Session of 2025
SENATE BILL No. 212
By Senator Sykes
2-5
AN ACT concerning health and healthcare; enacting the prescription drug
cost and affordability review act; establishing the prescription drugs
pricing board and prescription drug affordability stakeholder council to
review the cost of prescription medications and establish upper
payment limits for certain prescription drug products.
Be it enacted by the Legislature of the State of Kansas:
Section 1. This act shall be known and may be cited as the
prescription drug cost and affordability review act.
Sec. 2. As used in sections 1 through 8, and amendments thereto:
(a) "340B-covered entity" means an entity that is participating in the
federal 340B drug pricing program authorized by 42 U.S.C. § 256b,
including such entity's pharmacy or pharmacies, or any pharmacy or
pharmacies contracted for the purpose of dispensing drugs purchased
through such program.
(b) "Biologic" means a drug that is produced or distributed in
accordance with a biologics license application approved by the United
States food and drug administration.
(c) "Biosimilar" means a drug that is produced or distributed in
accordance with a biologics license application approved under 42 U.S.C.
§ 262(k).
(d) "Board" means the prescription drug affordability board created in
section 3, and amendments thereto.
(e) "Brand name drug" means a drug other than an authorized generic
drug that is produced or distributed in accordance with an original new
drug application approved under 21 U.S.C. § 355.
(f) "Commissioner" means the commissioner of insurance.
(g) "Consumer price index" means the United States consumer price
index for all urban consumers as defined and reported by the United States
department of labor, bureau of labor statistics.
(h) "Council" means the prescription drug affordability stakeholder
council created in section 4, and amendments thereto.
(i) "Department" means the Kansas insurance department.
(j) "Fund" means the prescription drug affordability fund created in
section 7, and amendments thereto.
(k) "Generic drug" means any of the following:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36 SB 212 2
(1) A retail drug that is marketed or distributed in accordance with an
abbreviated new drug application approved under 21 U.S.C. § 355;
(2) an authorized generic drug as such term is defined in 42 C.F.R.
447.502; or
(3) a drug that entered the market before 1962 that was not originally
marketed under a new drug application.
(l) "Health insurer" means the same as defined in K.S.A. 40-4602,
and amendments thereto.
(m) "Manufacturer" means the same as defined in K.S.A. 65-1626,
and amendments thereto;
(n) "Person" means an individual, corporation or other legal entity.
(o) "Pharmacy" means the same as defined in K.S.A. 65-1626, and
amendments thereto.
(p) "Prescription drug product" means a brand name drug, a generic
drug, a biologic or a biosimilar.
(q) "Prescription drug product purchaser" means an entity that
purchases and takes ownership of a prescription drug product for resale or
providing to patients.
(r) "Rule" means a rule and regulation adopted by the board.
(s) "Third-party payor" means a payor that reimburses a pharmacy for
drugs or services, including a pharmacy benefits manager. "Third-party
payor" does not include the Kansas program of medical assistance under
K.S.A. 39-709, and amendments thereto, or a managed care organization
providing state medicaid or children's health insurance program services
under the Kansas medical assistance or the state healthcare benefits
program.
(t) "Wholesale acquisition cost" means such term as defined in 42
U.S.C. § 1395w-3a(c)(6)(B).
Sec. 3. (a) There is hereby established the prescription drug
affordability board as created as an autonomous entity within the
department.
(b) (1) The board shall consists of five members, which shall be
appointed by the governor. The members of the board shall include
individuals who have expertise in healthcare economics, health policy,
health equity and clinical medicine.
(2) The governor shall not appoint an individual to the board if the
individual:
(A) Is employed by, a consultant to or a board member of a
manufacturer or a trade association for a manufacturer;
(B) has a personal or financial interest that has the potential to bias or
has the appearance of biasing the individual's decision in matters related to
the board or in conducting the board's activities; or
(C) is a lobbyist who is registered in this state.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 SB 212 3
(3) An individual who is appointed to the board shall not register as a
lobbyist in this state for a period of five years after the individual's term on
the board expires.
(4) The governor shall appoint two of the initial members of the
board to one-year terms and three of the initial members to two-year terms.
After the initial appointments, the term of a member of the board is four
years or until a successor is appointed, whichever is later.
(5) If a vacancy occurs on the board, the governor shall appoint an
individual to fill the vacancy for the remaining term in the same manner as
the original appointment.
(6) The governor may remove a member of the board for
incompetence, malfeasance, misfeasance or nonfeasance in office, or any
other good cause.
(c) (1) The governor shall call the first meeting of the board. At the
first meeting, the board shall elect from among its members a chairperson
and other officers as such board considers necessary or appropriate. After
the first meeting, the board shall meet at least quarterly or more frequently
at the call of the chairperson or if requested by a quorum of its members.
(2) A majority of the members of the board shall constitute a quorum
for transacting business. Except as otherwise provided in this subsection, a
majority of the members present and serving is required for official action
of the board.
(d) Except as otherwise provided in this subsection, a writing that is
prepared, owned, used, in the possession of or retained by the board in
performing an official function is subject to the Kansas open records act. A
writing containing a trade secret or proprietary information shall be
confidential and privileged and not be subject to the provisions of the
Kansas open records act as provided by K.S.A. 45-215 et seq., and
amendments thereto. The provisions of this subsection shall expire on July
1, 2030, unless the legislature reviews and reenacts this provision pursuant
to K.S.A. 45-229, and amendments thereto, prior to July 1, 2030.
(e) The salaries and other expenses incurred by members of the board
shall be subject to appropriations.
(f) As used in this section, "health equity" means attaining the highest
level of health for all individuals, in which an individual has a fair and just
opportunity to attain such individual's optimal health regardless of race,
ethnicity, disability, sexual orientation, gender identity, socioeconomic
status, geography, preferred language or other factor that affects access to
healthcare and health outcomes.
Sec. 4. (a) There is hereby established the prescription drug
affordability stakeholder council within the department.
(1) Subject to paragraph 2, the council shall consist of the following
21 members:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 SB 212 4
(A) Seven members appointed by the governor as follows:
(i) One individual representing manufacturers of brand name drugs;
(ii) one individual representing manufacturers of generic drugs;
(iii) one individual representing employers;
(iv) one individual representing pharmacy benefit managers;
(v) one individual representing pharmacists;
(vi) one individual representing a mutual insurance company. The
mutual insurance company under this subparagraph shall not be an entity
that, directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the managed care
organization; and
(vii) one member of the public;
(B) seven members appointed by the governor from a list of
nominees submitted by the speaker of the house of representatives. The list
of nominees shall include individuals who represent the following:
(i) A statewide organization that advocates for senior citizens;
(ii) a statewide organization that advocates for healthcare;
(iii) a statewide organization that advocates for diversity within
communities;
(iv) a labor union;
(v) researchers who specialize in prescription drug products; and
(vi) the public; and
(C) seven members appointed by the governor from a list of
nominees submitted by the senate majority leader. The list of nominees
shall include individuals who represent each of the following:
(i) Physicians;
(ii) nurses;
(iii) hospitals;
(iv) managed care organizations. The managed care organization
under this clause shall not be an entity that, directly or indirectly, through
one or more intermediaries, controls, is controlled by or is under common
control with the mutual insurance company under paragraph (1)(A)(vi);
(v) clinical researchers; and
(vi) the public.
(2) The governor shall ensure that the members appointed to the
council have knowledge in one or more of the following areas:
(A) The pharmaceutical business model;
(B) supply chain business models;
(C) the practice of medicine or clinical training;
(D) consumer or patient perspectives;
(E) healthcare costs trends; and
(F) clinical and health services research.
(b) The governor shall appoint seven of the initial members of the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 SB 212 5
council to one-year-terms, seven of the initial members to two-year terms
and seven of the initial members to three year terms. After the initial
appointments, the term of a member of the council is three years or until a
successor is appointed, whichever is later.
(1) If a vacancy occurs on the council, the governor shall appoint an
individual to fill the vacancy for the remaining term in the same manner as
the original appointment.
(2) The governor may remove a member of the council for
incompetence, malfeasance, misfeasance or nonfeasance in office or any
other good cause.
(3) At the first meeting of the council, the council shall elect from
among its members a chairperson and other officers as such council
considers necessary or appropriate. After the first meeting, the council
shall meet at least quarterly or more frequently at the call of the
chairperson or if requested by a quorum of its members.
(4) A majority of the members of the council shall constitute a
quorum for transacting business. A majority of the members present and
serving is required for official action of the council.
(c) Except as otherwise provided in this subsection, a writing that is
prepared, owned, used, in the possession of, or retained by the council in
performing an official function is subject to the Kansas open records act. A
writing containing a trade secret or proprietary information shall be
confidential and privileged and not be subject to the provisions of the
Kansas open records act as provided by K.S.A. 45-215 et seq., and
amendments thereto. The provisions of this subsection shall expire on July
1, 2030, unless the legislature reviews and reenacts this provision pursuant
to K.S.A. 45-229, and amendments thereto, prior to July 1, 2030.
(d) Members of the council attending meetings authorized by the
council shall be paid amounts as provided in K.S.A. 75-3223(3), and
amendments thereto.
(e) The council shall assist the board in making decisions required
under this act.
Sec. 5. (a) Beginning on January 1, 2027, subject to subsection (b),
the board, in
consultation with the council, shall select one or more prescription drug
products based on any of the following criteria:
(1) The prescription drug product is a brand name drug or a biologic
that, as adjusted annually for inflation in accordance with the consumer
price index, has a wholesale acquisition cost of $60,000 or more per year
or per course of treatment has a wholesale acquisition cost increase of
$3,000 or more in any 12-month period;
(2) the prescription drug product is a biosimilar that has a wholesale
acquisition cost that is not at least 15% lower than the referenced brand
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 SB 212 6
biologic; or
(3) the prescription drug product is a generic drug that, as adjusted
annually for inflation in accordance with the consumer price index, has a
wholesale acquisition cost that:
(A) Is $100 or more for any of the following:
(i) A 30-day supply that lasts a patient for a period of 30 consecutive
days based on the recommended dosage approved for labeling by the
United States food and drug administration;
(ii) a supply that lasts a patient for less than 30 days based on the
recommended dosage approved for labeling by the United States food and
drug administration; and
(iii) one unit of the drug if the labeling approved by the United States
food and drug administration does not recommend a finite dosage; and
(B) increased by 200% or more during the immediately preceding 12-
month period, as determined by the difference between the resulting
wholesale acquisition cost and the average wholesale acquisition cost
reported over the immediately preceding 12 months; or
(4) the prescription drug product is a prescription drug product that
may create affordability challenges for healthcare systems in this state and
patients, including, but not limited to, a prescription drug product needed
to address a public health emergency.
(b) In selecting one or more prescription drug products under
subsection (a), the board shall not be required to identify each prescription
drug product that meets the criteria described in subsection (a).
(1) The board shall determine whether to conduct a cost and
affordability review for each prescription drug product that is selected
under subsection (a). In making a determination under this subsection, the
board shall consider input from the council and the average patient cost
share for each prescription drug product.
(2) If the board conducts a cost and affordability review of a
prescription drug product, the board may consider when conducting the
review any document or research related to the manufacturer's selection of
the introductory price or price increase of the prescription drug product,
including life cycle management, net average price in this state, market
competition, projected revenue and, subject to subsection (e), the
estimated cost-effectiveness of the prescription drug product. In its review,
the board shall determine whether the use of a prescription drug product
that is fully consistent with the labeling approved by the United States
food and drug administration or standard medical practice for the
prescription drug product has led or will lead to affordability challenges to
healthcare systems in this state or high out-of-pocket costs for patients in
this state. In making its determination under this subsection, the board
shall consider any information that a manufacturer chooses to provide to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 SB 212 7
the board and all of the following factors, to the extent practicable:
(A) The wholesale acquisition cost for the prescription drug product
sold in this state;
(B) the average monetary price concession, discount or rebate that the
manufacturer provides or is expected to provide to health insurers and
pharmacy benefit managers in this state, expressed as a percent of the
wholesale acquisition cost for the prescription drug product under review;
(C) the price at which therapeutic alternatives for the prescription
drug product have been sold in this state;
(D) the average monetary concession, discount or rebate that another
manufacturer provides or is expected to provide to health insurers and
pharmacy benefit managers in this state for therapeutic alternatives;
(E) the cost to health insurers based on patient access consistent with
United States food and drug administration labeled indications or
recognized standard medical practice;
(F) the impact on patient access resulting from the cost of the
prescription drug product relative to insurance benefit design;
(G) the current or expected dollar value of drug-specific patient
access programs that are supported by the manufacturer;
(H) the relative financial impact to health, medical or social service
costs as can be quantified and compared to baseline effects of existing
therapeutic alternatives;
(I) the average patient copay or other cost-sharing measures for the
prescription drug product in this state; and
(J) any other factor established by the board.
(c) If the board determines that spending on a prescription drug
product reviewed under this section has led or will lead to affordability
challenges to healthcare systems in this state or high out-of-pocket costs
for patients in this state, the board may, subject to subsection (d), adopt
rules and regulations establishing an upper payment limit for the
prescription drug product. In establishing an upper payment limit under
this subsection, the board shall consider all of the following:
(1) Relevant administrative costs related to supplying or stocking the
prescription drug product; and
(2) the impact of an upper payment limit for the prescription drug
product on 340-B program entities.
(d) An upper payment limit established under this section shall not
include professional dispensing fees.
(e) If the board considers the estimated cost-effectiveness of a
prescription drug product under this section, the board:
(1) Shall not use a cost-per-quality adjusted life year, or a similar
measure, to identify a subpopulation for which a prescription drug product
would be less cost-effective due to severity of illness, age or preexisting
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 SB 212 8
disability; and
(2) if the board uses a cost-effectiveness analysis for a prescription drug
product that extends an individual's life, the board shall use a cost-
effectiveness analysis that weighs the value of all additional lifetime
gained equally for any individual, regardless of the severity of illness, age
or preexisting disability.
(f) An upper payment limit established under this section shall take
effect on the date adopted by the board by rule and regulation, except that
such date shall not be sooner than six months after the date that the upper
payment limit is established.
Sec. 6. (a) Except as otherwise provided in subsection (b), if the
board establishes an upper payment limit under section 5, and amendments
thereto, for a prescription drug product intended for use by individuals in
this state, beginning on the effective date of the upper payment limit, a
prescription drug product purchaser or third-party payer shall not
purchase, bill or reimburse for the prescription drug product in an amount
that exceeds the upper payment limit, regardless of whether the
prescription drug product is dispensed or distributed in person, by mail or
by other means.
(b) A prescription drug product purchaser or third-party payer shall
not reimburse a pharmacy for a prescription drug product in an amount
that is less than an upper payment limit established under section 5, and
amendments thereto, for the prescription drug product.
(c) The attorney general may investigate a violation of this section
and may commence a civil action against a person for appropriate relief,
including, but not limited to, injunctive relief for a violation of this section.
(d) This section shall not prohibit any other sanction against a
prescription drug product purchaser or third-party payor as provided by
law.
(e) A person aggrieved by a decision of the board under this act may
request an appeal within 30 days. A hearing and appeal is subject to the
Kansas administrative procedure act.
(f) The board may adopt rules and regulations to implement and
administer this act, and the board may enter into contracts with third
parties to assist the board in carrying out its duties under this act.
Sec. 7. There is hereby established in the state treasury the
prescription drug affordability fund, which shall be administered by the
commissioner. All expenditures from the prescription drug affordability
fund shall be to fund the board and for costs expended by the department
to implement and administer the prescription drug cost and affordability
review act. All expenditures from the prescription drug affordability fund
shall be made in accordance with appropriation acts upon warrants of the
director of accounts and reports issued pursuant to vouchers approved by
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43 SB 212 9
the commissioner or the designee of the commissioner. All moneys
received by the board for the prescription drug cost and affordability
review act shall be deposited in the state treasury in accordance with the
provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of
each such remittance, the state treasurer shall deposit the entire amount in
the state treasury to the credit of the prescription drug affordability fund.
Sec. 8. (a) Beginning in 2026, on or before December 31 of each
year, the board shall submit a written report to the legislature that includes
all of the following information:
(1) Price trends for prescription drug products;
(2) the number of prescription drug products that were subject to
board review, including the results of the review and the number and
disposition of appeals of board decisions; and
(3) any recommendations that the board may have on further
legislation to make prescription drug products more affordable in this
state.
(b) Prior to the first date of the regular legislative session of 2027, the
board shall conduct a one-time study on all of the following and report its
findings to the legislature:
(1) The prices of generic drugs on a year-to-year basis;
(2) the degree to which the prices of generic drugs affect yearly
insurance premium charges;
(3) annual changes in insurance cost-sharing for generic drugs;
(4) the potential for and history of drug shortages;
(5) the degree to which the prices of generic drugs affect yearly
medical assistance program spending in this state;
(6) the impact of an upper payment limit on 340-B program entities;
and
(7) any other issue that the board considers relevant.
Sec. 9. This act shall take effect and be in force from and after its
publication in the statute book.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31