HOUSE . . . . . . . No. 4891
The Commonwealth of Massachusetts
______________________________________
HOUSE OF REPRESENTATIVES, July 22, 2024.
The committee on Ways and Means, to whom was referred the Senate
Bill relative to pharmaceutical access, costs and transparency (Senate, No.
2520), reports recommending that the same ought to pass with
amendments striking all after the enacting clause and inserting in place
thereof the text contained in House document numbered 4891; and by
striking out the title and inserting in place thereof the following title: “ An
Act promoting access and affordability of prescription drugs.”.
For the committee,
AARON MICHLEWITZ. 1 of 58
HOUSE . . . . . . . . . . . . . . . No. 4891
Text of amendments, recommended by the committee on Ways and Means, to the Senate Bill
relative to pharmaceutical access, costs and transparency (Senate, No. 2520). July 22, 2024.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
By striking out all after the enacting clause and inserting in place thereof the following:–
1 SECTION 1. Section 1 of chapter 6D, as appearing in the 2022 Official Edition, is hereby
2amended by striking out the definition of “Payer” and inserting in place thereof the following
3definition:-
4 “Payer”, any entity, other than an individual, that pays providers for the provision of
5health care services, including self-insured plans to the extent allowed under the federal
6Employee Retirement Income Security Act of 1974.
7 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
8amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
9 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
10preparation, propagation, compounding, conversion or processing of prescription drugs, directly
11or indirectly, by extraction from substances of natural origin, independently by means of
12chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
13repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
14“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed 2 of 58
15under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
16chapter 112.
17 “Pharmacy benefit manager”, as defined in section 1 of chapter 176Y.
18 SECTION 3. Said chapter 6D is hereby further amended by inserting after section 3 the
19following section:-
20 Section 3A. (a) There is hereby established within the commission an office for
21pharmaceutical policy and analysis, hereinafter referred to as the office. The office shall: (i)
22analyze pharmaceutical spending data and information collected by the commission under this
23chapter and other agencies of the commonwealth pursuant to subsection (b); (ii) produce reports
24and analyses of issues related to the access, affordability of and spending on pharmaceutical
25drugs in the commonwealth pursuant to subsection (c); (iii) analyze records related to
26pharmaceutical pricing disclosed to the commission pursuant to section 8A and assist the
27commission in identifying proposed supplemental rebates for eligible drugs under said section
288A; and (iv) advise the general court and state agencies on matters related to pharmaceutical
29drug policy.
30 (b) The office shall analyze pharmaceutical spending data collected by the commission
31and other agencies of the commonwealth, including pharmaceutical spending data collected by
32the center under sections 8 to 10B, inclusive, of chapter 12C, and pharmaceutical spending data
33available through publicly available sources. As part of its analysis, the office shall conduct an
34annual survey of payers on pharmaceutical access and plan design, including tiering, cost-sharing
35and other utilization management techniques employed by payers; provided, however, that any 3 of 58
36confidential data shall not be a public record and shall be exempt from disclosure pursuant to
37clause Twenty-sixth of section 7 of chapter 4 and section 10 of chapter 66.
38 (c)(1) The office shall produce an annual report on issues related to access, affordability
39and spending on pharmaceutical drugs in the commonwealth and other reports as the office may
40produce from time to time. The annual report shall address trends and underlying factors for
41pharmaceutical drug spending, including an analysis of: (i) prices and utilization; (ii) drugs or
42categories of drugs with the highest impact on spending; (iii) trends in patient out-of-pocket
43spending; and (iv) access and affordability issues for patients with rare diseases and chronic
44diseases; provided, that any analysis of a drug prescribed to treat a rare disease, or that is
45otherwise designated as a first-in-class drug, shall be conducted pursuant to paragraph (3). The
46report shall include any recommendations for strategies to mitigate pharmaceutical spending
47growth, promote affordability and enhance pharmaceutical access.
48 (2) The annual report shall be based on factors, including, but not limited to: (i) drug
49pricing; (ii) the impact of aggregate manufacturer rebates, discounts and other price concessions
50on net drug pricing; (iii) patient cost-sharing such as deductibles, coinsurance, copayments or
51similar charges paid by patients for drugs; (iv) the impacts of aggregate rebates, discounts and
52other price concessions on such cost-sharing; and (v) the impacts of utilization management
53techniques on pharmaceutical access employed by payers, including tiering, prior authorization
54and step therapy. The annual report shall be informed by: (A) the office’s analysis of information
55provided at the annual cost trends hearing by providers, provider organizations and payers; (B)
56data collected by the center under sections 8 to 10B, inclusive, of chapter 12C; and (C) any other
57information available to the commission that is necessary to fulfill its duties under this section, as
58further defined in regulations promulgated by the commission. 4 of 58
59 (3) The office shall consult with the rare disease advisory council established pursuant to
60section 241 of chapter 111, and other stakeholders as determined by the office, for any analysis
61the office performs of a drug that is prescribed to treat a rare disease or is otherwise designated
62as a first-in-class drug by the United States Food and Drug Administration’s Center for Drug
63Evaluation and Research. Such analysis shall include:
64 (i) the disease treated by the drug;
65 (ii) the severity of disease treated by the drug;
66 (iii) the unmet medical need associated with the disease treated by the drug;
67 (iv) the impact of particular coverage, cost-sharing, tiering, utilization management, prior
68authorization, medication therapy management or other utilization management policies on
69access to the drug and on patients’ adherence to the treatment regimen prescribed or otherwise
70recommended by their health care provider;
71 (v) an assessment of the benefits and risks of the drug for patients;
72 (vi) whether patients who need treatment from or a consultation with a rare disease
73specialist or a specialist in the disease being treated by the first-in-class drug have adequate
74access and, if not, what factors are causing the limited access; and
75 (vii) the demographic and the clinical description of patient populations.
76 (4) Annually, not later than September 1, the report shall be submitted to the chairs of the
77house and senate committees on ways and means and the chairs of the joint committee on health
78care financing and shall be published and made available to the public. 5 of 58
79 (d) The office shall analyze records related to pharmaceutical pricing disclosed to the
80commission pursuant to section 8A and assist the commission in identifying proposed
81supplemental rebates for eligible drugs under said section 8A. The office’s analysis of such
82records shall consider: (i) the effectiveness of the drug in treating the conditions for which it is
83prescribed; (ii) improvements to a patient’s health, quality of life or overall health outcomes; and
84(iii) the likelihood that use of the drug will reduce the need for other medical care, including
85hospitalization.
86 (e) The office may consult with external experts or other third-party entities when the
87office lacks the specific scientific, medical or technical expertise necessary for the performance
88of its responsibilities under this section; provided, however, that the commission shall disclose
89when such external expert or third-party entity contributes to its analysis and reporting and the
90identity of such external expert or third-party entity.
91 SECTION 4. Section 4 of said chapter 6D, as appearing in the 2022 Official Edition, is
92hereby amended by striking out, in line 8, the word “manufacturers” and inserting in place
93thereof the following words:- manufacturing companies, pharmacy benefit managers.
94 SECTION 5. Said chapter 6D is hereby further amended by striking out section 6, as so
95appearing, and inserting in place thereof the following section:-
96 Section 6. (a) For the purposes of this section, “non-hospital provider organization” shall
97mean a provider organization required to register under section 11 that is: (i) a non-hospital-
98based physician practice with not less than $500,000,000 in annual gross patient service revenue;
99(ii) a clinical laboratory; (iii) an imaging facility; or (iv) a network of affiliated urgent care
100centers. 6 of 58
101 (b) Each acute hospital, ambulatory surgical center, non-hospital provider organization,
102pharmaceutical manufacturing company and pharmacy benefit manager shall pay to the
103commonwealth an amount for the estimated expenses of the commission.
104 (c) The assessed amount for hospitals, ambulatory surgical centers and non-hospital
105provider organizations shall be not less than 30 per cent nor more than 40 per cent of the amount
106appropriated by the general court for the expenses of the commission minus amounts collected
107from: (i) filing fees; (ii) fees and charges generated by the commission; and (iii) federal matching
108revenues received for these expenses or received retroactively for expenses of predecessor
109agencies; provided, that non-hospital provider organizations shall be assessed not less than 3 per
110cent nor more than 8 per cent of the assessed amount for hospitals, ambulatory surgical centers
111and non-hospital provider organizations. Each acute hospital, ambulatory surgical center and
112non-hospital provider organization shall pay such assessed amount multiplied by the ratio of the
113hospital’s, ambulatory surgical center’s or non-hospital provider organization’s gross patient
114service revenues to the total gross patient service revenues of all such hospitals, ambulatory
115surgical centers and non-hospital provider organizations. Each acute hospital, ambulatory
116surgical center and non-hospital provider organization shall make a preliminary payment to the
117commission on October 1 of each year in an amount equal to 1/2 of the previous year’s total
118assessment. Thereafter, each hospital, ambulatory surgical center and non-hospital provider
119organization shall pay, within 30 days’ notice from the commission, the balance of the total
120assessment for the current year based upon its most current projected gross patient service
121revenue. The commission shall subsequently adjust the assessment for any variation in actual and
122estimated expenses of the commission and for changes in hospital, ambulatory surgical center
123and non-hospital provider organization gross patient service revenue. Such estimated and actual 7 of 58
124expenses shall include an amount equal to the cost of fringe benefits and indirect expenses, as
125established by the comptroller under section 5D of chapter 29. In the event of late payment by
126any such hospital, ambulatory surgical center or non-hospital provider organization, the treasurer
127shall advance the amount of due and unpaid funds to the commission prior to the receipt of such
128monies in anticipation of such revenues up to the amount authorized in the then current budget
129attributable to such assessments and the commission shall reimburse the treasurer for such
130advances upon receipt of such revenues. This section shall not apply to any state institution or to
131any acute hospital which is operated by a city or town.
132 (d) The assessed amount for pharmaceutical manufacturing companies shall be not less
133than 5 per cent nor more than 10 per cent of the amount appropriated by the general court for the
134expenses of the commission minus amounts collected from: (i) filing fees; (ii) fees and charges
135generated by the commission; and (iii) federal matching revenues received for these expenses or
136received retroactively for expenses of predecessor agencies. Each pharmaceutical manufacturing
137company shall pay such assessed amount multiplied by the ratio of MassHealth’s net spending
138for the manufacturer’s prescription drugs based on the manufacturer labeler codes used in the
139MassHealth rebate program to MassHealth’s total pharmacy spending.
140 (e) The assessed amount for pharmacy benefit managers shall be not less than 5 per cent
141nor more than 10 per cent of the amount appropriated by the general court for the expenses of the
142commission minus amounts collected from: (i) filing fees; (ii) fees and charges generated by the
143commission; and (iii) federal matching revenues received for these expenses or received
144retroactively for expenses of predecessor agencies. Each pharmacy benefit manager shall pay
145such assessed amount multiplied by the ratio of the aggregate revenues of the pharmacy benefit
146manager attributed to residents of the commonwealth for whom it manages pharmaceutical 8 of 58
147benefits on behalf of carriers to the total of all such revenues generated by all pharmacy benefit
148managers attributed to residents of the commonwealth for whom they manage pharmaceutical
149benefits on behalf of carriers.
150 SECTION 6. Section 8 of said chapter 6D, as so appearing, is hereby amended by
151inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
152manager, pharmaceutical manufacturing company.
153 SECTION 7. Said section 8 of said chapter 6D, as so appearing, is hereby further
154amended by inserting after the word “organizations”, in line 15, the following words:- ,
155pharmacy benefit managers, pharmaceutical manufacturing companies.
156 SECTION 8. Said section 8 of said chapter 6D, as so appearing, is hereby further
157amended by striking out, in lines 33 and 34, the words “and (xi) any witness identified by the
158attorney general or the center” and inserting in place thereof the following words:- (xi) not less
159than 2 representatives of the pharmacy benefit management industry; (xii) not less than 3
160representatives of pharmaceutical manufacturing companies, 1 of whom shall be a representative
161of a publicly traded company that manufactures specialty drugs, 1 of whom shall be a
162representative of a company that manufacturers generic drugs and 1 of whom shall be a
163representative of a company that has been in existence for fewer than 10 years; and (xiii) any
164witness identified by the attorney general or the commission.
165 SECTION 9. Said section 8 of said chapter 6D, as so appearing, is hereby further
166amended by striking out, in line 49, the first time it appears, the word “and”.
167 SECTION 10. Said section 8 of said chapter 6D, as so appearing, is hereby further
168amended by inserting after the word “commission”, in line 60, the first time it appears, the 9 of 58
169following words:- ; (iii) in the case of pharmacy benefit managers and pharmaceutical
170manufacturing companies, testimony concerning factors underlying prescription drug costs and
171price increases, the impact of aggregate manufacturer rebates, discounts and other price
172concessions on net pricing; provided, however, that such testimony shall be suitable for public
173release and not likely to compromise the financial, competitive or proprietary nature of any
174information or data; and (iv) any other matters as determined by the commission.
175 SECTION 11. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
176hereby amended by striking out the second sentence and inserting in place thereof the following
177sentence:- The report shall be based on the commission’s analysis of information provided at the
178hearings by witnesses, providers, provider organizations, carriers, pharmacy benefit managers
179and pharmaceutical manufacturing companies, registration data collected pursuant to section 11,
180data collected or analyzed by the center pursuant to sections 8 to 10B, inclusive, of chapter 12C
181and any other available information, as defined in regulations promulgated by the commission,
182that the commission considers necessary to fulfill its duties under this section.
183 SECTION 12. Section 9 of said chapter 6D, as so appearing, is hereby amended by
184inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
185manager, pharmaceutical manufacturing company.
186 SECTION 13. Said section 9 of said chapter 6D, as so appearing, is hereby further
187amended by inserting after the word “organizations”, in line 82, the following words:- ,
188pharmacy benefit managers, pharmaceutical manufacturing companies.
189 SECTION 14. Said chapter 6D is hereby further amended by adding the following
190section:- 10 of 58
191 Section 22. Every 2 years, the commission, in consultation with the center, the group
192insurance commission, the office of Medicaid and the division of insurance, shall evaluate the
193impact of section 17T of chapter 32A, section 10R of chapter 118E, section 47VV of chapter
194175, section 8WW of chapter 176A, section 4WW of chapter 176B and section 4OO of chapter
195176G on the effects of capping co-payments on health care costs, including premiums,
196pharmaceutical spending, aggregate rebates, cost-sharing, drug treatment utilization and
197adherence, incidence of related acute events and health equity. Biennially, not later than
198November 30, the commission shall file a report of its findings with the clerks of the house of
199representatives and senate, the chairs of the joint committee on public health, the chairs of the
200joint committee on health care financing and the chairs of house and senate committees on ways
201and means.
202 SECTION 15. Section 1 of chapter 12C of the General Laws, as appearing in the 2022
203Official Edition, is hereby amended by inserting after the definition of “Dispersed service area”
204the following definition:-
205 “Drug rebate”, any: (i) negotiated price concessions, whether described as a rebate or
206otherwise, including, but not limited to, base price concessions, and reasonable estimates of any
207price protection rebates and performance-based price concessions that may accrue, directly or
208indirectly, to a carrier, pharmacy benefit manager or other party on a carrier’s behalf during a
209carrier’s plan year from a pharmaceutical manufacturing company, dispensing pharmacy or other
210party to the transaction based on the amounts the carrier received in the prior quarter or
211reasonably expects to receive in the current quarter; and (ii) reasonable estimates of any price
212concessions, fees and other administrative costs that are passed through or are reasonably
213anticipated to be passed through to the carrier, pharmacy benefit manager or other party on the 11 of 58
214carrier’s behalf and that serve to reduce the carrier’s prescription drug liabilities for the plan year
215based on the amounts the carrier received in the prior quarter or reasonably expects to receive in
216the current quarter.
217 SECTION 16. Said section 1 of said chapter 12C, as so appearing, is hereby further
218amended by inserting after the definition of “Patient-centered medical home” the following 3
219definitions:-
220 “Payer”, any entity, other than an individual, that pays providers for the provision of
221health care services, including self-insured plans to the extent allowed under the federal
222Employee Retirement Income Security Act of 1974.
223 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
224preparation, propagation, compounding, conversion or processing of prescription drugs, directly
225or indirectly, by extraction from substances of natural origin, independently by means of
226chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
227repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
228“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
229under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
230chapter 112.
231 “Pharmacy benefit manager”, as defined in section 1 of chapter 176Y.
232 SECTION 17. Said section 1 of said chapter 12C, as so appearing, is hereby further
233amended by adding the following definition:- 12 of 58
234 “Wholesale acquisition cost”, the cost of a prescription drug as defined in 42 U.S.C.
235section 1395w-3a(c)(6)(B).
236 SECTION 18. Section 3 of said chapter 12C, as so appearing, is hereby amended by
237inserting after the word “organizations”, in lines 13 and 14, the following words:- , pharmacy
238benefit managers, pharmaceutical manufacturing companies.
239 SECTION 19. Said section 3 of said chapter 12C, as so appearing, is hereby further
240amended by inserting, after the word “provider”, in line 24, the following words:- , pharmacy
241benefit manager, pharmaceutical manufacturing company.
242 SECTION 20. Section 5 of said chapter 12C, as so appearing, is hereby amended by
243inserting after the word “organizations”, in line 11, the following words:- , pharmacy benefit
244managers, pharmaceutical manufacturing companies.
245 SECTION 21. Said section 5 of said chapter 12C, as so appearing, is hereby further
246amended by inserting after the word “providers”, in line 15, the following words:- , affected
247pharmacy benefit managers, affected pharmaceutical manufacturing companies.
248 SECTION 22. Said chapter 12C is hereby further amended by striking out section 7, as so
249appearing, and inserting in place thereof the following section:-
250 Section 7. (a) For the purposes of this section, “non-hospital provider organization” shall
251mean a provider organization required to register under section 11 under chapter 6D that is: (i) a
252non-hospital-based physician practice with not less than $500,000,000 in annual gross patient
253service revenue; (ii) a clinical laboratory; (iii) an imaging facility; or (iv) a network of affiliated
254urgent care centers. 13 of 58
255 (b) Each acute hospital, ambulatory surgical center and non-hospital provider
256organization shall pay to the commonwealth an amount for the estimated expenses of the center
257and for the other purposes described in this chapter which shall include any transfer made to the
258Community Hospital Reinvestment Trust Fund established in section 2TTTT of chapter 29.
259 (c) The assessed amount for hospitals, ambulatory surgical centers and non-hospital
260provider organizations shall be not less than 30 per cent nor more than 40 per cent of the amount
261appropriated by the general court for the expenses of the center and for the other purposes
262described in this chapter which shall include any transfer made to the Community Hospital
263Reinvestment Trust Fund established in section 2TTTT of chapter 29 minus amounts collected
264from: (i) filing fees; (ii) fees and charges generated by the center’s publication or dissemination
265of reports and information; and (iii) federal matching revenues received for these expenses or
266received retroactively for expenses of predecessor agencies; provided, that non-hospital provider
267organizations shall be assessed not less than 3 per cent nor more than 8 per cent of the assessed
268amount for hospitals, ambulatory surgical centers and non-hospital provider organizations. Each
269acute hospital, ambulatory surgical center and non-hospital provider organization shall pay such
270assessed amount multiplied by the ratio of the hospital’s, ambulatory surgical center’s or non-
271hospital provider organization’s gross patient service revenues to the total gross patient services
272revenues of all such hospitals, ambulatory surgical centers and non-hospital provider
273organizations. Each acute hospital, ambulatory surgical center and non-hospital provider
274organization shall make a preliminary payment to the center on October 1 of each year in an
275amount equal to 1/2 of the previous year’s total assessment. Thereafter, each hospital,
276ambulatory surgical center and non-hospital provider organization shall pay, within 30 days’
277notice from the center, the balance of the total assessment for the current year based upon its 14 of 58
278most current projected gross patient service revenue. The center shall subsequently adjust the
279assessment for any variation in actual and estimated expenses of the center and for changes in
280hospital, ambulatory surgical center and non-hospital provider organization gross patient service
281revenue. Such estimated and actual expenses shall include an amount equal to the cost of fringe
282benefits and indirect expenses, as established by the comptroller under section 5D of chapter 29.
283In the event of late payment by any such hospital, ambulatory surgical center or non-hospital
284provider organization, the treasurer shall advance the amount of due and unpaid funds to the
285center prior to the receipt of such monies in anticipation of such revenues up to the amount
286authorized in the then current budget attributable to such assessments and the center shall
287reimburse the treasurer for such advances upon receipt of such revenues. This section shall not
288apply to any state institution or to any acute hospital which is operated by a city or town.
289 (d) The assessed amount for pharmaceutical manufacturing companies shall be not less
290than 5 per cent nor more than 10 per cent of the amount appropriated by the general court for the
291expenses of the center minus amounts collected from: (i) filing fees; (ii) fees and charges
292generated by the center’s publication or dissemination of reports and information; and (iii)
293federal matching revenues received for these expenses or received retroactively for expenses of
294predecessor agencies. Each pharmaceutical manufacturing company shall pay such assessed
295amount multiplied by the ratio of MassHealth’s net spending for the manufacturer’s prescription
296drugs based on the manufacturer labeler codes used in the MassHealth rebate program to
297MassHealth’s total pharmacy spending.
298 (e) The assessed amount for pharmacy benefit managers shall be not less than 5 per cent
299nor more than 10 per cent of the amount appropriated by the general court for the expenses of the
300center minus amounts collected from: (i) filing fees; (ii) fees and charges generated by the 15 of 58
301center’s publication or dissemination of reports and information; and (iii) federal matching
302revenues received for these expenses or received retroactively for expenses of predecessor
303agencies. Each pharmacy benefit manager shall pay such assessed amount multiplied by the ratio
304of the aggregate revenues of the pharmacy benefit manager attributed to residents of the
305commonwealth for whom it manages pharmaceutical benefits on behalf of carriers to the total of
306all such revenues generated by all pharmacy benefit managers attributed to residents of the
307commonwealth for whom they manage pharmaceutical benefits on behalf of carriers.
308 SECTION 23. Said chapter 12C is hereby further amended by inserting after section 10
309the following 2 sections:-
310 Section 10A. The center shall promulgate regulations necessary to ensure the uniform
311reporting of information from pharmacy benefit managers that enables the center to analyze: (i)
312year-over-year changes in wholesale acquisition cost; (ii) year-over-year trends in formulary,
313maximum allowable cost lists and cost-sharing design, including the establishment and
314management of specialty product lists; (iii) aggregate information regarding discounts,
315utilizations limits, rebates, manufacturer administrative fees and other financial incentives or
316concessions related to pharmaceutical products or formulary programs; (iv) information
317regarding the aggregate amount of payments made from a pharmacy benefit manager to
318pharmacies owned or controlled by the pharmacy benefit manager, and the aggregate amount of
319payments made from a pharmacy benefit manager to pharmacies that are not owned or controlled
320by the pharmacy benefit manager; (v) data necessary for monitoring and enforcement of chapter
321176Y and regulations promulgated thereof; and (vi) any other additional information deemed
322reasonably necessary by the center as set forth in the center’s regulations. 16 of 58
323 Section 10B. (a) As used in this section, the following words shall, unless the context
324clearly requires otherwise, have the following meanings:
325 “Cost to the commonwealth”, the cost incurred for outpatient prescription drugs by the
326office of Medicaid and the group insurance commission.
327 “Substantial net increase”, an increase in the wholesale acquisition cost less rebates paid
328to the state and payers in the commonwealth, of not less than 25 per cent in the immediate prior
329calendar year.
330 (b)(1) Annually, not later than March 31, the center shall prepare a list of not more than
33110 outpatient prescription drugs that the center determines: (i) are provided at a substantial cost
332to the commonwealth considering the net cost of such drugs; and (ii) experienced a substantial
333net increase. The list shall include outpatient prescription drugs from different therapeutic classes
334and not more than 3 generic outpatient prescription drugs.
335 (2) Prior to publishing the annual list pursuant to paragraph (1), the center shall prepare a
336preliminary list that includes outpatient prescription drugs that the center plans to include on
337such annual list. The center shall make such preliminary list available for public comment for not
338less than 30 days. During the public comment period, any manufacturer of an outpatient
339prescription drug included on the preliminary list may produce documentation, as permitted by
340federal law, to the center to establish that such drug did not experience a substantial net increase.
341If such documentation establishes, to the satisfaction of the center, that a substantial net increase
342did not occur, the center shall, not later than 15 days after the closing of the public comment
343period, remove such drug from the preliminary list before publishing the annual list pursuant to
344paragraph (1). 17 of 58
345 (c) The pharmaceutical manufacturing company that manufacturers a prescription drug
346included on the annual list prepared by the center pursuant to paragraph (1) of subsection (b)
347shall provide to the center the following:
348 (i) a written, narrative description, suitable for public release, of factors that caused the
349increase in the wholesale acquisition cost of the listed prescription drug; and
350 (ii) aggregate, company-level research and development costs and such other capital
351expenditures that the center deems relevant for the most recent calendar year for which final
352audited data is available.
353 (d) The quality and types of information and data that a pharmaceutical manufacturing
354company submits to the center pursuant to this section shall be consistent with the quality and
355types of information and data that the pharmaceutical manufacturing company includes in: (i)
356such pharmaceutical manufacturing company’s annual consolidated report on Securities and
357Exchange Commission Form 10-K; or (ii) any other public disclosure.
358 (e) The center shall consult with pharmaceutical manufacturing companies to establish a
359single, standardized form for reporting information and data pursuant to this section. The form
360shall minimize the administrative burden and cost imposed on the center and pharmaceutical
361manufacturing companies.
362 (f) The center shall compile an annual report based on the information that the center
363receives pursuant to subsection (c). The center shall publish such report and the information
364described in this section on the center’s website not later than October 1 of each year. 18 of 58
365 (g) Except as otherwise provided in this section, information and data submitted to the
366center pursuant to this section shall not be a public record and shall be exempt from disclosure
367pursuant to clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66. No such
368information and data shall be disclosed in a manner that may: (i) compromise the financial,
369competitive or proprietary nature of such information and data; or (ii) enable a third-party to
370identify: (A) an individual drug, therapeutic class of drugs or pharmaceutical manufacturing
371company; (B) the prices charged for any particular drug or therapeutic class of drugs; or (C) the
372value of any rebate provided for any particular drug or class of drugs.
373 SECTION 24. Said chapter 12C is hereby further amended by striking out section 11, as
374appearing in the 2022 Official Edition, and inserting in place thereof the following section:-
375 Section 11. The center shall ensure the timely reporting of information required under
376sections 8 to 10B, inclusive. The center shall notify payers, providers, provider organizations,
377pharmacy benefit managers and pharmaceutical manufacturing companies of any applicable
378reporting deadlines. The center shall notify, in writing, a payer, provider, provider organization,
379pharmacy benefit manager or pharmaceutical manufacturing company that has failed to meet a
380reporting deadline of such failure and that failure to respond within 2 weeks of the receipt of the
381notice may result in penalties. The center may assess a penalty against a payer, provider,
382provider organization, pharmacy benefit manager or pharmaceutical manufacturing company that
383fails, without just cause, to provide the requested information not later than 2 weeks following
384receipt of the written notice required under this section, of not more than $25,000 per week for
385each week of delay after the 2-week period following receipt of the notice. Amounts collected
386under this section shall be deposited in the Healthcare Payment Reform Fund established in
387section 100 of chapter 194 of the acts of 2011. 19 of 58
388 SECTION 25. Section 12 of said chapter 12C, as so appearing, is hereby amended by
389striking out, in line 2, the words “8, 9 and 10” and inserting in place thereof the following
390words:- 8 to 10B, inclusive.
391 SECTION 26. Subsection (a) of section 16 of said chapter 12C, as so appearing, is hereby
392amended by striking out the first sentence and inserting in place thereof the following sentence:-
393The center shall publish an annual report based on the information submitted pursuant to: (i)
394sections 8 to 10B, inclusive, concerning health care provider, provider organization, pharmacy
395benefit manager, pharmaceutical manufacturing company and private and public health care
396payer costs and cost and price trends; (ii) section 13 of chapter 6D relative to market impact
397reviews; and (iii) section 15 relative to quality data.
398 SECTION 27. Chapter 32A of the General Laws is hereby amended by inserting after
399section 17S the following section:-
400 Section 17T. (a) As used in this section, the following words shall, unless the context
401clearly requires otherwise, have the following meanings:
402 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
403drug application approved under 21 U.S.C. 355(c) except for: (A) any drug approved through an
404application submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that
405is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
406Administration, to a drug approved under 21 U.S.C. 355(c); (B) an abbreviated new drug
407application that was approved by the United States Secretary of Health and Human Services
408under section 505(c) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
409date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of 20 of 58
4101984, Public Law 98-417, 98 Stat. 1585; or (C) an authorized generic drug as defined in 42
411C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
412under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
413based on available data resources such as Medi-Span.
414 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
415abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
416drug as defined in 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
417and was not originally marketed under a new drug application; or (iv) identified by the health
418benefit plan as a generic drug based on available data resources such as Medi-Span.
419 (b) The commission shall identify 1 generic drug and 1 brand name drug used to treat
420each of the following chronic conditions: (i) diabetes; (ii) asthma; and (iii) the most prevalent
421heart condition among its members.
422 (c) The commission shall identify insulin as the drug used to treat diabetes. In
423determining the 1 generic drug and 1 brand name drug used to treat each chronic condition, the
424commission shall consider whether the drug is:
425 (i) of clear benefit and strongly supported by clinical evidence;
426 (ii) likely to reduce hospitalizations or emergency department visits, reduce future
427exacerbations of illness progression or improve quality of life;
428 (iii) cost effective for the commission and its members;
429 (iv) at low risk for overutilization, abuse, addiction, diversion or fraud; and
430 (v) one of the most widely utilized as a treatment for the chronic condition. 21 of 58
431 (d) The commission shall provide coverage for the brand name drugs and generic drugs
432identified pursuant to subsection (b). Coverage for the identified generic drugs shall not be
433subject to any cost-sharing, including co-payments and co-insurance, and shall not be subject to
434any deductible. Coverage for identified brand name drugs shall not be subject to any deductible
435or co-insurance and any co-payment shall not exceed $25 per 30-day supply. Coverage for 1
436brand name insulin drug per dosage and type, including rapid-acting, short-acting, intermediate-
437acting, long-acting, ultra long-acting and premixed under this section shall not be subject to any
438deductible or co-insurance and any co-payment shall not exceed $25 per 30-day supply.
439 (e) The commission shall implement a continuity of coverage policy to apply to members
440that are new to the commission and that provides coverage for a 30-day fill of a United States
441Food and Drug Administration-approved drug reimbursed through a pharmacy benefit that the
442member has already been prescribed and on which the member is stable, upon documentation by
443the member’s prescriber; provided, that the commission shall not apply any greater deductible,
444coinsurance, copayments or out-of-pocket limits than would otherwise apply to other drugs
445covered by the plan.
446 (f) The commission shall make changes in the drugs selected pursuant to this section not
447more than annually.
448 (g) The commission shall make public the drugs selected pursuant to subsection (b).
449 SECTION 28. Chapter 94C of the General Laws is hereby amended by inserting after
450section 21B the following section:-
451 Section 21C. (a) For the purposes of this section, the following words shall, unless the
452context clearly requires otherwise, have the following meanings: 22 of 58
453 “Cost-sharing”, as defined in section 1 of chapter 176Y.
454 “Health benefit plan”, as defined in section 1 of chapter 176O.
455 “Pharmacy retail price”, the amount an individual would pay for a prescription drug at a
456pharmacy if the individual purchased that prescription drug at that pharmacy without using a
457health benefit plan or any other prescription medication benefit or discount.
458 (b) At the point of sale, a pharmacy shall charge an individual for a prescription drug the
459lesser of: (i) the applicable cost-sharing amount; or (ii) the pharmacy retail price.
460 (c) A health benefit plan or carrier shall not require an insured to make a cost-sharing
461payment for a prescription drug in an amount greater than that charged pursuant to subsection
462(b).
463 (d) No contractual obligation as between a pharmacy benefit manager and a pharmacist
464shall prohibit a pharmacist from complying with this section.
465 SECTION 29. Chapter 118E of the General Laws is hereby amended by inserting after
466section 10Q the following section:-
467 Section 10R. (a) As used in this section, the following words shall, unless the context
468clearly requires otherwise, have the following meanings:
469 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
470drug application approved under 21 U.S.C. 355(c) except for: (A) any drug approved through an
471application submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that
472is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
473Administration, to a drug approved under 21 U.S.C. 355(c); (B) an abbreviated new drug 23 of 58
474application that was approved by the United States Secretary of Health and Human Services
475under section 505(c) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
476date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
4771984, Public Law 98-417, 98 Stat. 1585; or (C) an authorized generic drug as defined in 42
478C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
479under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
480based on available data resources such as Medi-Span.
481 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
482abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
483drug as defined in 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
484and was not originally marketed under a new drug application; or (iv) identified by the health
485benefit plan as a generic drug based on available data resources such as Medi-Span.
486 (b) The division shall identify 1 generic drug and 1 brand name drug used to treat each of
487the following chronic conditions: (i) diabetes; (ii) asthma; and (iii) the most prevalent heart
488condition among its enrollees.
489 (c) The division shall identify insulin as the drug used to treat diabetes. In determining
490the 1 generic drug and 1 brand name drug used to treat each chronic condition, the division shall
491consider whether the drug is:
492 (i) of clear benefit and strongly supported by clinical evidence;
493 (ii) likely to reduce hospitalizations or emergency department visits, reduce future
494exacerbations of illness progression or improve quality of life; 24 of 58
495 (iii) cost effective for the division and its enrollees;
496 (iv) at low risk for overutilization, abuse, addiction, diversion or fraud; and
497 (v) one of the most widely utilized as a treatment for the chronic condition.
498 (d) The division and its contracted health insurers, health plans, health maintenance
499organizations, behavioral health management firms and third-party administrators under contract
500to a Medicaid managed care organization or primary care clinician plan shall provide coverage
501for the brand name drugs and generic drugs identified pursuant to subsection (b). Coverage for
502the identified generic drugs shall not be subject to any cost-sharing, including co-payments and
503co-insurance and shall not be subject to any deductible. Coverage for identified brand name
504drugs shall not be subject to any deductible or co-insurance and any co-payment shall not exceed
505$25 per 30-day supply. Coverage for 1 brand name insulin drug per dosage and type, including
506rapid-acting, short-acting, intermediate-acting, long-acting, ultra long-acting and premixed under
507this section shall not be subject to any deductible or co-insurance and any co-payment shall not
508exceed $25 per 30-day supply.
509 (e) This provision shall not apply to health plans providing coverage in the senior care
510options program to MassHealth-only members who are ages 65 and older.
511 (f) The division shall implement a continuity of coverage policy that apply to enrollees
512that are new to the Medicaid program and that provides coverage for a 30-day fill of a United
513States Food and Drug Administration-approved drug reimbursed through a pharmacy benefit that
514the enrollee has already been prescribed and on which the enrollee is stable, upon documentation
515by the enrollee’s prescriber; provided, that the division shall not apply any greater deductible, 25 of 58
516coinsurance, copayments or out-of-pocket limits than would otherwise apply to other drugs
517covered by the plan.
518 (g) The division shall make changes in the drugs selected pursuant to this section not
519more than annually.
520 (h) The division shall make public the drugs selected pursuant to this subsection (b).
521 SECTION 30. Chapter 175 of the General Laws is hereby amended by inserting after
522section 47UU, added by section 56 of chapter 28 of the acts of 2023, the following section:-
523 Section 47VV. (a) As used in this section, the following words shall, unless the context
524clearly requires otherwise, have the following meanings:
525 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
526drug application approved under 21 U.S.C. 355(c) except for: (A) any drug approved through an
527application submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that
528is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
529Administration, to a drug approved under 21 U.S.C. 355(c); (B) an abbreviated new drug
530application that was approved by the United States Secretary of Health and Human Services
531under section 505(c) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
532date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
5331984, Public Law 98-417, 98 Stat. 1585; or (C) an authorized generic drug as defined in 42
534C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
535under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
536based on available data resources such as Medi-Span. 26 of 58
537 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
538abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
539drug as defined in 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
540and was not originally marketed under a new drug application; or (iv) identified by the health
541benefit plan as a generic drug based on available data resources such as Medi-Span.
542 (b) Any policy, contract, agreement, plan or certificate of insurance issued, delivered or
543renewed within the commonwealth, which is considered credible coverage under section 1 of
544chapter 111M, shall identify 1 generic drug and 1 brand name drug used to treat each of the
545following chronic conditions: (i) diabetes; (ii) asthma; and (iii) the most prevalent heart
546condition among its enrollees.
547 (c) The carrier shall identify insulin as the drug used to treat diabetes. In determining the
5481 generic drug and 1 brand name drug used to treat each chronic condition, the carrier shall
549consider whether the drug is:
550 (i) of clear benefit and strongly supported by clinical evidence;
551 (ii) likely to reduce hospitalizations or emergency department visits, reduce future
552exacerbations of illness progression or improve quality of life;
553 (iii) cost effective for the carrier and its enrollees;
554 (iv) at low risk for overutilization, abuse, addiction, diversion or fraud; and
555 (v) one of the most widely utilized as a treatment for the chronic condition.
556 (d) Any such policy, contract, agreement, plan or certificate of insurance issued,
557delivered or renewed within the commonwealth, which is considered credible coverage under 27 of 58
558section 1 of chapter 111M, shall provide coverage for the brand name drugs and generic drugs
559identified pursuant to paragraph (b). Coverage for the identified generic drugs shall not be
560subject to any cost-sharing, including co-payments and co-insurance and shall not be subject to
561any deductible. Coverage for identified brand name drugs shall not be subject to any deductible
562or co-insurance and any co-payment shall not exceed $25 per 30-day supply. Coverage for 1
563brand name insulin drug per dosage and type, including rapid-acting, short-acting, intermediate-
564acting, long-acting, ultra long-acting and premixed under this section shall not be subject to any
565deductible or co-insurance and any co-payment shall not exceed $25 per 30-day supply.
566 (e) The carrier shall implement a continuity of coverage policy to apply to enrollees that
567are new to the carrier and that provides coverage for a 30-day fill of a United States Food and
568Drug Administration-approved drug reimbursed through a pharmacy benefit that the enrollee has
569already been prescribed and on which the enrollee is stable, upon documentation by the
570enrollee’s prescriber; provided, that a carrier shall not apply any greater deductible, coinsurance,
571copayments or out-of-pocket limits than would otherwise apply to other drugs covered by the
572plan.
573 (f) The carrier shall make changes in the drugs selected pursuant to this section not more
574than annually.
575 (g) The carrier shall make public the drugs selected pursuant to subsection (b).
576 SECTION 31. Section 226 of said chapter 175 is hereby repealed.
577 SECTION 32. Chapter 176A of the General Laws is hereby amended by inserting after
578section 8VV, added by section 58 of chapter 28 of the acts of 2023, the following section:- 28 of 58
579 Section 8WW. (a) As used in this section, the following words shall, unless the context
580clearly requires otherwise, have the following meanings:
581 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
582drug application approved under 21 U.S.C. 355(c) except for: (A) any drug approved through an
583application submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that
584is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
585Administration, to a drug approved under 21 U.S.C. 355(c); (B) an abbreviated new drug
586application that was approved by the United States Secretary of Health and Human Services
587under section 505(c) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
588date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
5891984, Public Law 98-417, 98 Stat. 1585; or (C) an authorized generic drug as defined in 42
590C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
591under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
592based on available data resources such as Medi-Span.
593 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
594abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
595drug as defined in 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
596and was not originally marketed under a new drug application; or (iv) identified by the health
597benefit plan as a generic drug based on available data resources such as Medi-Span.
598 (b) Any contract between a subscriber and the corporation under an individual or group
599hospital service plan that is delivered, issued or renewed within the commonwealth shall identify 29 of 58
6001 generic drug and 1 brand name drug used to treat each of the following chronic conditions: (i)
601diabetes; (ii) asthma; and (iii) the most prevalent heart condition among its enrollees.
602 (c) The carrier shall identify insulin as the drug used to treat diabetes. In determining the
6031 generic drug and 1 brand name drug used to treat each chronic condition, the carrier shall
604consider whether the drug is:
605 (i) of clear benefit and strongly supported by clinical evidence;
606 (ii) likely to reduce hospitalizations or emergency department visits, reduce future
607exacerbations of illness progression or improve quality of life;
608 (iii) cost effective for the carrier and its enrollees;
609 (iv) at low risk for overutilization, abuse, addiction, diversion or fraud; and
610 (v) one of the most widely utilized as a treatment for the chronic condition.
611 (d) Any contract between a subscriber and the corporation under an individual or group
612hospital service plan that is delivered, issued or renewed within the commonwealth shall provide
613coverage for the brand name drugs and generic drugs identified pursuant to subsection (b).
614Coverage for the identified generic drugs shall not be subject to any cost-sharing, including co-
615payments and co-insurance and shall not be subject to any deductible. Coverage for identified
616brand name drugs shall not be subject to any deductible or co-insurance and any co-payment
617shall not exceed $25 per 30-day supply. Coverage for 1 brand name insulin drug per dosage and
618type, including rapid-acting, short-acting, intermediate-acting, long-acting, ultra long-acting and
619premixed under this section shall not be subject to any deductible or co-insurance and any co-
620payment shall not exceed $25 per 30-day supply. 30 of 58
621 (e) The carrier shall implement a continuity of coverage policy to apply to enrollees that
622are new to the plan and that provides coverage for a 30-day fill of a United States Food and Drug
623Administration-approved drug reimbursed through a pharmacy benefit that the enrollee has
624already been prescribed and on which the enrollee is stable, upon documentation by the
625enrollee’s prescriber; provided, that a carrier shall not apply any greater deductible, coinsurance,
626copayments or out-of-pocket limits than would otherwise apply to other drugs covered by the
627plan.
628 (f) The carrier shall make changes in the drugs selected pursuant to this section not more
629than annually.
630 (g) The carrier shall make public the drugs selected pursuant to subsection (b).
631 SECTION 33. Chapter 176B of the General Laws is hereby amended by inserting after
632section 4VV, added by section 59 of chapter 28 of the acts of 2023, the following section:-
633 Section 4WW. (a) As used in this section, the following words shall, unless the context
634clearly requires otherwise, have the following meanings:
635 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
636drug application approved under 21 U.S.C. 355(c) except for: (A) any drug approved through an
637application submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that
638is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
639Administration, to a drug approved under 21 U.S.C. 355(c); (B) an abbreviated new drug
640application that was approved by the United States Secretary of Health and Human Services
641under section 505(c) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
642date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of 31 of 58
6431984, Public Law 98-417, 98 Stat. 1585; or (C) an authorized generic drug as defined in 42
644C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
645under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
646based on available data resources such as Medi-Span.
647 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
648abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
649drug as defined in 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
650and was not originally marketed under a new drug application; or (iv) identified by the health
651benefit plan as a generic drug based on available data resources such as Medi-Span.
652 (b) A subscription certificate under an individual or group medical service agreement
653delivered, issued or renewed within the commonwealth shall identify 1 generic drug and 1 brand
654name drug used to treat each of the following chronic conditions: (i) diabetes; (ii) asthma; and
655(iii) the most prevalent heart condition among its enrollees.
656 (c) The carrier shall identify insulin as the drug used to treat diabetes. In determining the
6571 generic drug and 1 brand name drug used to treat each chronic condition, the carrier shall
658consider whether the drug is:
659 (i) of clear benefit and strongly supported by clinical evidence;
660 (ii) likely to reduce hospitalizations or emergency department visits, reduce future
661exacerbations of illness progression or improve quality of life;
662 (iii) cost effective for the carrier and its enrollees;
663 (iv) at low risk for overutilization, abuse, addiction, diversion or fraud; and 32 of 58
664 (v) one of the most widely utilized as a treatment for the chronic condition.
665 (d) A subscription certificate under an individual or group medical service agreement
666delivered, issued or renewed within the commonwealth shall provide coverage for the brand
667name drugs and generic drugs identified pursuant to subsection (b). Coverage for the identified
668generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance
669and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
670subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
671supply. Coverage for 1 brand name insulin drug per dosage and type, including rapid-acting,
672short-acting, intermediate-acting, long-acting, ultra long-acting and premixed under this section
673shall not be subject to any deductible or co-insurance and any co-payment shall not exceed $25
674per 30-day supply.
675 (e) The carrier shall implement a continuity of coverage policy to apply to enrollees that
676are new to the plan and that provides coverage for a 30-day fill of a United States Food and Drug
677Administration-approved drug reimbursed through a pharmacy benefit that the enrollee has
678already been prescribed and on which the enrollee is stable, upon documentation by the
679enrollee’s prescriber; provided, that a carrier shall not apply any greater deductible, coinsurance,
680copayments or out-of-pocket limits than would otherwise apply to other drugs covered by the
681plan.
682 (f) The carrier shall make changes in the drugs selected pursuant to this section not more
683than annually.
684 (g) The carrier shall make public the drugs selected pursuant to subsection (b). 33 of 58
685 SECTION 34. Chapter 176G of the General Laws is hereby amended by inserting after
686section 4NN, added by section 60 of chapter 28 of the acts of 2023, the following section:-
687 Section 4OO. (a) As used in this section, the following words shall, unless the context
688clearly requires otherwise, have the following meanings:
689 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
690drug application approved under 21 U.S.C. 355(c) except for: (A) any drug approved through an
691application submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that
692is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
693Administration, to a drug approved under 21 U.S.C. 355(c); (B) an abbreviated new drug
694application that was approved by the United States Secretary of Health and Human Services
695under section 505(c) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
696date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
6971984, Public Law 98-417, 98 Stat. 1585; or (C) an authorized generic drug as defined in 42
698C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
699under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
700based on available data resources such as Medi-Span.
701 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
702abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
703drug as defined in 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
704and was not originally marketed under a new drug application; or (iv) identified by the health
705benefit plan as a generic drug based on available data resources such as Medi-Span. 34 of 58
706 (b) An individual group health maintenance contract that is issued or renewed within or
707without the commonwealth shall identify 1 generic drug and 1 brand name drug used to treat
708each of the following chronic conditions: (i) diabetes; (ii) asthma; and (iii) the most prevalent
709heart condition among its enrollees.
710 (c) The carrier shall identify insulin as the drug used to treat diabetes. In determining the
7111 generic drug and 1 brand name drug used to treat each chronic condition, the carrier shall
712consider whether the drug is:
713 (i) of clear benefit and strongly supported by clinical evidence to be cost-effective;
714 (ii) likely to reduce hospitalizations or emergency department visits, reduce future
715exacerbations of illness progression or improve quality of life;
716 (iii) cost effective for the carrier and its enrollees;
717 (iv) at low risk for overutilization, abuse, addiction, diversion or fraud; and
718 (v) one of the most widely utilized as a treatment for the chronic condition.
719 (d) An individual group health maintenance contract that is issued or renewed within or
720without the commonwealth shall provide coverage for the brand name drugs and generic drugs
721identified pursuant to subsection (b). Coverage for the identified generic drugs shall not be
722subject to any cost-sharing, including co-payments and co-insurance and shall not be subject to
723any deductible. Coverage for identified brand name drugs shall not be subject to any deductible
724or co-insurance and any co-payment shall not exceed $25 per 30-day supply. Coverage for 1
725brand name insulin drug per dosage and type, including rapid-acting, short-acting, intermediate- 35 of 58
726acting, long-acting, ultra long-acting and premixed under this section shall not be subject to any
727deductible or co-insurance and any co-payment shall not exceed $25 per 30-day supply.
728 (e) The carrier shall implement a continuity of coverage policy to apply to enrollees that
729are new to the plan and that provides coverage for a 30-day fill of a United States Food and Drug
730Administration-approved drug reimbursed through a pharmacy benefit that the enrollee has
731already been prescribed and on which the enrollee is stable, upon documentation by the
732enrollee’s prescriber; provided, that a carrier shall not apply any greater deductible, coinsurance,
733copayments or out-of-pocket limits than would otherwise apply to other drugs covered by the
734plan.
735 (f) The carrier shall make changes in the drugs selected pursuant to this section not more
736than annually.
737 (g) The carrier shall make public the drugs selected pursuant to subsection (b).
738 SECTION 35. Chapter 176O of the General Laws is hereby amended by adding the
739following 2 sections:-
740 Section 30. (a) On an annual basis, each carrier shall report to the division the drugs
741selected to be provided with no or limited cost-sharing under section 47VV of chapter 175,
742section 8WW of chapter 176A, section 4WW of chapter 176B and section 4OO of chapter 176G.
743The commissioner shall review the drugs to verify that the selected drugs meet the criteria
744identified in those sections. Should a selected drug be deemed by the commissioner to not meet
745the criteria, the commissioner may require a different drug to be selected. The commissioner
746shall disclose the list of drugs selected by each entity annually on the division’s website. 36 of 58
747 Section 31. (a) As used in this section, the following words shall, unless the context
748clearly requires otherwise, have the following meanings:
749 “Cost-sharing”, as defined in section 1 of chapter 176Y.
750 “Estimated rebate”, any: (i) negotiated price concessions, whether described as a rebate
751or otherwise, including, but not limited to, base price concessions, and reasonable estimates of
752any price protection rebates and performance-based price concessions that may accrue, directly
753or indirectly, to a carrier, pharmacy benefit manager or other party on a carrier’s behalf during a
754carrier’s plan year from a pharmaceutical manufacturing company, dispensing pharmacy or other
755party to the transaction based on the amounts the carrier received in the prior quarter or
756reasonably expects to receive in the current quarter; and (ii) reasonable estimates of any price
757concessions, fees and other administrative costs that are passed through, or are reasonably
758anticipated to be passed through to the carrier, pharmacy benefit manager or other party on the
759carrier’s behalf and that serve to reduce the carrier’s prescription drug liabilities for the plan year
760based on the amounts the carrier received in the prior quarter or reasonably expects to receive in
761the current quarter.
762 “Pharmacy benefit manager”, as defined in section 1 of chapter 176Y.
763 “Price protection rebate”, a negotiated price concession that accrues directly or indirectly
764to the carrier, or other party on behalf of the carrier, including a pharmacy benefit manager, in
765the event of an increase in the wholesale acquisition cost of a drug that is greater than a specified
766threshold.
767 (b) A carrier, or any pharmacy benefit manager, shall make available to an insured at
768least 80 per cent of the estimated rebates received by such carrier, or any pharmacy benefit 37 of 58
769manager, by reducing the amount of defined cost-sharing that the carrier would otherwise charge
770at the point of sale, except that the reduction amount shall not result in a credit at the point of
771sale. Neither the insured nor the carrier shall be responsible for any difference between the
772estimated rebate amount and the actual rebate amount the carrier receives; provided, that such
773estimates were calculated in good faith.
774 (c) Nothing in this section shall preclude a pharmacy benefit manager from decreasing an
775insured’s defined cost-sharing by an amount greater than that required under subsection (b).
776 (d) Annually, not later than April 1, a carrier shall file with the division a report in the
777manner and form determined by the commissioner demonstrating the manner in which the carrier
778has complied with this section. If the commissioner determines that a carrier has not complied
779with 1 or more requirements of this section, the commissioner shall notify the carrier of such
780noncompliance and a date by which the carrier must demonstrate compliance. If the carrier does
781not come into compliance by such date, the division shall impose a fine not to exceed $5,000 for
782each day during which such noncompliance continues.
783 (e) In implementing the requirements of this section, the division shall only regulate a
784carrier or pharmacy benefit manager to the extent permissible under applicable law.
785 (f) A pharmacy benefit manager, its agent or any third-party administrator shall not
786publish or otherwise disclose information regarding the actual amount of rebates a carrier
787receives on a specific product or therapeutic class of products, manufacturer or pharmacy-
788specific basis. Such information shall be considered to be a trade secret and confidential
789commercial information, shall not be a public record as defined by clause Twenty-sixth of
790section 7 of chapter 4 or section 10 of chapter 66, and shall not be disclosed directly or 38 of 58
791indirectly, or in a manner that would allow for the identification of an individual product,
792therapeutic class of products or manufacturer, or in a manner that would have the potential to
793compromise the financial, competitive or proprietary nature of the information. A pharmacy
794benefit manager shall impose the confidentiality protections and requirements of this section on
795any agent or third-party administrator that performs health care or administrative services on
796behalf of the pharmacy benefit manager that may receive or have access to rebate related
797information.
798 SECTION 36. The General Laws are hereby amended by inserting after chapter 176X
799 the following chapter:-
800 CHAPTER 176Y
801 LICENSURE AND REGULATION OF PHARMACY BENEFIT MANAGERS
802 Section 1. As used in this chapter, unless the context clearly requires otherwise, the
803following words shall have the following meanings:
804 “Carrier”, as defined in section 1 of chapter 176O.
805 “Clean claim”, a claim that has no defect or impropriety, including a lack of any required
806substantiating documentation, or other circumstance requiring special treatment that prevents
807timely payment from being made on the claim.
808 “Commissioner”, the commissioner of the division of insurance. 39 of 58
809 “Cost-sharing”, any copayment, coinsurance, deductible or any other amount owed by an
810insured under the terms of the insured’s health benefit plan, or as required by a pharmacy benefit
811manager.
812 “Division”, the division of insurance.
813 “Health benefit plan”, as defined in section 1 of chapter 176O.
814 “Independent pharmacy”, a pharmacy registered under section 39 of chapter 112 that is
815under common ownership with not more than 5 other pharmacies.
816 “Insured”, as defined in section 1 of chapter 176O.
817 “Mail-order pharmacy”, a pharmacy whose primary business is to receive prescriptions
818by mail, telefax or through electronic submissions and to dispense medication to insureds
819through the use of the United States mail or other common or contract carrier services.
820 “Net price”, a price for a prescription drug that takes into account all rebates received or
821expected to be received in connection with the dispensing or administration of the prescription
822drug.
823 “Pharmacy”, a facility under the direction or supervision of a registered pharmacist
824authorized to dispense controlled substances under the supervision of a pharmacist registered in
825the commonwealth under section 39 of chapter 112.
826 “Pharmacy benefit management services”, services performed by a pharmacy benefit
827manager, including: (i) negotiating the price of prescription drugs, including negotiating and
828contracting for direct or indirect rebates, discounts or other price concessions; (ii) managing any
829aspects of a prescription drug benefit, including, but not limited to, formulary administration, 40 of 58
830mail and specialty drug pharmacy services, clinical, safety and adherence programs for pharmacy
831service, the processing and payment of claims for prescription drugs, arranging alternative access
832to or funding for prescription drugs, the performance of drug utilization review, the processing of
833drug prior authorization requests, the adjudication of appeals or grievances related to the
834prescription drug benefit, contracting with network pharmacies, controlling the cost of covered
835prescription drugs and managing or providing data relating to the prescription drug benefit or the
836provision of services related thereto; (iii) performance of any administrative, managerial,
837clinical, pricing, financial, reimbursement, data administration or reporting or billing service
838related to a health benefit plan’s prescription drug benefit; and (iv) such other services as the
839division may define in regulation.
840 “Pharmacy benefit manager”, a person, business or other entity that, pursuant to a
841contract or under an employment relationship with a carrier, a self-insurance plan or other third-
842party administrator, either directly or through an intermediary, performs pharmacy benefit
843management services; provided, that “pharmacy benefit manager” shall include a health benefit
844plan sponsor that does not contract with a pharmacy benefit manager and manages its own
845prescription drug benefits unless specifically exempted by the division.
846 “Pharmacy benefit manager network”, a network of pharmacies or pharmacists that are
847offered an agreement or contract to provide pharmacy services for a pharmacy benefit manager
848or health benefit plan.
849 “Rebate”, any: (i) negotiated price concessions, whether described as a rebate or
850otherwise, including, but not limited to, base price concessions and reasonable estimates of any
851price protection rebates and performance-based price concessions that may accrue, directly or 41 of 58
852indirectly, to a carrier, pharmacy benefit manager or other party on a carrier’s behalf during a
853carrier’s plan year from a pharmaceutical manufacturing company, dispensing pharmacy or other
854party to the transaction based on the amounts the carrier received in the prior quarter or
855reasonably expects to receive in the current quarter; and (ii) reasonable estimates of any price
856concessions, fees and other administrative costs that are passed through, or are reasonably
857anticipated to be passed through to the carrier, pharmacy benefit manager or other party on the
858carrier’s behalf, and that serve to reduce the carrier’s prescription drug liabilities for the plan
859year based on the amounts the carrier received in the prior quarter or reasonably expects to
860receive in the current quarter.
861 “Spread pricing”, model of prescription drug pricing in which the pharmacy benefits
862manager charges a health benefit plan a contracted price for prescription drugs, and the
863contracted price for the prescription drugs differs from the amount the pharmacy benefits
864manager directly or indirectly pays the pharmacy.
865 “Third-party administrator”, any person that directly or indirectly solicits or effects
866coverage of, underwrites, collects charges or premiums from, arranges alternative access to or
867funding for prescription drugs, or adjusts or settles claims on behalf of residents of the
868commonwealth or residents of another state from offices in this commonwealth, in connection
869with health insurance coverage.
870 Section 2. (a) No person, business or other entity shall establish or operate as a pharmacy
871benefit manager without obtaining a license from the division pursuant to this section. A license
872shall be granted only when the division is satisfied that the entity possesses the necessary
873organization, background expertise and financial integrity to supply the services sought to be 42 of 58
874offered. A pharmacy benefit manager license shall be valid for a period of 3 years and shall be
875renewable for additional 3-year periods. The commissioner shall charge application and renewal
876fees in the amount of $25,000. A license granted pursuant to this section and any rights or
877interests therein shall not be transferable.
878 (b) The division shall develop an application for licensure that includes at least the
879following information: (i) the name of the applicant or pharmacy benefit manager; (ii) the
880address and contact telephone number for the applicant or pharmacy benefit manager; (iii) the
881name and address of the agent of the applicant or pharmacy benefit manager for service of
882process in the commonwealth; and (iv) the name and address of each person with management or
883control over the applicant or pharmacy benefit manager.
884 (c)(1) The division may suspend, revoke or place on probation a pharmacy benefit
885manager license if: (i) the pharmacy benefit manager has engaged in fraudulent activity that is
886found by a court of law to be a violation of state or federal law; (ii) the division receives
887consumer complaints that justify an action under this chapter to protect the safety and interests of
888consumers; (iii) the pharmacy benefit manager fails to pay an application fee for the license; (iv)
889the pharmacy benefit manager fails to comply with a requirement set forth in this chapter; or (v)
890the pharmacy benefit manager fails to comply with reporting requirements of the center for
891health information and analysis under section 10A of chapter 12C.
892 (2) The division shall provide written notice to the pharmacy benefit manager and advise
893in writing of the reason for any suspension, revocation or placement on probation of a pharmacy
894benefit manager license under this chapter. The pharmacy benefit manager may make written
895demand upon the division within 30 days of receipt of such notification for a hearing before the 43 of 58
896division to determine the reasonableness of the division’s action. The hearing shall be held
897pursuant to chapter 30A. The division shall not suspend or cancel a license unless the division
898has first afforded the pharmacy benefit manager an opportunity for a hearing pursuant to said
899chapter 30A.
900 (d) If a person, business or other entity performs the functions of a pharmacy benefit
901manager in violation of this chapter, the person, business or other entity shall be subject to a fine
902of not less than $5,000 per day for each day that the person, business or other entity is found by
903the division to be in violation.
904 (e) A pharmacy benefit manager that violates this chapter or any rule or regulation
905promulgated pursuant to this chapter shall be subject to a fine of not less than $5,000 for each
906violation.
907 Section 3. (a)(1) A pharmacy benefit manager shall have a duty to perform pharmacy
908benefit management services with care, skill, prudence, diligence and professionalism. Such duty
909shall extend to both the insured and the health plan for whom the pharmacy benefit manager is
910performing pharmacy benefit management services.
911 (2) A pharmacy benefit manager interacting with an insured shall have the same duty to
912an insured as the health plan for whom it is performing pharmacy benefit services.
913 (b) A pharmacy benefit manager shall have a duty of good faith and fair dealing with all
914parties with which it interacts in the performance of pharmacy benefit management services.
915 Section 4. (a) A pharmacy benefit manager shall provide a reasonably adequate and
916accessible pharmacy benefit manager network for the provision of prescription drugs, which 44 of 58
917shall provide for convenient patient access to pharmacies within a reasonable distance from a
918patient’s residence.
919 (b) A pharmacy benefit manager shall not deny a pharmacy the opportunity to participate
920in a pharmacy benefit manager network at preferred participation status if the pharmacy is
921willing to accept the terms and conditions that the pharmacy benefit manager has established for
922other pharmacies as a condition of preferred network participation status.
923 (c) A mail-order pharmacy shall not be included in the calculations for determining
924pharmacy benefit manager network adequacy.
925 Section 5. (a) After adjudication of a clean claim for payment made by a pharmacy, a
926pharmacy benefit manager shall not retroactively reduce payment on the claim, either directly or
927indirectly, through an aggregated effective rate, direct or indirect remuneration, quality assurance
928program or otherwise, except if the claim: (i) is found not to be a clean claim during the course
929of a routine audit performed pursuant to an agreement between the pharmacy benefit manager
930and the pharmacy; or (ii) was submitted as a result of fraud, waste, abuse or other intentional
931misconduct.
932 (b) When a pharmacy adjudicates a claim, the reimbursement amount provided to the
933pharmacy by the pharmacy benefit manager shall constitute a final reimbursement amount;
934provided, however, that nothing in this section shall be construed to prohibit any retroactive
935increase in payment to a pharmacy pursuant to a contract between the pharmacy benefit manager
936or a pharmacy.
937 (c) No pharmacy benefit manager shall charge or collect from an insured any cost-sharing
938amount that exceeds the total contracted amount by the pharmacy for which the pharmacy is 45 of 58
939paid. If an insured pays a copayment, the pharmacy shall retain the adjudicated costs and the
940pharmacy benefit manager shall not reduce or recoup the adjudicated cost.
941 Section 6. (a) As used in this section the following words shall, unless the context clearly
942requires otherwise, have the following meanings:
943 “Generically equivalent drug”, a drug that is pharmaceutically and therapeutically
944equivalent to the drug prescribed.
945 “Maximum allowable cost list”, a listing of drugs or other methodology used by a
946pharmacy benefit manager, directly or indirectly, to set the maximum allowable payment to a
947pharmacy for a generic drug.
948 “National Drug Code”, the numerical code assigned to a prescription drug by the United
949States Food and Drug Administration.
950 “Pharmacy acquisition cost”, the net amount a pharmacy paid for a pharmaceutical
951product.
952 “Pharmacy benefit manager affiliate”, a pharmacy that directly or indirectly, through 1 or
953more intermediaries, owns or controls, is owned or controlled by or is under common ownership
954or control with a pharmacy benefits manager.
955 (b) A drug shall not be placed on a maximum allowable cost list unless:
956 (i) the drug is a generically equivalent drug, it is listed as therapeutically equivalent and
957pharmaceutically equivalent A or B rated in the United States Food and Drug Administration's
958most recent version of the Orange Book or Green Book, it has an NR or NA rating by Medi-Span
959or Gold Standard, or it has a similar rating by a nationally recognized reference; 46 of 58
960 (ii) the drug is in stock and available for purchase by each pharmacy in the pharmacy
961benefit manager’s network from wholesale drug distributors licensed under section 36B of
962chapter 112; and
963 (iii) the drug is not obsolete.
964 (c) A pharmacy benefit manager shall:
965 (i) provide access to its maximum allowable cost list to each pharmacy in the pharmacy
966benefit manager’s network that is subject to the maximum allowable cost list;
967 (ii) update its maximum allowable cost list on a timely basis, but not less than once every
9687 calendar days;
969 (iii) provide a process for each pharmacy subject to the maximum allowable cost list to
970receive prompt notification of an update to the maximum allowable cost list; and
971 (iv) provide a reasonable internal grievance process consistent with subsection (d) to
972allow pharmacies to challenge a maximum allowable cost list as not compliant with this section,
973and to challenge reimbursements made under a maximum allowable cost list for a specific drug
974or drugs that are below the pharmacy acquisition cost.
975 (d)(1) A pharmacy benefit manager shall maintain a formal internal grievance process for
976pharmacies, and such formal internal grievance process shall provide for adequate consideration
977and timely resolution of grievances. A pharmacy benefit manager’s internal grievance process
978shall include the following: (i) a dedicated telephone number, email address and website for the
979purpose of submitting a grievance; (ii) the ability to submit a grievance directly to the pharmacy 47 of 58
980benefit manager regarding the pharmacy benefits plan or program; and (iii) the ability to file a
981grievance within not less than 30 business days of the qualifying event.
982 (2) The pharmacy benefit manager shall respond to a grievance within 30 business days
983of receipt of the grievance. If the pharmacy benefit manager determines as a result of the internal
984grievance process that the pharmacy benefit manager’s challenged conduct was not compliant
985with this section, the pharmacy benefit manager shall: (i) provide the pharmacy with the National
986Drug Code upon which the maximum allowable cost was based; (ii) reprocess the claim; (iii)
987reimburse the pharmacy in an amount that is not less than the pharmacy acquisition cost; and (iv)
988to the extent practicable, reprocess claims submitted by similarly situated pharmacies and
989reimburse said pharmacies an amount that is not less than the pharmacy acquisition cost.
990 (3) If the pharmacy benefit manager determines as a result of the internal grievance
991process that the pharmacy benefit manager’s challenged conduct was compliant with this section,
992the pharmacy benefit manager shall: (i) provide the pharmacy with the National Drug Code upon
993which the maximum allowable cost was based and the name of any wholesale drug distributors
994licensed under section 36B of chapter 112 that have the drug currently in stock at a price below
995the maximum allowable cost; or (ii) if the National Drug Code provided by the pharmacy benefit
996manager is not available at a price below the pharmacy acquisition cost from the wholesale drug
997distributor from whom the pharmacy purchases the majority of its prescription drugs for resale,
998then the pharmacy benefit manager shall adjust the maximum allowable cost as listed on the
999maximum allowable cost list above the challenging pharmacy's pharmacy acquisition cost, and
1000permit the pharmacy to reverse and rebill each claim affected by the inability to procure the drug
1001at a cost that is equal to or less than the challenged maximum allowable cost. 48 of 58
1002 (e) A pharmacy benefit manager shall not reimburse an independent pharmacy an amount
1003less than the amount that the pharmacy benefit manager reimburses a pharmacy benefit manager
1004affiliate for providing the same pharmacist services. The reimbursement amount shall be
1005calculated on a per unit basis using the same Medi-Span generic product identifier or First
1006DataBank generic code number.
1007 (f) A violation of this section shall constitute an unfair or deceptive act or practice under
1008chapter 93A.
1009 Section 7. (a) No pharmacy benefit manager or carrier may, either directly or indirectly
1010through an intermediary, agent or affiliate, engage in spread pricing. A pharmacy benefit
1011manager or carrier that violates this section shall be subject to the surcharge under section 8. A
1012carrier shall be jointly responsible to pay the surcharge amount for violations of this section by
1013its contracted pharmacy benefit manager.
1014 (b) A pharmacy benefit manager shall report to the commissioner on a quarterly basis, for
1015each health benefit plan with which it contracts, the data required to be collected by the center
1016for health information and analysis pursuant to section 10A of chapter 12C.
1017 Section 8. (a) A pharmacy benefit manager or carrier shall be subject to a surcharge
1018payable to the division equal to 10 per cent of the aggregate dollar amount of reimbursements
1019paid by the pharmacy benefit manager or carrier to pharmacies in the previous contract year for
1020prescription drugs in the commonwealth if the pharmacy benefit manager or carrier: (i) engages
1021in spread pricing; or (ii) imposes point-of-sale fees or retroactive fees. 49 of 58
1022 (b) A pharmacy benefit manager or carrier subject to enforcement action by the division
1023for a violation of this section shall, upon the filing of a written request with the division, be
1024afforded an adjudicatory hearing pursuant to chapter 30A.
1025 Section 9. (a) When calculating an insured’s contribution to any applicable cost-sharing
1026requirement, a carrier shall include any cost-sharing amounts paid by the insured or on behalf of
1027the insured by another person. If under federal law, application of this requirement would result
1028in health savings account ineligibility under section 223 of the federal Internal Revenue Code,
1029this requirement shall apply for health savings account-qualified high deductible health plans
1030with respect to the deductible of such a plan after the insured has satisfied the minimum
1031deductible under section 223 of the federal Internal Revenue Code, except for with respect to
1032items or services that are preventive care pursuant to section 223(c)(2)(C) of the federal Internal
1033Revenue Code, in which case the requirements of this paragraph shall apply regardless of
1034whether the minimum deductible under section 223 has been satisfied.
1035 (b) A carrier, pharmacy benefit manager or third-party administrator shall not directly or
1036indirectly set, alter, implement or condition the terms of health benefit plan coverage, including
1037the benefit design, based in part or entirely on information about the availability or amount of
1038financial or product assistance available for a prescription drug.
1039 (c) The division may promulgate such rules and regulations as it may deem necessary to
1040implement this section.
1041 Section 10. (a)(1) A pharmacy benefit manager shall conduct an audit of the records of a
1042pharmacy with which it contracts. 50 of 58
1043 (2) The contract between a pharmacy and a pharmacy benefit manager shall identify and
1044describe the audit procedures in detail.
1045 (3) With the exception of an investigative fraud audit, the auditor shall give the pharmacy
1046written notice not less than 2 weeks prior to conducting the initial on-site audit for each audit
1047cycle.
1048 (4) A pharmacy benefit manager shall not audit claims beyond 2 years prior to the date of
1049audit.
1050 (5) The auditor shall not interfere with the delivery of pharmacist services to a patient and
1051shall make a reasonable effort to minimize the inconvenience and disruption to the pharmacy
1052operations during the audit process.
1053 (6) Any audit that involves clinical or professional judgment shall be conducted by, or in
1054consultation with, a licensed pharmacist from any state.
1055 (7) A finding of an overpayment or underpayment shall be based on the actual
1056overpayment or underpayment. A statistically sound calculation for overpayment or
1057underpayment may be used to determine recoupment as part of a settlement as agreed to by the
1058pharmacy.
1059 (8) The auditor shall audit each pharmacy under the same standards and parameters with
1060which they audit other similarly situated pharmacies.
1061 (9) An audit shall not be initiated or scheduled during the first 5 calendar days of any
1062month for any pharmacy that averages more than 600 prescriptions per week without the
1063pharmacy’s consent. 51 of 58
1064 (10) A preliminary audit report shall be delivered to the pharmacy not later than 30 days
1065after the conclusion of the audit.
1066 (11) The preliminary audit report shall be signed and shall include the signature of any
1067pharmacist participating in the audit.
1068 (12) A pharmacy benefit manager shall not withhold payment to a pharmacy for
1069reimbursement claims as a means to recoup money until after the final internal disposition of an
1070audit, including the appeals process, as provided in subsection (b), unless fraud or
1071misrepresentation is reasonably suspected or the discrepant amount exceeds $15,000.
1072 (13) The auditor shall provide a copy of the final audit report to the pharmacy and plan
1073sponsor within 30 days following the pharmacy’s receipt of the signed preliminary audit report
1074or the completion of the appeals process, as provided in subsection (b), whichever is later.
1075 (14) No auditing company or agent shall receive payment based upon a percentage of the
1076amount recovered or other financial incentive tied to the findings of the audit.
1077 (b)(1) Each auditor shall establish an appeal process under which a pharmacy may appeal
1078findings in a preliminary audit.
1079 (2) To appeal a finding, a pharmacy may use the records of a hospital, physician or other
1080authorized prescriber to validate the record with respect to orders or refills of prescription drugs
1081or devices.
1082 (3) A pharmacy shall have 30 days to appeal any discrepancy found during the
1083preliminary audit. 52 of 58
1084 (4) The National Council for Prescription Drug Programs or any other recognized
1085national industry standard shall be used to evaluate claims submission and product size disputes.
1086 (5) If an audit results in the identification of any clerical or record-keeping errors in a
1087required document or record, the pharmacy shall not be subject to recoupment of funds by the
1088pharmacy benefit manager; provided, that the pharmacy may provide proof that the patient
1089received the medication billed to the plan via patient signature logs or other acceptable methods,
1090unless there is financial harm to the plan or errors that exceed the normal course of business.
1091 (c) This section shall not apply to any audit or investigation of a pharmacy that involves
1092potential fraud, willful misrepresentation or abuse, including, but not limited to, investigative
1093audits or any other statutory or regulatory provision which authorizes investigations relating to
1094insurance fraud.
1095 (d) This section shall not apply to a public health care payer, as defined in section 1 of
1096chapter 12C.
1097 (e) The commissioner shall promulgate regulations to enforce this section.
1098 Section 11. (a) The commissioner may make an examination of the affairs of a pharmacy
1099benefit manager when the commissioner deems prudent, but not less than once every 3 years.
1100The focus of the examination shall be to ensure that a pharmacy benefit manager is able to meet
1101its responsibilities under contracts with carriers. The examination shall be conducted in
1102accordance with subsection (6) of section 4 of chapter 175. 53 of 58
1103 (b) The commissioner, a deputy or an examiner may conduct an on-site examination of
1104each pharmacy benefit manager in the commonwealth to thoroughly inspect and examine its
1105affairs.
1106 (c) The charge for each such examination shall be determined annually in accordance
1107with subsection (6) of section 4 of chapter 175.
1108 (d) Not later than 60 days following completion of the examination, the examiner in
1109charge shall file with the commissioner a verified written report of examination under oath.
1110Upon receipt of the verified report, the commissioner shall transmit the report to the pharmacy
1111benefit manager examined with a notice that shall afford the pharmacy benefit manager
1112examined a reasonable opportunity of not more than 30 days to make a written submission or
1113rebuttal with respect to any matters contained in the examination report. Not later than 30 days
1114after the end of the period allowed for the receipt of written submissions or rebuttals, the
1115commissioner shall consider and review the reports together with any written submissions or
1116rebuttals and any relevant portions of the examiner’s work papers and enter an order:
1117 (i) adopting the examination report as filed with modifications or corrections and, if the
1118examination report reveals that the pharmacy benefit manager is operating in violation of this
1119section or any regulation or prior order of the commissioner, the commissioner may order the
1120pharmacy benefit manager to take any action the commissioner considers necessary and
1121appropriate to cure such violation;
1122 (ii) rejecting the examination report with directions to the examiners to reopen the
1123examination for the purposes of obtaining additional data, documentation or information and re-
1124filing pursuant to the above provisions; or 54 of 58
1125 (iii) calling for an investigatory hearing with no less than 20 days’ notice to the pharmacy
1126benefit manager for purposes of obtaining additional documentation, data, information and
1127testimony.
1128 (e) Notwithstanding any general or special law to the contrary, including clause Twenty-
1129sixth of section 7 of chapter 4 and section 10 of chapter 66, the records of any such examination
1130and the information contained in the records, reports or books of any pharmacy benefit manager
1131examined pursuant to this section shall be confidential and open only to the inspection of the
1132commissioner, or the examiners and assistants. Access to such confidential material may be
1133granted by the commissioner to law enforcement officials of the commonwealth or any other
1134state or agency of the federal government at any time, so long as the agency or office receiving
1135the information agrees in writing to keep such material confidential. Nothing herein shall be
1136construed to prohibit the required production of such records and information contained in the
1137reports of such company or organization before any court of the commonwealth or any master or
1138auditor appointed by any such court, in any criminal or civil proceeding, affecting such
1139pharmacy benefit manager, its officers, partners, directors or employees. The final report of any
1140such audit, examination or any other inspection by or on behalf of the division of insurance shall
1141be a public record.
1142 Section 12. A pharmacy benefit manager shall be required to submit to periodic audits by
1143a licensed carrier if the pharmacy benefit manager has entered into a contract with the carrier to
1144provide pharmacy benefits to the carrier or its members. The commissioner shall direct or
1145provide specifications for such audits. 55 of 58
1146 Section 13. (a) A contract between a pharmacy benefit manager and a pharmacy shall not
1147include any provision that prohibits, restricts or limits a pharmacy or its employed pharmacists’
1148ability to provide an insured with information on the amount of the insured’s cost-sharing for
1149such insured’s prescription drug and the clinical efficacy of a more affordable alternative drug if
1150one is available. No contract shall penalize a pharmacy or an individual pharmacist for disclosing
1151such information to an insured or for dispensing to an insured a more affordable alternative
1152prescription drug if one is available.
1153 (b) A pharmacy benefit manager shall not charge a pharmacy a fee related to the
1154adjudication of a claim unless such fee is set out in a contract between the pharmacy benefit
1155manager and the pharmacist or contracting agent or pharmacy, including, but not limited to, a fee
1156for: (i) the receipt and processing of a pharmacy claim; (ii) the development or management of
1157claims processing services in a pharmacy benefit manager network; or (iii) participation in a
1158pharmacy benefit manager network.
1159 (c) A contract between a pharmacy benefit manager and a pharmacy shall not include any
1160provision that prohibits, restricts or limits disclosure of information to the division deemed
1161necessary by the division to ensure a pharmacy benefit manager’s compliance with the
1162requirements under this section or section 21C of chapter 94C.
1163 SECTION 37. Sections 131 and 226 of chapter 139 of the acts of 2012 are hereby
1164repealed.
1165 SECTION 38. (a) Notwithstanding any general or special law to the contrary, the office
1166of pharmaceutical policy and analysis, in consultation with the office of Medicaid, shall conduct
1167an analysis and issue a report on the future of cell and gene therapy in the commonwealth with 56 of 58
1168the objective of addressing anticipated barriers to access that may exist with respect to such
1169treatments for patients covered by MassHealth programs and other vulnerable populations. The
1170analysis shall be focused on cell and gene therapy products, hereinafter referred to as products,
1171that are expected to come to market in the United States by the year 2035. The analysis and
1172report shall include, but not be limited to:
1173 (i) a projection of the estimated total number of products that are expected to come to
1174market in the United States;
1175 (ii) information on the diseases and conditions such products will be approved to treat,
1176including the total estimated number of impacted individuals in the commonwealth and the total
1177number of impacted individuals enrolled in MassHealth;
1178 (iii) an assessment of anticipated costs of coverage and existing reimbursement
1179frameworks and methodologies that may be employed by MassHealth for the products to the
1180extent the products are purchased by health care facilities for administration to MassHealth
1181beneficiaries during inpatient hospital stays;
1182 (iv) an assessment of whether the reimbursement frameworks and methodologies
1183identified pursuant to clause (iii) would lead to barriers to access to the products in light of the
1184projected costs to the health care system associated with the utilization of the products, and
1185whether such barriers to access, if any, would disproportionately impact MassHealth
1186beneficiaries or other vulnerable populations, including population groups that may be more
1187likely to have adverse health outcomes due to experience with historic disparities or
1188discrimination; and 57 of 58
1189 (v) an assessment of whether the current health care facility infrastructure necessary for
1190the administration of the products is adequate to ensure equitable access for patients in need of
1191treatment with the products.
1192 (b) To the extent that the analysis identifies any barriers to access to the products, the
1193office of pharmaceutical policy and analysis and the office of Medicaid shall analyze and report
1194on the reasons for such barriers and shall propose corrective policy solutions. If any identified
1195barriers are the result of or otherwise related to current MassHealth reimbursement
1196methodologies for the products, the report shall propose modifications designed to eliminate
1197such barriers to such methodologies to the extent authorized under federal law.
1198 (c) In conducting the analysis and producing the report required by this section, the health
1199office of pharmaceutical policy and analysis and the office of Medicaid shall consult with the
1200Massachusetts Biotechnology Council, Inc., the Massachusetts Health and Hospital Association,
1201Inc., the Conference of Boston Teaching Hospitals, Inc., the Massachusetts Association of
1202Health Plans, Inc., Blue Cross and Blue Shield of Massachusetts, Inc. and the rare disease
1203advisory council established pursuant to section 241 of chapter 111.
1204 (d) The report shall be made available electronically on the commission’s website and
1205shall be filed with the secretary of administration and finance, the clerks of the house of
1206representatives and the senate, the house and senate committees on ways and means and the joint
1207committee on health care financing by not later than July 31, 2025.
1208 SECTION 39. Section 17T of chapter 32A of the General Laws, inserted by section 27;
1209section 10R of chapter 118E of the General Laws, inserted by section 29; section 47VV of 175 of
1210the General Laws, inserted by section 30; section 8WW of 176A of the General Laws, inserted 58 of 58
1211by section 32; section 4WW of 176B of the General Laws, inserted by section 33; and section
12124OO of chapter 176G of the General Laws, inserted by section 34, shall apply with respect to
1213health benefit plans that are entered into, amended, extended or renewed on or after August 1,
12142025.
1215 SECTION 40. The center shall prepare the list required pursuant to section 10B of
1216chapter 12C, inserted by section 23, not later than March 31, 2026.
1217 SECTION 41. Section 31 of chapter 176O of the General Laws, inserted by section 35,
1218shall take effect on April 1, 2025. All carriers shall file the first annual report required by
1219subsection (d) of said section 31 of said chapter 176O of the General Laws not later than April 1,
12202026.
1221 SECTION 42. All entities performing pharmacy benefit management services shall be
1222licensed by the division of health insurance as pharmacy benefit managers pursuant to section 2
1223of chapter 176Y of the General Laws, inserted by section 36, not later than January 1, 2025.
1224 SECTION 43. Sections 7 to 9, inclusive, of chapter 176Y, inserted by section 36, shall
1225apply with respect to health benefit plans that are entered into, amended, extended or renewed on
1226or after August 1, 2025.; and
1227 by striking out the title and inserting in place thereof the following title: “An Act
1228promoting access and affordability of prescription drugs.”.