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General Assembly Substitute Bill No. 8
February Session, 2024
AN ACT CONCERNING DRUG AFFORDABILITY.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2024) For the purposes of this 1
section and sections 2 to 9, inclusive, of this act, unless the context 2
otherwise requires: 3
(1) "Canadian supplier" means a manufacturer or wholesale drug 4
distributor that is licensed or permitted under applicable Canadian law 5
to manufacture or distribute prescription drugs; 6
(2) "Canadian prescription drug importation program" or "program" 7
means the Canadian prescription drug importation program 8
established by the executive director of the Office of Health Strategy, in 9
consultation with the Commissioners of Social Services, Consumer 10
Protection and Public Health, pursuant to section 2 of this act; 11
(3) "Drug" means an article that is (A) recognized in the official United 12
States Pharmacopoeia, official Homeopathic Pharmacopoeia of the 13
United States or official National Formulary, or any supplement thereto, 14
(B) intended for use in the diagnosis, cure, mitigation, treatment or 15
prevention of disease in humans, (C) not food and intended to affect the 16
structure or any function of the human body, and (D) not a device and 17
intended for use as a component of any article specified in 18 Substitute Bill No. 8
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subparagraphs (A) to (C), inclusive, of this subdivision; 19
(4) "Drug Quality and Security Act" means the federal Drug Quality 20
and Security Act, 21 USC 351, et seq., as amended from time to time; 21
(5) "Food, Drug and Cosmetic Act" means the federal Food, Drug and 22
Cosmetic Act, 21 USC 301, et seq., as amended by the Drug Quality and 23
Security Act, as both may be amended from time to time; 24
(6) "Laboratory" means an environmental laboratory as defined in 25
section 19a-29a of the general statutes that is accredited as a testing 26
laboratory in accordance with International Organization for 27
Standardization (ISO) 17025 standards; 28
(7) "Laboratory testing" means a quantitative and qualitative analysis 29
of a drug consistent with the applicable provisions of the official United 30
States Pharmacopoeia; 31
(8) "Medical assistance program" means the state's Medicaid program 32
established under Title XIX of the Social Security Act, as amended from 33
time to time, and the Children's Health Insurance Program established 34
under Title XXI of the Social Security Act, as amended from time to time; 35
(9) "Participating Canadian supplier" means a Canadian supplier that 36
is exporting prescription drugs, in the manufacturer's original 37
container, to a participating wholesaler for distribution in this state 38
under the program; 39
(10) "Participating wholesaler" means a wholesaler that is (A) 40
designated by the Department of Consumer Protection to distribute 41
prescription drugs, in the manufacturer's original container, obtained 42
from a participating Canadian supplier, and (B) participating in the 43
program; 44
(11) "Track-and-trace" means the product tracing process for the 45
components of the pharmaceutical distribution supply chain as 46
described in Title II of the Drug Quality and Security Act; and 47 Substitute Bill No. 8
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(12) "Wholesaler" means a wholesaler, as defined in section 21a-70 of 48
the general statutes, that has received a certificate of registration from 49
the Commissioner of Consumer Protection pursuant to said section. 50
Sec. 2. (NEW) (Effective July 1, 2024) (a) The executive director of the 51
Office of Health Strategy, in consultation with the Commissioners of 52
Social Services, Consumer Protection and Public Health, shall establish 53
the "Canadian prescription drug importation program". 54
Notwithstanding any provision of the general statutes, the program 55
shall provide for the importation of safe and effective prescription drugs 56
from Canada for the medical assistance program that have the highest 57
potential for cost savings in this state as determined by the executive 58
director in consultation with said commissioners. 59
(b) (1) Not later than January 1, 2025, the executive director of the 60
Office of Health Strategy shall submit a request to the federal Food and 61
Drug Administration seeking approval for the program under Section 62
804 of the federal Food, Drug and Cosmetic Act, 21 USC 384(b) to 21 63
USC 384(h), inclusive, as amended from time to time. Such request shall, 64
at a minimum: 65
(A) Describe the state's plans for operating the program; 66
(B) Demonstrate that any prescription drug that is imported and 67
distributed in this state under the program: 68
(i) Meets all applicable federal and state standards for safety and 69
effectiveness; and 70
(ii) Complies with all federal tracing procedures; and 71
(C) Disclose the costs of implementing the program. 72
(2) (A) If the federal Food and Drug Administration approves the 73
request, the executive director of the Office of Health Strategy and the 74
Commissioners of Social Services and Consumer Protection shall: 75
(i) Submit to the Commissioner of Public Health a notice disclosing 76 Substitute Bill No. 8
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that the federal Food and Drug Administration approved such request; 77
(ii) Submit to the joint standing committees of the General Assembly 78
having cognizance of matters relating to appropriations and the budgets 79
of state agencies, general law, human services and public health a notice 80
disclosing that the federal Food and Drug Administration approved 81
such request; and 82
(iii) Begin operating the program in conjunction with the 83
Commissioners of Social Services, Consumer Protection and Public 84
Health not later than one hundred eighty days after the date of such 85
approval. 86
(B) The executive director of the Office of Health Strategy shall not 87
operate the program unless the federal Food and Drug Administration 88
approved the request. 89
Sec. 3. (NEW) (Effective July 1, 2024) Each participating wholesaler 90
may import and distribute a prescription drug in this state for use in the 91
medical assistance program from a participating Canadian supplier 92
under the program if: 93
(1) Such drug meets the United States Food and Drug 94
Administration's standards concerning drug safety, effectiveness, 95
misbranding and adulteration; 96
(2) Importing such drug would not violate federal patent laws; and 97
(3) Such drug is not: 98
(A) A controlled substance, as defined in 21 USC 802, as amended 99
from time to time; 100
(B) A biological product, as defined in 42 USC 262, as amended from 101
time to time; 102
(C) An infused drug; 103
(D) An intravenously injected drug; 104 Substitute Bill No. 8
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(E) A drug that is inhaled during surgery; or 105
(F) A drug that is a parenteral drug, the importation of which is 106
determined by the federal Secretary of Health and Human Services to 107
pose a threat to the public health. 108
Sec. 4. (NEW) (Effective July 1, 2024) Participating wholesalers may, 109
subject to the provisions of sections 2 to 9, inclusive, of this act, import 110
and distribute drugs in this state for use in the medical assistance 111
program from a participating Canadian supplier under the program to: 112
(1) A pharmacy or institutional pharmacy, as defined in section 20-113
571 of the general statutes, solely for prescriptions covered under the 114
medical assistance program; and 115
(2) A laboratory registered with the Department of Public Health 116
under section 19a-29a of the general statutes to perform analytical 117
testing. 118
Sec. 5. (NEW) (Effective July 1, 2024) The executive director of the 119
Office of Health Strategy shall require that each participating Canadian 120
supplier and participating wholesaler (1) comply with all applicable 121
track-and-trace requirements, and shall not distribute, dispense or sell 122
outside of this state any prescription drug that is imported into this state 123
under the program, and (2) make available to the executive director all 124
track-and-trace records not later than forty-eight hours after the 125
executive director requests such records. 126
Sec. 6. (NEW) (Effective July 1, 2024) (a) The participating wholesaler 127
shall ensure the safety and quality of all drugs that are imported and 128
distributed in this state under the program. The participating 129
wholesaler shall: 130
(1) For each initial shipment of a drug that is imported into this state 131
by a participating wholesaler, ensure that a laboratory engaged by the 132
participating wholesaler tests a statistically valid sample size for each 133
batch of each drug in such shipment for authenticity and degradation in 134 Substitute Bill No. 8
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a manner that is consistent with the Food, Drug and Cosmetic Act; 135
(2) For each shipment of a drug that is imported into this state by a 136
participating wholesaler and has been sampled and tested pursuant to 137
subdivision (1) of this subsection, ensure that a laboratory engaged by 138
the participating wholesaler tests a statistically valid sample of such 139
shipment for authenticity and degradation in a manner that is consistent 140
with the Food, Drug and Cosmetic Act; 141
(3) Certify that each drug imported into this state under the program: 142
(A) Is approved for marketing in the United States and not 143
adulterated or misbranded; and 144
(B) Meets all of the labeling requirements under 21 USC 352, as 145
amended from time to time; 146
(4) Maintain laboratory records, including, but not limited to, 147
complete data derived from all tests necessary to ensure that each drug 148
imported into this state under the program is in compliance with the 149
requirements of this section; and 150
(5) Maintain documentation demonstrating that the testing required 151
by this section was conducted at a laboratory in accordance with the 152
Food, Drug and Cosmetic Act and all other applicable federal and state 153
laws and regulations concerning laboratory qualifications. 154
(b) The participating wholesaler shall maintain all information and 155
documentation that is submitted pursuant to this section for a period of 156
not less than three years from the date of submission. 157
(c) Each participating wholesaler shall maintain all of the following 158
information for each drug that such participating wholesaler imports 159
and distributes in this state under the program, and submit such 160
information to the executive director of the Office of Health Strategy 161
upon request by the executive director: 162
(1) The name and quantity of the active ingredient of such drug; 163 Substitute Bill No. 8
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(2) A description of the dosage form of such drug; 164
(3) The date on which such participating wholesaler received such 165
drug; 166
(4) The quantity of such drug that such participating wholesaler 167
received; 168
(5) The point of origin and destination of such drug; 169
(6) The price paid by such participating wholesaler for such drug; 170
(7) A report for any drug that fails laboratory testing; and 171
(8) Such additional information and documentation that the 172
executive director of the Office of Health Strategy deems necessary to 173
ensure the protection of the public health. 174
(d) The executive director of the Office of Health Strategy shall 175
require each participating Canadian supplier to maintain the following 176
information and documentation and, upon request by the executive 177
director, submit such information and documentation to the executive 178
director and the Commissioner of Consumer Protection for each drug 179
that such participating Canadian supplier exports into this state under 180
the program: 181
(1) The original source of such drug, including, but not limited to: 182
(A) The name of the manufacturer of such drug; 183
(B) The date on which such drug was manufactured; and 184
(C) The location where such drug was manufactured; 185
(2) The date on which such drug was shipped; 186
(3) The quantity of such drug that was shipped; 187
(4) The quantity of each lot of such drug originally received and the 188
source of such lot; 189 Substitute Bill No. 8
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(5) The lot or control number and the batch number assigned to such 190
drug by the manufacturer; and 191
(6) Such additional information and documentation that the 192
executive director of the Office of Health Strategy, in consultation with 193
the Commissioners of Social Services, Consumer Protection and Public 194
Health, deems necessary to ensure the protection of the public health. 195
Sec. 7. (NEW) (Effective July 1, 2024) (a) The executive director of the 196
Office of Health Strategy shall issue a written order: 197
(1) Suspending importation and distribution of a drug under the 198
program if the executive director discovers that such distribution or 199
importation violates any provision of sections 2 to 9, inclusive, of this 200
act or any other applicable state or federal law or regulation; 201
(2) Suspending all importation and distribution of drugs by a 202
participating wholesaler under the program if the executive director 203
discovers that the participating wholesaler has violated any provision 204
of sections 2 to 9, inclusive, of this act or any other applicable state or 205
federal law or regulation; 206
(3) Suspending all importation and distribution of drugs by a 207
participating Canadian supplier under the program if the executive 208
director discovers that the participating Canadian supplier has violated 209
any provision of sections 2 to 9, inclusive, of this act or any other 210
applicable state or federal law or regulation; or 211
(4) Requiring the recall or seizure of any drug that was imported and 212
distributed under the program and has been identified as adulterated, 213
within the meaning of section 21a-105 of the general statutes, or 214
misbranded. 215
(b) The executive director of the Office of Health Strategy shall send 216
a notice to each participating Canadian supplier and participating 217
wholesaler affected by an order issued pursuant to subsection (a) of this 218
section notifying such participating Canadian supplier or participating 219 Substitute Bill No. 8
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wholesaler that: 220
(1) The executive director of the Office of Health Strategy has issued 221
such order, and provide the legal and factual basis for such order; and 222
(2) Such participating Canadian supplier or participating wholesaler 223
may request, in writing, a hearing before the executive director of the 224
Office of Health Strategy, provided such request is received by the 225
executive director not later than thirty days after the date of such notice. 226
(c) If a hearing is timely requested pursuant to subsection (b) of this 227
section, the executive director of the Office of Health Strategy shall, not 228
later than thirty days after the receipt of the request, convene the hearing 229
as a contested case in accordance with the provisions of chapter 54 of 230
the general statutes. Not later than sixty days after the receipt of such 231
request, the executive director shall issue a final decision vacating, 232
modifying or affirming the order. The participating Canadian supplier 233
or participating wholesaler aggrieved by such final decision may appeal 234
such decision in accordance with the provisions of section 4-183 of the 235
general statutes. 236
Sec. 8. (NEW) (Effective July 1, 2024) The executive director of the 237
Office of Health Strategy may, in consultation with the Commissioners 238
of Social Services, Consumer Protection and Public Health, adopt 239
regulations in accordance with the provisions of chapter 54 of the 240
general statutes to implement the provisions of sections 2 to 9, inclusive, 241
of this act. 242
Sec. 9. (NEW) (Effective July 1, 2024) Not later than one hundred eighty 243
days after the program begins, and annually thereafter, the executive 244
director of the Office of Health Strategy established under section 19a-245
754a of the general statutes shall submit a report, in accordance with the 246
provisions of section 11-4a of the general statutes, to the joint standing 247
committees of the General Assembly having cognizance of matters 248
relating to appropriations and the budgets of state agencies, general law, 249
human services and public health. Such report shall describe the 250
operations of the program established pursuant to section 2 of this act 251 Substitute Bill No. 8
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and recommendations for expanding the program to other state-funded 252
and privately funded health care programs. 253
Sec. 10. (NEW) (Effective July 1, 2024) (a) There is established the 254
Prescription Drug Affordability Board to advise the executive director 255
of the Office of Health Strategy on decisions regarding the affordability 256
of prescription drugs. The board shall be within the Office of Health 257
Strategy for administrative purposes only. 258
(b) The purposes of the Prescription Drug Affordability Board shall 259
be to (1) explore strategies to reduce out-of-pocket drug costs to 260
consumers while supporting innovations in biotechnology and scientific 261
discovery, (2) study the prescription drug supply chain and 262
pharmaceutical pricing strategies to identify opportunities for consumer 263
savings, (3) monitor prescription drug prices in the state, (4) promote 264
innovative strategies for the use of more affordable drugs, (5) take into 265
consideration recommendations of a stakeholder council established 266
pursuant to section 11 of this act, and (6) recommend a range of options 267
of prescription drug cost affordability tools to the executive director of 268
the Office of Health Strategy. 269
(c) The board shall consist of five members, each of whom shall have 270
an advanced degree and experience or expertise in health care 271
economics, health services research, pharmacoeconomics, 272
pharmacology or clinical medicine. At least one such member shall have 273
direct experience with consumer advocacy and health equity. The 274
members shall be appointed by and serve at the pleasure of the 275
Governor with the advice and consent of either house of the General 276
Assembly. The Governor shall make all initial appointments not later 277
than January 1, 2025. Any vacancy shall be filled for the remainder of 278
the unexpired term by the Governor. 279
(d) Each member of the board shall serve a term of three years, except 280
as to the terms of the members who are first appointed to the board. 281
Two such members shall serve an initial term of three years, two such 282
members shall serve an initial term of two years and one such member 283 Substitute Bill No. 8
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shall serve an initial term of one year, to be determined by the Governor. 284
The Governor may remove any appointed member of the board for 285
malfeasance in office, failure to regularly attend meetings or any cause 286
that renders the member incapable or unfit to discharge the duties of the 287
member's office. Any such removal is not subject to review. 288
(e) The Governor shall designate one member of the board to serve as 289
the chairperson of the board. Such chairperson shall schedule the first 290
meeting of the board, which shall be held not later than February 1, 2025. 291
(f) The board shall meet not less than four times annually to carry out 292
its purposes as set forth in subsection (b) of this section. A majority of 293
the board shall constitute a quorum. The concurrence of a majority of 294
the board in any matter within its powers and duties is required for any 295
determination made by the board. Any conflict of interest involving a 296
member of the board shall be disclosed at the next board meeting after 297
the conflict is identified. 298
(g) Not later than December 31, 2025, and annually thereafter, the 299
board shall report, in accordance with the provisions of section 11-4a of 300
the general statutes, to the joint standing committees of the General 301
Assembly having cognizance of matters relating to aging, general law, 302
human services, insurance and public health. The report shall include, 303
but need not be limited to: (1) Strategies for identifying and eliminating 304
pricing or business practices that do not support or enhance innovation 305
in drug development, (2) price trends and affordability strategies for 306
any drug identified pursuant to subsection (b) or (c) of section 13 of this 307
act, (3) any recommendations the board may have for legislation needed 308
to make prescription drug products more affordable in the state while 309
supporting and enhancing innovation in drug development, (4) 310
purchasing strategies, cost effectiveness evaluations and the 311
development of new technologies and drugs that increase affordability, 312
and (5) a summary and evaluation of state prescription drug advisory 313
board activities and recommendations. 314
(h) Members of the board may engage in private employment, or in 315 Substitute Bill No. 8
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a profession or business, subject to any applicable laws, rules and 316
regulations of the state regarding official ethics or conflict of interest. As 317
used in this subsection, (1) "conflict of interest" means (A) an association 318
of a board member, including a financial or personal association, that 319
has the potential to bias or appear to bias a board member's decisions in 320
matters related to the board, and (B) any instance in which a board 321
member, a staff member, a contractor of the division on behalf of the 322
board or an immediate family member of a board member has received 323
or could receive (i) a financial benefit of any amount derived from the 324
results or findings of a study or determination that is reached by or for 325
the board, or (ii) a financial benefit from an individual or company that 326
owns or manufacturers a prescription drug, service or item that is being 327
or will be studied by the board; and (2) "financial benefit" means 328
honoraria, fees, stock or any other form of compensation, including 329
increases to the value of existing stock holdings. 330
(i) In carrying out its purposes, the board may: 331
(1) Collect and review publicly available information and 332
information available via private subscriptions regarding prescription 333
drug pricing and business practices of health carriers, health 334
maintenance organizations, managed care organizations, 335
manufacturers, wholesale distributors and pharmacy benefit managers, 336
including, but not limited to, the annual report by pharmacy benefit 337
managers required pursuant to section 38a-479ppp of the general 338
statutes; 339
(2) Identify innovative strategies that may reduce the cost of 340
prescription drugs to consumers, including importation of certain 341
prescription drugs from Canada and other foreign countries and 342
jurisdictions; 343
(3) Identify states with innovative programs to lower prescription 344
drug costs and, if approved by the board, enter into memoranda of 345
understanding with such states to aid in the collection of transparency 346
data for prescription drug products or any other information needed to 347 Substitute Bill No. 8
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establish similar programs in this state; and 348
(4) Receive and accept aid or contributions from any source of money, 349
property, labor or other things of value, to be held, used and applied to 350
carry out the purposes of the board, provided acceptance of such aid or 351
contributions does not present a conflict of interest for any board 352
member or any purpose of the board. 353
Sec. 11. (NEW) (Effective July 1, 2024) (a) There is established a 354
Prescription Drug Affordability Stakeholder Council to advise the 355
Prescription Drug Affordability Board established pursuant to section 356
10 of this act on decisions regarding the affordability of prescription 357
drugs. 358
(b) Members of the council shall serve for three years and shall consist 359
of: 360
(1) Three appointed by the speaker of the House of Representatives, 361
who shall be (A) a representative of a state-wide health care advocacy 362
coalition, (B) a representative of a state-wide advocacy organization for 363
elderly persons, and (C) a representative of a state-wide organization 364
for diverse communities; 365
(2) Three appointed by the president pro tempore of the Senate, who 366
shall be (A) a representative of a labor union, (B) a health services 367
researcher, and (C) a consumer who has experienced barriers to 368
obtaining prescription drugs due to the cost of such drugs; 369
(3) Two appointed by the majority leader of the House of 370
Representatives, who shall be (A) a representative of physicians, and (B) 371
a representative of nurses; 372
(4) Two appointed by the minority leader of the House of 373
Representatives, who shall be (A) a representative of private insurers, 374
and (B) a representative of brand-name drug corporations; 375
(5) Two appointed by the minority leader of the Senate, who shall be 376
(A) a representative of generic drug corporations, and (B) a 377 Substitute Bill No. 8
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representative of an academic institution with expertise in health care 378
costs; 379
(6) Two appointed by the Governor, who shall be (A) a representative 380
of pharmacists, and (B) a representative of pharmacy benefit managers; 381
(7) The Secretary of the Office of Policy and Management, or the 382
secretary's designee; 383
(8) The Commissioner of Social Services, or the commissioner's 384
designee; 385
(9) The Commissioner of Public Health, or the commissioner's 386
designee; 387
(10) The Insurance Commissioner, or the commissioner's designee; 388
(11) The Commissioner of Consumer Protection, or the 389
commissioner's designee; 390
(12) The executive director of the Office of Health Strategy, or the 391
executive director's designee; and 392
(13) The Healthcare Advocate, or the Healthcare Advocate's 393
designee. 394
(c) All initial appointments to the council shall be made not later than 395
November 1, 2024. Any vacancy shall be filled by the appointing 396
authority. 397
(d) The speaker of the House of Representatives and the president 398
pro tempore of the Senate shall select the chairpersons of the council 399
from among the members of the council. Such chairpersons shall 400
schedule the first meeting of the council, which shall be held not later 401
than sixty days after the effective date of this section. 402
(e) The administrative staff of the joint standing committee of the 403
General Assembly having cognizance of matters relating to insurance 404
shall serve as administrative staff of the council. 405 Substitute Bill No. 8
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(f) Not later than September 1, 2025, and annually thereafter, the 406
council shall submit a report to the board, in accordance with the 407
provisions of section 11-4a of the general statutes, on its 408
recommendations concerning prescription drug prices. The council 409
shall also provide recommendations to the board at any time the board 410
requests such recommendations. 411
Sec. 12. (NEW) (Effective July 1, 2024) As used in this section and 412
section 13 of this act: 413
(1) "Biologic" means a drug licensed under 42 USC 262, as amended 414
from time to time; 415
(2) "Biosimilar" means a drug that is highly similar to a biologic and 416
is produced or distributed in accordance with a biologics license 417
application approved under 42 USC 262(k), as amended from time to 418
time; 419
(3) "Board" means the Prescription Drug Affordability Board 420
established pursuant to section 10 of this act; 421
(4) "Brand-name drug" means a drug that is produced or distributed 422
in accordance with an original new drug application approved under 21 423
USC 355, as amended from time to time, but does not include an 424
authorized generic drug as defined in 42 CFR 447.502, as amended from 425
time to time; 426
(5) "FDA breakthrough drug" means a drug granted expedited 427
review by the United States Food and Drug Administration under 21 428
USC 356, as amended from time to time; 429
(6) "Generic drug" means (A) a prescription drug product that is 430
marketed or distributed in accordance with an abbreviated new drug 431
application approved under 21 USC 355, as amended from time to time, 432
(B) an authorized generic drug as defined in 42 CFR 447.502, as 433
amended from time to time, or (C) a drug that entered the market before 434
calendar year 1962 that was not originally marketed under a new 435 Substitute Bill No. 8
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prescription drug product application; 436
(7) "Manufacturer" means an entity that (A) engages in the 437
manufacture of a drug product, or (B) enters into a lease with another 438
manufacturer to market and distribute a prescription drug product 439
under the entity's own name and sets or changes the wholesale 440
acquisition cost of the prescription drug product it manufactures or 441
markets; 442
(8) "Orphan drug" has the same meaning as provided in 21 CFR 316.3, 443
as amended from time to time; and 444
(9) "Prescription drug product" means a brand-name drug, a generic 445
drug, a biologic or biosimilar. 446
Sec. 13. (NEW) (Effective July 1, 2024) (a) To the extent practicable, the 447
Prescription Drug Affordability Board established pursuant to section 448
10 of this act may assess pricing information for prescription drug 449
products by: (1) Entering into a memorandum of understanding with 450
another state to which a manufacturer reports pricing information, (2) 451
assessing spending for the drug in the state, (3) utilizing data and 452
findings, including consumer affordability strategies, developed by 453
another state's board, (4) utilizing data and findings, including cost 454
containment strategies, developed by any other state or federal entity, 455
(5) utilizing the maximum fair price for a prescription drug for persons 456
eligible for Medicare established pursuant to the federal Inflation 457
Reduction Act of 2022, P.L. No. 117-169, as amended from time to time, 458
and (6) assessing any other available pricing information. 459
(b) On and after July 1, 2025, the board shall identify prescription 460
drug products that, as adjusted annually for inflation in accordance with 461
the consumer price index for all urban consumers published by the 462
United States Department of Labor, Bureau of Labor Statistics, are: 463
(1) Brand-name drugs that have a launch wholesale acquisition cost 464
of thirty thousand dollars or more per year or course of treatment; 465 Substitute Bill No. 8
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(2) Brand-name drugs that have a wholesale acquisition cost increase 466
of three thousand dollars or more in any twelve–month period; 467
(3) Biosimilars that have a launch wholesale acquisition cost that is 468
not at least fifteen per cent lower than the referenced brand biologic at 469
the time the biosimilars are launched; and 470
(4) Generic drugs that have: 471
(A) A wholesale acquisition cost of one hundred dollars or more for 472
(i) a thirty-day supply lasting a patient for a period of thirty consecutive 473
days based on the recommended dosage approved for labeling by the 474
United States Food and Drug Administration, (ii) a supply lasting a 475
patient for fewer than thirty days based on the recommended dosage 476
approved for labeling by the United States Food and Drug 477
Administration, or (iii) one unit of the drug if the labeling approved by 478
the United States Food and Drug Administration does not recommend 479
a finite dosage; and 480
(B) A wholesale acquisition cost that increased by two hundred per 481
cent or more during the immediately preceding twelve-month period, 482
as determined by the difference between the resulting wholesale 483
acquisition cost and the average of the wholesale acquisition cost 484
reported over the immediately preceding twelve months. 485
(c) On and after July 1, 2025, the board shall identify any other 486
prescription drug products or pricing practices that may create 487
affordability challenges for the health care system in the state or 488
patients, including, but not limited to, drugs needed to address 489
significant public health priorities. 490
(d) After identifying prescription drug products as required by 491
subsections (b) and (c) of this section, the board may conduct, within 492
available appropriations, a review for any identified prescription drug 493
product or pricing practice if, after (1) seeking input from relevant 494
stakeholders, and (2) considering the average patient cost share of the 495
prescription drug product, the board determines such review is in the 496 Substitute Bill No. 8
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interest of consumers. 497
(e) In conducting a review of prescription drugs, the board shall 498
examine any document and research related to the pricing of the 499
prescription drug product, including, but not limited to, (1) net average 500
price in the state, (2) market competition and context, (3) projected 501
revenue to the manufacturer, (4) the estimated value or cost 502
effectiveness, (5) whether and how the prescription drug product 503
represents an innovative therapy or is likely to improve health or health 504
outcomes for the target consumer, and (6) any rebates, discounts, patient 505
access programs or other cost mitigation strategies relevant to the 506
prescription drug product. As part of its review, the board may also 507
examine the costs or potential costs of FDA breakthrough and orphan 508
drugs. 509
(f) The board shall determine whether use of the prescription drug 510
product, consistent with the labeling approved by the federal Food and 511
Drug Administration or standard medical practice, has led or will lead 512
to affordability challenges for the health care system in the state or high 513
out-of-pocket costs for patients. In determining whether a prescription 514
drug product has led or will lead to an affordability challenge, the board 515
may consider the following factors: 516
(1) The wholesale acquisition cost for the prescription drug product 517
sold in the state; 518
(2) The average monetary price concession, discount or rebate 519
provided or expected to be provided to health plans in the state as 520
reported by manufacturers and health plans, expressed as a percentage 521
of the wholesale acquisition cost for the prescription drug product 522
under review; 523
(3) The total amount of the price concession, discount or rebate the 524
manufacturer provides to each pharmacy benefits manager operating in 525
the state for the prescription drug product under review, as reported by 526
manufacturers and pharmacy benefits managers, expressed as a 527
percentage of the wholesale acquisition costs; 528 Substitute Bill No. 8
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(4) The price at which therapeutic alternatives have been sold in the 529
state; 530
(5) The average monetary concession, discount or rebate the 531
manufacturer provides or is expected to provide to health plan payors 532
and pharmacy benefits managers in the state for therapeutic 533
alternatives; 534
(6) The costs to health plans based on patient access consistent with 535
United States Food and Drug Administration labeled indications and 536
recognized standard medical practice; 537
(7) The impact on patient access resulting from the cost of the 538
prescription drug product relative to health plan benefit design; 539
(8) The current or expected dollar value of drug–specific patient 540
access programs that are supported by the manufacturer; 541
(9) The relative financial impacts to health, medical or social services 542
costs as may be quantified and compared to baseline effects of existing 543
therapeutic alternatives; 544
(10) The average patient copayment or other cost sharing for the 545
prescription drug product in the state; 546
(11) Any information a manufacturer chooses to provide; and 547
(12) Any other factors as determined by the board. 548
(g) If the board finds that the spending on a prescription drug 549
product reviewed under this section has led or will lead to an 550
affordability challenge, the board shall recommend an upper payment 551
limit to the executive director of the Office of Health Strategy and the 552
Insurance Commissioner after considering: (1) The cost of administering 553
the drug, (2) the cost of delivering the drug to patients, and (3) other 554
relevant administrative costs related to the drug. In its 555
recommendations, the board may utilize (A) upper payment limits set 556
by similar boards in other states, provided the board finds that the other 557 Substitute Bill No. 8
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entity's price justification process is at least as rigorous as the process set 558
forth in state law, (B) upper payment limits set by any other state or 559
federal entity, provided the board finds that the other entity's price 560
justification process is at least as rigorous as the process set forth in state 561
law, and (C) the Medicare maximum fair price for a prescription drug. 562
Sec. 14. (NEW) (Effective July 1, 2025) (a) As used in this section and 563
section 15 of this act, (1) "ERISA plan" means an employee welfare 564
benefit plan subject to the Employee Retirement Income Security Act of 565
1974, as amended from time to time; (2) "health benefit plan" has the 566
same meaning as provided in section 38a-472f of the general statutes; (3) 567
"state entity" means any state agency, or any individual employed by or 568
acting on the state's behalf that purchases a prescription drug for an 569
individual with health insurance paid for by the state, including health 570
insurance offered by local, state, or federal agencies or through 571
organizations licensed in the state; and (4) "participating ERISA plan" 572
means an ERISA plan that elects to participate in the requirements of 573
this section. 574
(b) It shall be a violation of this section for a state entity or health 575
benefit plan or participating ERISA plan to purchase drugs with an 576
established upper payment limit to be dispensed or delivered to a 577
consumer in the state, whether directly or through a distributor, for a 578
cost higher than the upper payment limit as determined in subsection 579
(g) of section 13 of this act. Contracts entered into by a state entity, health 580
benefit plan or participating ERISA plan and a third party for the 581
purchase of prescription drugs shall expressly provide that rates paid 582
for drugs may not exceed the upper payment limit. 583
(c) It shall be a violation of this section for a retail pharmacy licensed 584
in this state to purchase for sale or distribution to a person whose health 585
care is provided by a state entity or health benefit plan or participating 586
ERISA plan a drug for a cost that exceeds the upper payment limit as 587
determined in subsection (g) of section 13 of this act. 588
Sec. 15. (NEW) (Effective July 1, 2025) Any savings generated by a state 589 Substitute Bill No. 8
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entity, health benefit plan, or participating ERISA plan that are 590
attributable to the implementation of an upper payment limit 591
established by the Prescription Drug Affordability Board shall be used 592
to reduce health care costs to consumers, prioritizing the reduction of 593
out-of-pocket costs for prescription drugs. Not later than April 1, 2026, 594
and annually thereafter, each state entity, health benefit plan and 595
participating ERISA plan shall submit to the board and to the executive 596
director of the Office of Health Strategy a report describing the savings 597
achieved as a result of implementing upper payment limits and how 598
those savings were used to reduce health care costs to consumers. Not 599
later than July 1, 2026, and annually thereafter, the executive director, in 600
accordance with the provisions of section 11-4a of the general statutes, 601
shall file a report with the joint standing committees of the General 602
Assembly having cognizance of matters relating to appropriations and 603
the budgets of state agencies, general law, human services, insurance 604
and public health. The report shall include savings achieved and the 605
executive director's recommendations concerning additional savings 606
that may be achieved. 607
Sec. 16. (NEW) (Effective July 1, 2025) (a) As used in this section, 608
"manufacturer" means an entity that (1) engages in the manufacture of 609
a drug product, or (2) enters into a lease with another manufacturer to 610
market and distribute a prescription drug product under the entity's 611
own name and sets or changes the wholesale acquisition cost of the 612
prescription drug product it manufactures or markets. Any 613
manufacturer that intends to withdraw from sale or distribution within 614
the state a prescription drug for which the Prescription Drug 615
Affordability Board has established an upper payment limit shall 616
provide a notice of withdrawal in writing at least six months before the 617
date of the intended withdrawal of such prescription drug to the board, 618
the Insurance Commissioner, the Attorney General and any entity in the 619
state with which the manufacturer has a contract for the sale or 620
distribution of the drug. 621
(b) The board shall assess a penalty not to exceed five hundred 622
thousand dollars if the board determines that a manufacturer failed to 623 Substitute Bill No. 8
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provide the notice required by subsection (a) of this section before 624
withdrawing from sale or distribution within the state a prescription 625
drug for which the board has established an upper payment limit as 626
determined in subsection (g) of section 13 of this act. 627
(c) A representative of a manufacturer that reasonably foresees an 628
impending shortage of a prescription drug it sells or distributes in the 629
state shall notify the board not later than thirty days after determining 630
that a shortage of a prescription drug is imminent. 631
Sec. 17. (NEW) (Effective January 1, 2025) (a) As used in this section: 632
(1) "Health benefit plan" has the same meaning as provided in section 633
38a-472f of the general statutes; 634
(2) "Insulin" means an insulin product, including, but not limited to, 635
an insulin pen or vial, that is licensed under 42 USC 262(a) or 42 USC 636
262(k), as amended from time to time; 637
(3) "Eligible insulin" means an insulin product for which at least two 638
licenses have been issued and continues to be marketed pursuant to 639
such licensure; 640
(4) "Net cost" means the cost of an insulin product taking into account 641
rebates or discounts for that specific product, excluding (A) rebates or 642
discounts required by state or federal law, including Medicaid, 643
Medicare and section 340B of the Public Health Service Act, 42 USC 644
256b, as amended from time to time, and (B) rebates or discounts related 645
to portfolio agreements that relate to purchase of multiple insulin 646
products or other drugs; 647
(5) "State entity" means any state agency, or any individual employed 648
by or acting on behalf of the state, that purchases a prescription drug for 649
an individual with health insurance paid for by the state, including 650
health insurance offered by local, state, or federal agencies or through 651
organizations licensed in the state; and 652
(6) "Wholesale acquisition cost" means the price of a medication set 653 Substitute Bill No. 8
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by a pharmaceutical manufacturer in the United States when selling to 654
a wholesaler. 655
(b) A state entity and health benefit plan shall, except as otherwise 656
required in any collective bargaining agreement affecting the state 657
employee health plan established pursuant to section 5-259 of the 658
general statutes, make available in a preferred tier with no copayment 659
or out-of-pocket cost an eligible insulin product at the lowest wholesale 660
acquisition cost to a beneficiary. Notwithstanding the provisions of this 661
section, if a state entity or health plan determines that another eligible 662
insulin product has a lower net cost than the lowest wholesale 663
acquisition cost, such entity or health plan may offer that product with 664
no out-of-pocket payment to a beneficiary of such state entity or health 665
benefit plan. Nothing in this section shall prevent such entity or health 666
benefit plan from covering more than one eligible insulin product in a 667
preferred tier with no copayment or out-of-pocket cost to a beneficiary 668
of such entity or health benefit plan. 669
Sec. 18. Section 38a-492d of the general statutes is amended by adding 670
subsection (e) as follows (Effective January 1, 2025): 671
(NEW) (e) Notwithstanding the provisions of subsection (c) of this 672
section, on and after January 1, 2025, any policy described in subsection 673
(b) of this section shall make available in a preferred tier with no 674
copayment or out-of-pocket cost an eligible insulin product at the lowest 675
wholesale acquisition cost in accordance with section 17 of this act. 676
Sec. 19. Section 38a-518d of the general statutes is amended by adding 677
subsection (e) as follows (Effective January 1, 2025): 678
(NEW) (e) Notwithstanding the provisions of subsection (c) of this 679
section, on and after January 1, 2025, any policy described in subsection 680
(b) of this section shall make available in a preferred tier with no 681
copayment or out-of-pocket cost an eligible insulin product at the lowest 682
wholesale acquisition cost in accordance with section 17 of this act. 683
Sec. 20. (NEW) (Effective July 1, 2024) (a) As used in this section: 684 Substitute Bill No. 8
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(1) "Eligible drug" means an injectable drug product approved under 685
Section 505(j) or 505(b)(2) of the federal Food, Drug and Cosmetic Act, 686
as amended from time to time, that is on the drug shortage list, or has 687
been on such list during the prior five-year period, established under 688
Section 506E of the federal Food, Drug and Cosmetic Act, 21 USC 356e, 689
as amended from time to time, or which has otherwise been identified 690
as being at risk of shortage; 691
(2) "Drug purchasing agency" means the Departments of Correction, 692
Social Services and Mental Health and Addiction Services; 693
(3) "Long-term purchase contract" means an agreement of at least two 694
years' duration that defines price and volume commitments; and 695
(4) "Hospital" means a hospital licensed pursuant to chapter 368v of 696
the general statutes. 697
(b) Any hospital or drug purchasing agency shall have a drug 698
shortage prevention strategy covering at least forty eligible drugs, 699
corresponding to at least one-third of the hospital's or agency's expected 700
utilization of each eligible drug. The hospital or agency shall ensure that 701
any long-term purchase contract for prescription drugs requires the 702
entity contracting with the hospital or agency to: 703
(1) Hold physical reserve inventory in order to buffer supply 704
disruption or demand surge equal to two quarters of contract volume, 705
unless the drug is in shortage or otherwise subject to a supply 706
disruption; 707
(2) Have a competent quality control unit and have in place processes 708
to evaluate supplier quality; 709
(3) Have a process to ensure that critical quality attributes have been 710
met and documentation of good manufacturing practices is complete; 711
and 712
(4) Participate, in accordance with federal law, in the program 713
administered under Section 340B of the Public Health Service Act, 42 714 Substitute Bill No. 8
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USC 256b, as amended from time to time. 715
(c) Not later than January 1, 2025, and annually thereafter, a hospital 716
shall file a report with the Commissioner of Public Health documenting 717
compliance with the provisions of this section. Not later than February 718
1, 2025, and annually thereafter, the Commissioners of Correction, 719
Mental Health and Addiction Services, Social Services and Public 720
Health shall each file separate reports on compliance of hospitals, drug 721
purchasing agencies and their contractors, as applicable, with the 722
executive director of the Office of Health Strategy. 723
(d) The executive director of the Office of Health Strategy shall, not 724
later than April 1, 2025, and annually thereafter, file a comprehensive 725
report, in accordance with the provisions of section 11-4a of the general 726
statutes, on compliance of hospitals, drug purchasing agencies and their 727
contractors with the provisions of this section with the joint standing 728
committees of the General Assembly having cognizance of matters 729
relating to the judiciary, general law, human services and public health. 730
Sec. 21. (NEW) (Effective from passage) As used in this section and 731
section 22 of this act: 732
(1) "340B drug" means a drug that (A) is a covered outpatient drug 733
within the meaning of 42 USC 256b; (B) has been subject to any offer for 734
reduced prices by a manufacturer under 42 USC 256b(a)(1); and (C) is 735
purchased by a covered entity. "340B drug" includes a drug that would 736
have been purchased but for the restriction or limitation described in 737
subsection (a) of section 22 of this act; 738
(2) "Biologic" has the same meaning as provided in section 21a-70d of 739
the general statutes; 740
(3) "Covered entity" has the same meaning as provided in Section 741
340B of the Public Health Service Act, 42 USC 256b, as amended from 742
time to time; 743
(4) "Manufacturer" has the same meaning as provided in section 21a-744 Substitute Bill No. 8
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70 of the general statutes, except that such definition shall include 745
manufacturers of biologics; 746
(5) "Package" has the same meaning as provided in 21 USC 747
360eee(11)(A); 748
(6) "Pharmacy" has the same meaning as provided in section 20-571 749
of the general statutes; 750
(7) "Third-party logistics provider" has the same meaning as 751
provided in section 20-571 of the general statutes; and 752
(8) "Wholesaler" or "distributor" has the same meaning as provided 753
in section 21a-70 of the general statutes. 754
Sec. 22. (NEW) (Effective from passage) (a) A manufacturer, third-party 755
logistics provider, wholesaler or distributor, or an agent or affiliate of 756
such manufacturer, third-party logistics provider, wholesaler or 757
distributor, shall not, either directly or indirectly: 758
(1) Deny, restrict, prohibit, discriminate against or otherwise limit the 759
acquisition of a 340B drug by, or delivery of a 340B drug to, a pharmacy 760
that is under contract with, or otherwise authorized by, a covered entity 761
to receive 340B drugs on behalf of the covered entity unless such receipt 762
is prohibited by the United States Department of Health and Human 763
Services; or 764
(2) Require a covered entity, or a pharmacy that is under contract 765
with a covered entity, to submit any claims or utilization data as a 766
condition for allowing the acquisition of a 340B drug by, or delivery of 767
a 340B drug to, a covered entity, or a pharmacy that is under contract 768
with a covered entity, unless the claims or utilization data sharing is 769
required by the United States Department of Health and Human 770
Services. 771
(b) (1) On and after July 1, 2024, if the executive director of the Office 772
of Health Strategy receives information and has a reasonable belief, after 773
evaluating such information, that any manufacturer, third-party 774 Substitute Bill No. 8
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logistics provider, wholesaler or distributor, or an agent or affiliate of 775
such manufacturer, third-party logistics provider, wholesaler or 776
distributor, has acted in violation of any provision of this section, or rule 777
or regulation adopted thereunder, such manufacturer, third-party 778
logistics provider, wholesaler or distributor, or an agent or affiliate of 779
such manufacturer, third-party logistics provider, wholesaler or 780
distributor, shall be subject to a civil penalty of up to fifty thousand 781
dollars. The executive director may issue a notice of violation and civil 782
penalty by first-class mail or personal service. Such notice shall include: 783
(A) A reference to the section of the general statutes, rule or section of 784
the regulations of Connecticut state agencies believed or alleged to have 785
been violated; (B) a short and plain language statement of the matters 786
asserted or charged; (C) a description of the activity to cease; (D) a 787
statement of the amount of the civil penalty or penalties that may be 788
imposed; (E) a statement concerning the right to a hearing; and (F) a 789
statement that such manufacturer, third-party logistics provider, 790
wholesaler or distributor, or an agent or affiliate of such manufacturer, 791
third-party logistics provider, wholesaler or distributor, may, not later 792
than ten business days after receipt of such notice, make a request for a 793
hearing on the matters asserted. 794
(2) The manufacturer, third-party logistics provider, wholesaler or 795
distributor, or an agent or affiliate of such manufacturer, third-party 796
logistics provider, wholesaler or distributor, to whom such notice is 797
provided pursuant to subparagraph (A) of subdivision (1) of this 798
subsection may, not later than ten business days after receipt of such 799
notice, make written application to the Office of Health Strategy to 800
request a hearing to demonstrate that such violation did not occur. The 801
failure to make a timely request for a hearing shall result in the issuance 802
of a cease and desist order or imposition of a civil penalty by the office. 803
All hearings held under this subsection shall be conducted in 804
accordance with the provisions of chapter 54 of the general statutes. 805
(3) Following any hearing before the Office of Health Strategy 806
pursuant to subdivision (2) of this subsection, if the office finds, by a 807
preponderance of the evidence, that any manufacturer, third-party 808 Substitute Bill No. 8
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logistics provider, wholesaler or distributor, or an agent or affiliate of 809
such manufacturer, third-party logistics provider, wholesaler or 810
distributor, violated or is violating any provision of this subsection, any 811
rule or regulation adopted thereunder or any order issued by the office, 812
the office shall issue a final cease and desist order in addition to any civil 813
penalty the office imposes. 814
(c) Nothing in this section shall be construed or applied to be in 815
conflict with or less restrictive than: 816
(1) Applicable federal law and related regulations, including 21 USC 817
355-1, as amended from time to time; or 818
(2) Other laws of this state to the extent such laws are compatible with 819
applicable federal law. 820
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2024 New section
Sec. 2 July 1, 2024 New section
Sec. 3 July 1, 2024 New section
Sec. 4 July 1, 2024 New section
Sec. 5 July 1, 2024 New section
Sec. 6 July 1, 2024 New section
Sec. 7 July 1, 2024 New section
Sec. 8 July 1, 2024 New section
Sec. 9 July 1, 2024 New section
Sec. 10 July 1, 2024 New section
Sec. 11 July 1, 2024 New section
Sec. 12 July 1, 2024 New section
Sec. 13 July 1, 2024 New section
Sec. 14 July 1, 2025 New section
Sec. 15 July 1, 2025 New section
Sec. 16 July 1, 2025 New section
Sec. 17 January 1, 2025 New section
Sec. 18 January 1, 2025 38a-492d(e)
Sec. 19 January 1, 2025 38a-518d(e)
Sec. 20 July 1, 2024 New section Substitute Bill No. 8
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Sec. 21 from passage New section
Sec. 22 from passage New section
HS Joint Favorable Subst.
JUD Joint Favorable