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OLR Bill Analysis
sSB 8
AN ACT CONCERNING DRUG AFFORDABILITY.
TABLE OF CONTENTS:
SUMMARY
§§ 1-9 — CANADIAN PRESCRIPTION DRUG IMPORTATION
PROGRAM
Requires OHS to consult with DCP, DPH, and DSS to establish a program to import from
Canada prescription drugs with potential cost savings for Medicaid; specifies program
participation requirements for suppliers and wholesalers; requires OHS to report annually
on the program
§ 10 — PRESCRIPTION DRUG AFFORDABILITY BOARD
Creates the Prescription Drug Affordability Board to advise OHS on prescription drug
affordability; requires the board, beginning by December 31, 2025, to report annually to
certain legislative committees on drug affordability
§ 11 — PRESCRIPTION DRUG AFFORDABILITY STAKEHOLDER
COUNCIL
Establishes the Prescription Drug Affordability Stakeholder Council to advise PDAB;
requires the council to report on prescription drug prices to the board annually beginning
by September 1, 2025
§§ 12 & 13 — PRESCRIPTION DRUG PRICING ASSESSMENT
Requires PDAB to (1) identify drugs with high inflation or affordability challenges and (2)
recommend upper payment limits for drugs with affordability challenges to OHS; allows
PDAB to review drug prices and pricing practices
§ 14 — PAYMENT LIMIT VIOLATIONS
Prohibits state entities, health benefit plans, and participating ERISA plans from
purchasing drugs at a price higher than its upper payment limit; prohibits pharmacies from
distributing to certain consumers drugs purchased at a price higher than its upper payment
limit
§ 15 — COST SAVINGS
Requires state entities, health benefit plans, and participating ERISA plans to (1) use any
savings generated by an upper payment limit to lower consumers’ costs and (2) annually
report to PDAB and OHS on savings achieved; requires OHS to annually report on the
savings to certain legislative committees
§ 16 — DRUG WITHDRAW AL
Requires manufacturers to (1) provide six-months’ notice before withdrawing from sale a
drug with an established upper payment limit and (2) notify PDAB within 30 days if it 2024SB-00008-R000309-BA.DOCX
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expects a drug shortage; requires PDAB to fine a manufacturer up to $500,000 for failure
to give notice before withdrawing a drug
§§ 17-19 — INSULIN
Requires state entities and health benefit plans to cover certain insulin products at the
lowest wholesale acquisition cost in a preferred tier with no copayment or out-of-pocket
cost; allows plans to cover and offer more than one insulin product
§ 20 — DRUG SHORTAGE PREVENTION
Requires hospitals and drug purchasing agencies to (1) have drug shortage prevention
strategies covering at least one-third of expected use for at least 40 drugs and (2) include
in any long-term drug purchasing contract certain drug shortage mitigation strategies
§§ 21 & 22 — 340B DRUGS
Prohibits drug manufacturers, wholesalers, and distributors from (1) limiting a pharmacy’s
access to 340B drugs and (2) requiring health care organizations or pharmacies to submit
claims or utilization data as a condition for receiving 340B drugs; establishes a hearing
process and penalties for violators
SUMMARY
This bill takes various steps to address prescription drug affordability
and access for Connecticut consumers, including:
1. requiring the Office of Health Strategy (OHS) to establish the
Canadian Prescription Drug Importation Program to import
from Canada safe and effective drugs with potential cost savings
for Connecticut’s Medicaid and Children’s Health Insurance
Program (CHIP) programs;
2. establishing the Prescription Drug Affordability Board (PDAB)
and Prescription Drug Affordability Stakeholder Council to
review and make recommendations on prescription drugs’ costs
and affordability;
3. allowing PDAB to review and set upper payment limits for drugs
with high inflation or affordability challenges;
4. prohibiting state entities and health insurance plans from
purchasing, and pharmacies from distributing to certain
consumers, drugs purchased at a price higher than its upper
payment limit;
5. requiring state entities and health insurance plans to use cost 2024SB-00008-R000309-BA.DOCX
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savings attributable to an upper payment limit to reduce
consumers’ health care costs;
6. prohibiting manufacturers from withdrawing from distribution
in Connecticut a drug with an established upper payment limit
without first notifying the state and contracted purchasers;
7. requiring state entities and health insurance plans to cover, in a
preferred tier and without copayment or out-of-pocket costs,
insulin products at the lowest wholesale acquisition cost;
8. requiring Connecticut hospitals and drug purchasing agencies to
have drug shortage prevention strategies that cover at least one-
third of the expected use of at least 40 drugs; and
9. prohibiting drug manufacturers, wholesalers, and distributors
from limiting, or requiring claims and utilization data as a
condition of, a pharmacy or health care organization’s access to
drugs under the federal 340B drug program.
EFFECTIVE DATE: Various; see below.
§§ 1-9 — CANADIAN PR ESCRIPTION DRUG IMPO RTATION
PROGRAM
Requires OHS to consult with DCP, DPH, and DSS to establish a program to import
from Canada prescription drugs with potential cost savings for Medicaid; specifies
program participation requirements for suppliers and wholesalers; requires OHS to report
annually on the program
The bill requires the OHS executive director, in consultation with the
Department of Consumer Protection (DCP), Department of Public
Health (DPH), and Department of Social Services (DSS) commissioners,
to establish the “Canadian Prescription Drug Importation Program” to
import from Canada safe and effective prescription drugs with the
highest potential cost savings to the state’s medical assistance program
(i.e., Medicaid and CHIP).
EFFECTIVE DATE: July 1, 2024
Application for Federal Approval (§ 2)
By January 1, 2025, the OHS executive director must submit a request 2024SB-00008-R000309-BA.DOCX
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to the federal Food and Drug Administration (FDA) for approval of the
importation program. (Under federal law, drug importation programs
require federal approval.)
The request must, at least:
1. describe the state’s plans for operating the program,
2. demonstrate that the prescription drugs imported under the
program will (a) meet all applicable federal and state safety and
effectiveness standards and (b) comply with all federal tracing
procedures, and
3. disclose the program’s cost.
If the FDA approves the request, the OHS executive director and DCP
and DSS commissioners must:
1. notify the DPH commissioner and the Appropriations, General
Law, Human Services, and Public Health committees that the
request was approved and
2. with the DPH commissioner, begin operating the program within
180 days after the approval date.
The bill prohibits OHS from operating the importation program
without federal approval.
Importation (§§ 3 & 4)
Under the bill, a participating wholesaler (i.e., a wholesaler
designated by DCP to distribute prescription drugs imported from
Canada through the program) may import and distribute drugs if they:
1. meet FDA safety, effectiveness, misbranding, and adulteration
standards and
2. are not (a) controlled substances, (b) biologics, (c) infused, (d)
intravenously injected, (e) inhaled during surgery, or (f)
parenteral drugs that the federal Health and Human Services 2024SB-00008-R000309-BA.DOCX
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secretary determines pose a public health threat.
Wholesalers are also prohibited from importing prescription drugs if
doing so violates federal patent laws.
Wholesalers may import and distribute prescription drugs to a
pharmacy or institutional pharmacy for the medical assistance program
or to a DPH-registered laboratory for analytical testing.
Track-and-Trace (§ 5)
Under the bill, the OHS executive director must require Canadian
suppliers and participating wholesalers to comply with all applicable
track-and-trace requirements (e.g., document the manufacturer, supply,
and distribution chain) and prohibits them from distributing,
dispensing, or selling any imported drugs outside of Connecticut.
Under the bill, the suppliers and wholesalers must make track-and-
trace records available to the executive director within 48 hours after her
request.
Safety (§ 6)
Under the bill, participating wholesalers must ensure the safety and
quality of all imported drugs. This includes:
1. for each initial shipment of imported drugs, having a laboratory
test a statistically valid sample size for each batch of each drug in
the shipment for authenticity and degradation consistent with
federal requirements and
2. for subsequent shipments, test a statistically valid sample for
authenticity and degradation.
Wholesalers must also:
1. certify that each imported drug is approved for marketing in the
United States, is not adulterated or misbranded, and meets
federal labeling requirements;
2. maintain laboratory records, including data from all tests 2024SB-00008-R000309-BA.DOCX
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necessary to ensure the drug complies with the bill’s
requirements; and
3. maintain documentation that the testing required by the bill was
done at a laboratory in compliance with federal and state laws
and regulations.
The bill requires wholesalers to maintain the records required under
the bill for at least three years from the date they are submitted, as noted
below.
Wholesaler Records (§ 6)
The bill requires each wholesaler to maintain for each imported drug:
1. the name and quantity of the drug’s active ingredient;
2. a description of the drug’s dosage form;
3. the quantity of and date on which the wholesaler received the
drug, and the price it paid;
4. the drug’s origin point and destination;
5. a report for any drug that failed laboratory testing; and
6. any other information and documentation the OHS executive
director requires for the protection of public health.
This information must be submitted to OHS upon the executive
director’s request.
Supplier Records (§ 6)
The bill requires each participating Canadian supplier to maintain the
following information for each exported drug:
1. the drug’s original source, including the manufacturer’s name,
date and location it was manufactured, and shipment date and
quantity;
2. the quantity of each lot of drug originally received and its source; 2024SB-00008-R000309-BA.DOCX
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3. the manufacturer-assigned lot or control number and batch
number; and
4. any other information and documentation the OHS executive
director, in consultation with the DCP, DPH, and DSS
commissioners, requires for the protection of public health.
This information must be submitted to the OHS executive director
and the DCP commissioner upon request.
Enforcement (§ 7)
The bill requires the OHS executive director to issue a written order
suspending the drug’s import and distribution, or suspending all
importation and distribution of drugs by a wholesaler or Canadian
supplier, if she discovers the import or distribution of the drug or the
wholesaler or supplier violates any of the bill’s provisions or any other
applicable state or federal law or regulation.
She must also issue a written order requiring the recall or seizure of
any imported drug that has been misbranded or identified as
adulterated.
If the executive director issues an order against a wholesaler or
supplier, she must notify the wholesaler or supplier (1) of the order,
along with its legal and factual basis, and (2) that they may make a
written request for a hearing within 30 days after the notice date.
If the executive director receives a timely request for a hearing, she
must convene it as a contested case under the Uniform Administrative
Procedure Act (UAPA) within 30 days of receiving the request, and
must issue a final decision vacating, modifying, or affirming the order
within 60 days after the request. Any supplier or wholesaler aggrieved
by a final decision may appeal to Superior Court according to existing
UAPA provisions.
Regulations (§ 8)
The bill authorizes the OHS executive director, in consultation with
the DCP, DPH, and DSS commissioners, to adopt regulations to 2024SB-00008-R000309-BA.DOCX
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implement the drug importation program.
Reporting (§ 9)
Starting no later than 180 days after the program begins, the bill
requires the OHS executive director to annually submit a report to the
Appropriations, General Law, Human Services, and Public Health
committees describing the importation program’s operations and
recommendations for expanding the program to other state-funded and
privately funded health care programs.
§ 10 — PRESCRIPTION DRUG AFFORDABILITY BO ARD
Creates the Prescription Drug Affordability Board to advise OHS on prescription drug
affordability; requires the board, beginning by December 31, 2025, to report annually to
certain legislative committees on drug affordability
The bill establishes PDAB within OHS for administrative purposes to
advise the OHS executive director on decisions regarding prescription
drug affordability. Specifically, the board must:
1. explore strategies to reduce out-of-pocket drug costs for
consumers while supporting biotechnology innovations and
scientific discovery,
2. identify opportunities for consumer savings by studying the
prescription drug supply chain and pharmaceutical pricing
strategies,
3. monitor prescription drug prices in Connecticut,
4. promote innovative strategies for the use of more affordable
drugs,
5. consider recommendations from the stakeholder council
established by this bill (see § 11), and
6. recommend drug cost affordability tool options to the OHS
executive director.
To carry out its duties, the bill authorizes PDAB to do the following:
1. collect and review (a) publicly available information and (b) 2024SB-00008-R000309-BA.DOCX
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information available via private subscriptions about various
health care organizations’ prescription drug pricing and business
practices, including the pharmacy benefit managers’ annual
report required by state law;
2. identify innovative strategies, including importing prescription
drugs from Canada or other foreign jurisdictions, to lower
prescription drug costs for consumers;
3. identify states with innovative programs to lower prescription
drug costs, and, if approved by the board, enter into memoranda
of understanding (MOU) with these states to collect data and
information to establish similar programs in Connecticut; and
4. receive any aid or contributions from any source, as long as it is
not a conflict of interest, to use to carry out its purposes.
EFFECTIVE DATE: July 1, 2024
Membership
Under the bill, PDAB is comprised of five gubernatorial appointees
who must have an (1) advance degree and (2) experience or expertise in
health care economics, health services research, pharmacoeconomics,
pharmacology, or clinical medicine. At least one member must have
experience in consumer advocacy and health equity.
The governor, with approval from either legislative chamber, must
make initial board appointments by January 1, 2025. The governor must
also select the board’s chairperson from among its members. Generally,
board members will serve three-year terms, except initial appointees’
terms will expire as follows:
1. two members will serve three-year terms,
2. two members will serve two-year terms, and
3. one member will serve a one-year term.
The bill allows the governor to assign these term limits among initial 2024SB-00008-R000309-BA.DOCX
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board members. Under the bill, the governor may also, without review,
remove any board member for malfeasance, failure to regularly attend
meetings, or any reason that makes the member incapable of fulfilling
PDAB duties. The governor must fill any vacancies, and appointments
occurring other than by term expiration are for the unexpired term
balance.
The bill allows members to be privately employed, subject to any
applicable state ethics rules, but if a member discovers a conflict of
interest (i.e., a financial or personal association that may cause bias or a
financial benefit related to the board’s work), he or she must report it at
the next board meeting.
Meetings
The bill requires the chairperson to schedule and hold the board’s
first meeting by February 1, 2025, and the board must meet at least four
times annually. A majority of members constitutes a quorum for
conducting business, and any determination the board makes must
have majority support.
Reporting Requirement
The bill requires PDAB, beginning by December 31, 2025, to annually
report to the Aging, General Law, Human Services, Insurance and Real
Estate, and Public Health committees on the following:
1. strategies to identify and eliminate pricing or business practices
that do not support drug development innovation;
2. price trends and affordability strategies for specific drugs
identified to have recent high-cost increases (see § 13);
3. recommendations for legislation to make prescription drugs
more affordable while enhancing drug development innovation;
4. purchasing strategies, cost effectiveness evaluations, and new
technology or drug developments that increase affordability; and
5. a summary and evaluation of the boa rd’s activities and 2024SB-00008-R000309-BA.DOCX
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recommendations.
§ 11 — PRESCRIPTION DRUG AFFORDABILITY S TAKEHOLDER
COUNCIL
Establishes the Prescription Drug Affordability Stakeholder Council to advise PDAB;
requires the council to report on prescription drug prices to the board annually beginning
by September 1, 2025
The bill establishes the 21-member Prescription Drug Affordability
Stakeholder Council to advise PDAB on decisions about prescription
drug affordability. Beginning by September 1, 2025, the council must
annually report its recommendations on prescription drug prices to
PDAB. Additionally, the council must give recommendations to the
board at its request.
The bill designates the Insurance and Real Estate Committee’s
administrative staff as the council’s administrative staff. The council
must hold its first meeting by August 30, 2024 (i.e., within 60 days after
this section’s effective date).
EFFECTIVE DATE: July 1, 2024
Membership and Appointments
Under the bill, the council has seven ex officio members and the
following 14 appointed members:
1. three members appointed by the House speaker, including a
representative from a statewide advocacy organization for (a) a
health care coalition, (b) elderly people, and (c) diverse
communities;
2. three members appointed by the Senate president pro tempore,
including a (a) labor union representative, (b) health services
researcher, and (c) consumer who has experienced barriers to
getting prescription drugs due to their cost;
3. two members appointed by the House majority leader, including
a representative of (a) physicians and (b) nurses;
4. two members appointed by the House minority leader, including 2024SB-00008-R000309-BA.DOCX
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a representative of (a) private insurers and (b) brand-name drug
corporations;
5. two members appointed by the Senate minority leader, including
a representative of (a) generic drug corporations and (b) an
academic institution with expertise in health care costs; and
6. two members appointed by the governor, including a
representative of (a) pharmacists and (b) pharmacy benefit
managers.
The council’s ex officio members are the Office of Policy and
Management secretary; DCP, DPH, DSS, and insurance commissioners;
OHS executive director; and Healthcare Advocate, or their designees.
Under the bill, initial appointments must be made by November 1,
2024 (though the bill requires the council to hold its first meeting prior
to this date), and council members serve three-year terms. The bill
requires the House and Senate leaders to select the council’s
chairpersons from among its members.
§§ 12 & 13 — PRESCRIPTION DRUG PRICING ASSE SSMENT
Requires PDAB to (1) identify drugs with high inflation or affordability challenges and
(2) recommend upper payment limits for drugs with affordability challenges to OHS;
allows PDAB to review drug prices and pricing practices
The bill allows PDAB to assess prescription drug pricing information
by doing the following:
1. entering into an MOU with another state to which a drug
manufacturer reports pricing information;
2. assessing spending for a drug in Connecticut;
3. using data and findings, including consumer affordability
strategies, developed by (a) similar boards in other states or (b)
other state or federal entities;
4. using the federally established prescription drug maximum fair
price for Medicare members; and 2024SB-00008-R000309-BA.DOCX
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5. assessing any other available pricing information.
EFFECTIVE DATE: July 1, 2024
Annual Inflation-Adjusted Costs
The bill requires PDAB, beginning July 1, 2025, to identify
prescription drugs that, when adjusted annually for inflation, are:
1. brand-name drugs with a launch wholesale acquisition cost of at
least $30,000 or more per year or treatment course,
2. brand-name drugs with a wholesale acquisition cost increase of
at least $3,000 in a 12-month period, or
3. biosimilars (i.e., drugs similar to other licensed drugs) with a
launch wholesale acquisition cost not at least 15% lower than the
referenced brand biologic.
The board must also identify generic drugs that have:
1. a wholesale acquisition cost of at least $100 for (a) a 30-day
dosage supply, (b) a supply lasting a patient fewer than 30 days
based on the recommended dosage, or (c) one unit of drug if the
FDA does not recommend a finite dosage; or
2. a wholesale acquisition cost that increased by at least 200% in the
previous 12-month period.
Affordability Challenges
Beginning July 1, 2025, the bill requires the board to identify other
drugs or pricing practices that have created, or may create, affordability
challenges for Connecticut’s health care system or patients, including
drugs to address significant public health priorities. To do so, the bill
allows the board to consider the following:
1. the drug’s wholesale acquisition cost;
2. the price of therapeutic alternatives;
3. the price concession, discount, or rebate the manufacturer 2024SB-00008-R000309-BA.DOCX
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provides or is expected to provide to health plans and pharmacy
benefits managers for (a) the drug under review and (b)
therapeutic alternatives;
4. the cost to health plans for patient access based on standard
dosage;
5. how the drug’s cost relative to health plan benefit design impacts
patient access;
6. the current or expected cost for manufacturer-supported patient
access programs;
7. the drug’s financial impacts on health, medical, or social services
costs relative to those for therapeutic alternatives;
8. a Connecticut patient’s average copayment or other cost sharing
for the drug; and
9. any other factors it deems necessary or any other information the
manufacturer provides.
Prescription Drug Review
The bill allows PDAB to review, within available appropriations, any
drug or pricing practice that has a high cost when adjusted for inflation
or creates an affordability challenge if, after (1) seeking stakeholder
input and (2) considering the average patient cost share of the drug, it
determines a review is in the interest of consumers.
Under the bill, when doing a review, the board must examine any
information related to the drug’s pricing, including:
1. net average price in the state;
2. market competition and context;
3. the manufacturer’s projected revenue;
4. estimated value or cost effectiveness; 2024SB-00008-R000309-BA.DOCX
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5. if and how the drug is an innovative therapy or likely to improve
health for target consumers; and
6. cost mitigation strategies relevant to the drug, such as rebates,
discounts, and patient access programs.
The bill also allows the board to examine costs or potential costs of
FDA breakthrough and orphan drugs (i.e., drugs to treat rare
conditions).
Upper Payment Limits
The bill requires the board to recommend to the OHS executive
director and insurance commissioner an upper payment limit for any
drug it determines has led or will lead to an affordability challenge. The
board must consider (1) the cost of administering the drug, (2) the cost
of delivering the drug to patients, and (3) relevant administrative costs
when determining its recommended upper payment limit.
To makes its recommendation, the bill allows the board to use:
1. upper payments set by (a) boards in other states and (b) other
state or federal entities, as long as their price justification process
is as rigorous as that outlined in this bill; and
2. a prescription drug’s Medicare maximum fair price.
§ 14 — PAYMENT LIMIT VIOLATIONS
Prohibits state entities, health benefit plans, and participating ERISA plans from
purchasing drugs at a price higher than its upper payment limit; prohibits pharmacies
from distributing to certain consumers drugs purchased at a price higher than its upper
payment limit
The bill makes it a violation for a state entity, health benefit plan (e.g.,
a commercial health insurance policy), or participating Employee
Retirement Income Security Act (ERISA) plan (e.g., a health plan subject
to federal minimum standards that chooses to participate in the bill’s
requirements) to purchase drugs for consumers at a price higher than
the PDAB-established upper payment limit. The bill requires any
contract between a state entity, health benefit plan, or participating
ERISA plan and a third party to include that rates paid for drugs may 2024SB-00008-R000309-BA.DOCX
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not exceed the upper payment limit.
Similarly, under the bill a Connecticut-licensed retail pharmacy may
not purchase drugs meant for people whose health care is provided by
a state entity, health benefit plan, or ERISA plan at a price higher than
the PDAB’s upper payment limit.
The bill is silent on how these violations will be assessed and what
penalties may be imposed.
EFFECTIVE DATE: July 1, 2025
§ 15 — COST SAVINGS
Requires state entities, health benefit plans, and participating ERISA plans to (1) use any
savings generated by an upper payment limit to lower consumers’ costs and (2) annually
report to PDAB and OHS on savings achieved; requires OHS to annually report on the
savings to certain legislative committees
Under the bill, any savings a state entity, health benefit plan, or
participating ERISA plan generates that are attributable to an
implemented upper payment limit must be used to reduce consumers’
health care costs, prioritizing reducing out-of-pocket prescription drug
costs.
Beginning by April 1, 2026, the bill requires the state entities and
plans to annually report to PDAB and OHS on savings achieved and
how savings were used to reduce consumers’ costs.
The bill requires the OHS executive director, beginning by July 1,
2026, to annually report on savings achieved and recommendations to
increase savings to the Appropriations, General Law, Human Services,
Insurance and Real Estate, and Public Health committees.
EFFECTIVE DATE: July 1, 2025
§ 16 — DRUG WITHDRAW AL
Requires manufacturers to (1) provide six-months’ notice before withdrawing from sale a
drug with an established upper payment limit and (2) notify PDAB within 30 days if it
expects a drug shortage; requires PDAB to fine a manufacturer up to $500,000 for failure
to give notice before withdrawing a drug
The bill requires a manufacturer to give at least six-months’ written 2024SB-00008-R000309-BA.DOCX
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notice before it discontinues distributing a drug for which the board has
established an upper payment limit to (1) PDAB, (2) the insurance
commissioner, (3) the attorney general, and (4) any entity with which it
is contracted with for the drug’s sale. The bill also requires a
manufacturer that expects a shortage of its drug to notify PDAB within
30 days after making this determination.
Under the bill, PDAB must fine a manufacturer up to $500,000 if it
fails to give the required notice before withdrawing a drug.
EFFECTIVE DATE: July 1, 2025
§§ 17-19 — INSULIN
Requires state entities and health benefit plans to cover certain insulin products at the
lowest wholesale acquisition cost in a preferred tier with no copayment or out-of-pocket
cost; allows plans to cover and offer more than one insulin product
The bill requires state entities and health benefit plans (other than as
required in collectively bargained agreements that affect the state
employee plan) to make available to beneficiaries an eligible insulin
product at the lowest wholesale acquisition cost in a preferred tier with
no copayment or out-of-pocket cost. An “eligible insulin product” is an
insulin product, including pens or vials, for which at least two licenses
have been issued and that continues to be marketed.
Under current law, health benefit plans generally must cap the cost
of insulin at $25 per 30-day supply (CGS §§ 38a-492d & -518d).
The bill also allows state entities and health benefit plans to (1) cover
more than one eligible insulin product in a preferred tier and (2) offer,
without out-of-pocket costs, another eligible insulin product if the
product has a net cost lower than the lowest wholesale acquisition cost.
EFFECTIVE DATE: January 1, 2025
§ 20 — DRUG SHORTAGE PREVENTION
Requires hospitals and drug purchasing agencies to (1) have drug shortage prevention
strategies covering at least one-third of expected use for at least 40 drugs and (2) include
in any long-term drug purchasing contract certain drug shortage mitigation strategies
The bill requires hospitals and drug purchasing agencies (i.e., the 2024SB-00008-R000309-BA.DOCX
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departments of correction, mental health and addiction services, and
social services) to have a drug shortage prevention strategy that covers
at least one-third of the hospital’s or agency’s expected use of at least 40
eligible drugs. Under the bill, “eligible drugs” are federally approved
injectables on the FDA’s drug shortage list, on the list within the past
five years, or at risk of shortage.
EFFECTIVE DATE: July 1, 2024
Contract Requirements
In any long-term prescription drug purchase contract, a hospital or
agency must require the contracting entity to:
1. hold physical reserve inventory equal to two quarters of the
contract volume to buffer supply disruption or demand, unless
the drug is in shortage or subject to a supply disruption;
2. have a competent quality control unit and processes to evaluate
supplier quality;
3. have a process to ensure drug quality and complete
documentation of good manufacturing practices; and
4. participate, following federal law, in the 340B Drug Pricing
Program.
Reporting Requirements
The bill outlines the following drug shortage prevention compliance
reporting requirements:
1. beginning by January 1, 2025, hospitals must annually report to
the DPH commissioner documentation of their compliance;
2. beginning by February 1, 2025, the correction, mental health and
addiction services, DPH, and DSS commissioners must annually
report to OHS on hospitals’, drug purchasing agencies’, and
contractors’ compliance; and
3. beginning by April 1, 2025, the OHS executive director must 2024SB-00008-R000309-BA.DOCX
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report this information to the General Law, Human Services,
Judiciary, and Public Health committees.
§§ 21 & 22 — 340B DRUGS
Prohibits drug manufacturers, wholesalers, and distributors from (1) limiting a
pharmacy’s access to 340B drugs and (2) requiring health care organizations or
pharmacies to submit claims or utilization data as a condition for receiving 340B drugs;
establishes a hearing process and penalties for violators
Under federal law, the 340B Drug Pricing Program requires drug
manufacturers participating in Medicaid to provide outpatient drugs to
eligible healthcare organizations that treat low-income and uninsured
patients (i.e., “covered entities”) at reduced prices. Pharmacies may
contract with 340B-participating healthcare organizations (e.g.,
hospitals or outpatient clinics) to also purchase reduced-price
outpatient drugs.
The bill prohibits manufacturers, third-party logistics providers,
wholesalers, or distributors, or their agents or affiliates, from directly or
indirectly taking any of the following actions:
1. limiting a 340B-authorized pharmacy’s access to 340B drugs,
unless the pharmacy’s receipt of a drug is federally prohibited;
or
2. requiring a covered entity or pharmacy contracted with a
covered entity to submit claims or utilization data as a condition
for acquiring a 340B drug, unless the claims or data sharing is
federally required.
EFFECTIVE DATE: Upon passage
Violations
Beginning July 1, 2024, the bill subjects entities to a civil penalty of up
to $50,000 if the OHS executive director receives information or has
reasonable belief that the entity has violated these restrictions.
The bill allows the executive director to issue notice of the violation
and civil penalty by mail or personal service. The notice must include: 2024SB-00008-R000309-BA.DOCX
Researcher: SL Page 20 4/8/24
1. reference to the Connecticut law or regulation that has been
violated;
2. a short and plain language statement of the violation;
3. a description of the activity to cease;
4. the amount of the imposed civil penalty; and
5. explanation of the right to request, in writing to OHS, a hearing
within 10 business days of receiving the notice.
Under the bill, OHS must hold requested hearings following the
UAPA. If after a hearing OHS find that a violation has occurred or that
the entity has violated any OHS order, the office must issue a final cease
and desist order in addition to any civil penalty imposed.
If a timely hearing request is not made, OHS must issue a cease and
desist order or impose a civil penalty.
The bill specifies that its 340B drug provisions must not be applied in
a way that conflicts with, or is less restrictive than, applicable state and
federal laws.
COMMITTEE ACTION
Human Services Committee
Joint Favorable Substitute
Yea 15 Nay 7 (03/19/2024)