involving a member of the board shall be 225
285	285	disclosed at the next board meeting after the conflict is identified and on 226
286	286	the board's Internet web site. 227
287	287	(i) The board's recommendations shall not apply to Medicare Part D 228 Raised Bill No. 260
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293	293	prescription drug plans. 229
294	294	(j) On or before December 31, 2023, and annually thereafter, the board 230
295	295	shall submit a report, in accordance with the provisions of section 11-4a 231
296	296	of the general statutes, to the joint standing committees of the General 232
297	297	Assembly having cognizance of matters relating to aging, human 233
298	298	services, insurance and public health. The report shall include, but not 234
299	299	be limited to: (1) Price trends for prescription drug products, (2) the 235
300	300	number of such products subject to board review, (3) the results of the 236
301	301	reviews, and (4) any recommendations the board may have on further 237
302	302	legislation needed to make prescription drug products more affordable 238
303	303	in the state. 239
304	304	Sec. 4. (NEW) (Effective October 1, 2022) (a) There is established a 240
305	305	Prescription Drug Affordability Stakeholder Council to advise the board 241
306	306	on decisions regarding the affordability of prescription drugs. 242
307	307	(b) Members of the council shall serve for three years and shall consist 243
308	308	of: 244
309	309	(1) Three appointed by the speaker of the House of Representatives, 245
310	310	who shall be (A) a representative of a state-wide health care advocacy 246
311	311	coalition, (B) a representative of a state-wide advocacy organization for 247
312	312	elderly persons, and (C) a representative of a state-wide organization 248
313	313	for diverse communities; 249
314	314	(2) Three appointed by the president pro tempore of the Senate, who 250
315	315	shall be (A) a representative of a labor union, (B) a health services 251
316	316	researcher, and (C) a consumer who has experienced barriers to 252
317	317	obtaining prescription drugs due to the cost of such drugs; 253
318	318	(3) Two appointed by the majority leader of the House of 254
319	319	Representatives, who shall be (A) a representative of doctors, and (B) a 255
320	320	representative of nurses; 256
321	321	(4) Two appointed by the minority leader of the House of 257
322	322	Representatives, who shall be (A) a representative of private insurers, 258 Raised Bill No. 260
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328	328	and (B) a representative of brand name drug corporations; 259
329	329	(5) Two appointed by the minority leader of the Senate, who shall be 260
330	330	(A) a representative of generic drug corporations, and (B) a 261
331	331	representative of an academic institution with expertise in health care 262
332	332	costs; 263
333	333	(6) Two appointed by the Governor, who shall be (A) a representative 264
334	334	of pharmacists, and (B) a representative of pharmacy benefit managers; 265
335	335	(7) The Secretary of the Office of Policy and Management, or the 266
336	336	secretary's designee; 267
337	337	(8) The Commissioner of Social Services, or the commissioner's 268
338	338	designee; 269
339	339	(9) The Commissioner of Public Health, or the commissioner's 270
340	340	designee; 271
341	341	(10) The Insurance Commissioner, or the commissioner's designee; 272
342	342	(11) The Commissioner of Consumer Protection, or the 273
343	343	commissioner's designee; 274
344	344	(12) The executive director of the Office of Health Strategy, or the 275
345	345	executive director's designee; and 276
346	346	(13) The Healthcare Advocate, or the Healthcare Advocate's 277
347	347	designee. 278
348	348	(c) All initial appointments to the council shall be made not later than 279
349	349	thirty days after the effective date of this section. Any vacancy shall be 280
350	350	filled by the appointing authority. 281
351	351	(d) The speaker of the House of Representatives and the president 282
352	352	pro tempore of the Senate shall select the chairpersons of the council 283
353	353	from among the members of the council. Such chairpersons shall 284
354	354	schedule the first meeting of the council, which shall be held not later 285
355	355	than sixty days after the effective date of this section. 286 Raised Bill No. 260
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361	361	(e) The administrative staff of the joint standing committee of the 287
362	362	General Assembly having cognizance of matters relating to insurance 288
363	363	shall serve as administrative staff of the council. 289
364	364	(f) Not later than September 1, 2023, and annually thereafter, the 290
365	365	council shall submit a report to the board, in accordance with the 291
366	366	provisions of section 11-4a of the general statutes, on its 292
367	367	recommendations concerning prescription drug prices. The council 293
368	368	shall also provide recommendations to the board at any time the board 294
369	369	requests such recommendations. 295
370	370	Sec. 5. Subdivision (12) of section 1-79 of the 2022 supplement to the 296
371	371	general statutes is repealed and the following is substituted in lieu 297
372	372	thereof (Effective October 1, 2022): 298
373	373	(12) "Quasi-public agency" means Connecticut Innovations, 299
374	374	Incorporated, the Connecticut Health and Education Facilities 300
375	375	Authority, the Connecticut Higher Education Supplemental Loan 301
376	376	Authority, the Connecticut Student Loan Foundation, the Connecticut 302
377	377	Housing Finance Authority, the State Housing Authority, the Materials 303
378	378	Innovation and Recycling Authority, the Capital Region Development 304
379	379	Authority, the Connecticut Lottery Corporation, the Connecticut 305
380	380	Airport Authority, the Connecticut Health Insurance Exchange, the 306
381	381	Connecticut Green Bank, the Connecticut Retirement Security 307
382	382	Authority, the Connecticut Port Authority, the Connecticut Municipal 308
383	383	Redevelopment Authority, the State Education Resource Center, [and] 309
384	384	the Paid Family and Medical Leave Insurance Authority and the 310
385	385	Prescription Drug Cost Control Board. 311
386	386	Sec. 6. Section 1-120 of the general statutes is repealed and the 312
387	387	following is substituted in lieu thereof (Effective October 1, 2022): 313
388	388	As used in sections 1-120 to 1-123, inclusive: 314
389	389	(1) "Quasi-public agency" means Conn ecticut Innovations, 315
390	390	Incorporated, the Connecticut Health and Educational Facilities 316
391	391	Authority, the Connecticut Higher Education Supplemental Loan 317 Raised Bill No. 260
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394	394
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397	397	Authority, the Connecticut Student Loan Foundation, the Connecticut 318
398	398	Housing Finance Authority, the Connecticut Housing Authority, the 319
399	399	Materials Innovation and Recycling Authority, the Capital Region 320
400	400	Development Authority, the Connecticut Lottery Corporation, the 321
401	401	Connecticut Airport Authority, the Connecticut Health Insurance 322
402	402	Exchange, the Connecticut Green Bank, the Connecticut Retirement 323
403	403	Security Authority, the Connecticut Port Authority, the Connecticut 324
404	404	Municipal Redevelopment Authority, the State Education Resource 325
405	405	Center, [and] the Paid Family and Medical Leave Insurance Authority 326
406	406	and the Prescription Drug Cost Control Board. 327
407	407	(2) "Procedure" means each statement, by a quasi-public agency, of 328
408	408	general applicability, without regard to its designation, that 329
409	409	implements, interprets or prescribes law or policy, or describes the 330
410	410	organization or procedure of any such agency. The term includes the 331
411	411	amendment or repeal of a prior regulation, but does not include, unless 332
412	412	otherwise provided by any provision of the general statutes, (A) 333
413	413	statements concerning only the internal management of any agency and 334
414	414	not affecting procedures available to the public, and (B) intra-agency 335
415	415	memoranda. 336
416	416	(3) "Proposed procedure" means a proposal by a quasi-public agency 337
417	417	under the provisions of section 1-121 for a new procedure or for a 338
418	418	change in, addition to or repeal of an existing procedure. 339
419	419	Sec. 7. Section 38a-8 of the general statutes is amended by adding 340
420	420	subsection (h) as follows (Effective October 1, 2022): 341
421	421	(NEW) (h) The commissioner shall have all the powers that are 342
422	422	reasonable and necessary to enforce the provisions of section 1 of this 343
423	423	act concerning assessment of fees on prescription drug manufacturers. 344
424	424	The commissioner may also set upper payment limits on prescription 345
425	425	drugs in the state after receiving recommendations on such limits from 346
426	426	the Prescription Drug Cost Control Board pursuant to section 3 of this 347
427	427	act. 348 Raised Bill No. 260
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433	433	This act shall take effect as follows and shall amend the following
434	434	sections:
435	435
436	436	Section 1 October 1, 2022 New section
437	437	Sec. 2 October 1, 2022 New section
438	438	Sec. 3 October 1, 2022 New section
439	439	Sec. 4 October 1, 2022 New section
440	440	Sec. 5 October 1, 2022 1-79(12)
441	441	Sec. 6 October 1, 2022 1-120
442	442	Sec. 7 October 1, 2022 38a-8
443	443
444	444	Statement of Purpose:
445	445	To establish a board with authority to monitor prescription drug costs
446	446	and recommend price caps on such drugs sold in the state.
447	447	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
448	448	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
449	449	underlined.]
450	450