Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S2492 Compare Versions

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1	1	SENATE . . . . . . . . . . . . . . No. 2492
2	2	The Commonwealth of Massachusetts
3	3	_______________
4	4	In the One Hundred and Ninety-Third General Court
5	5	(2023-2024)
6	6	_______________
7	7	SENATE, October 30, 2023.
8	8	The committee on Health Care Financing, to whom was referred the petitions
9	9	(accompanied by bill, Senate, No. 732) of John J. Cronin for legislation to promote
10	10	comprehensive transparency in the pharmaceutical industry; (accompanied by bill, Senate, No.
11	11	749) of Cindy F. Friedman, Rebecca L. Rausch, Susannah M. Whipps, Joanne M. Comerford
12	12	and other members of the General Court for legislation relative to pharmaceutical access, costs
13	13	and transparency; (accompanied by bill, Senate, No. 767) of Jason M. Lewis for legislation to
14	14	define modest meals and refreshments in prescriber education settings; (accompanied by bill,
15	15	Senate, No. 778) of Paul W. Mark for legislation to bring down the cost of prescription drugs;
16	16	(accompanied by bill, Senate, No. 783) of Mark C. Montigny and Michael J. Barrett for
17	17	legislation to promote transparency and prevent price gouging of pharmaceutical drug prices;
18	18	(accompanied by bill, Senate, No. 784) of Mark C. Montigny for legislation relative to coverage
19	19	for chronic illness; (accompanied by bill, Senate, No. 797) of Jacob R. Oliveira for legislation to
20	20	bring down the cost of prescription drugs; (accompanied by bill, House, No. 619) of Nicholas A.
21	21	Boldyga relative to establishing a prescription drug rebate program for seniors; (accompanied by
22	22	bill, House, No. 1176) of Edward F. Coppinger and others relative to promoting comprehensive
23	23	transparency in the pharmaceutical industry; (accompanied by bill, House, No. 1201) of Kate
24	24	Hogan relative to the pricing of prescription drugs; (accompanied by bill, House, No. 1205) of
25	25	Bradley H. Jones, Jr., and others that the Health Policy Commission and health insurers create
26	26	listings of certain high cost prescription drugs and that the Attorney General require drug
27	27	manufacturers to provide information to justify increases in costs; (accompanied by bill, House,
28	28	No. 1206) of Bradley H. Jones, Jr., and others for an investigation by a special commission
29	29	(including members of the General Court) relative to contracts between the MassHealth program
30	30	and pharmaceutical benefit managers; (accompanied by bill, House, No. 1215) of John J. Lawn,
31	31	Jr., and others relative to pharmacy benefit managers; (accompanied by bill, House, No. 1246) of
32	32	William M. Straus relative to drug prices paid by carriers; and (accompanied by bill, House, No.
33	33	1247) of Alyson M. Sullivan-Almeida, Michael J. Soter and David F. DeCoste relative to
34	34	pharmacy benefit managers reimbursements to pharmacies in the Commonwealth, reports the
35	35	accompanying bill (Senate, No. 2492). For the committee,
36	36	Cindy F. Friedman 1 of 77
37	37	FILED ON: 10/27/2023
38	38	SENATE . . . . . . . . . . . . . . No. 2492
39	39	The Commonwealth of Massachusetts
40	40	_______________
41	41	In the One Hundred and Ninety-Third General Court
42	42	(2023-2024)
43	43	_______________
44	44	An Act relative to pharmaceutical access, costs and transparency.
45	45	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
46	46	of the same, as follows:
47	47	1 SECTION 1. Chapter 6A of the General Laws is hereby amended by adding the
48	48	2following section:-
49	49	3 Section 16DD. (a) The following terms shall have the following meanings, unless the
50	50	4context clearly requires otherwise:
51	51	5 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
52	52	6drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an
53	53	7application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
54	54	8is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
55	55	9Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
56	56	10application that was approved by the United States Secretary of Health and Human Services
57	57	11under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the 2
58	58	12of 53 date of the enactment of the federal Drug Price Competition and Patent Term Restoration
59	59	13Act of 1984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 2 of 77
60	60	1442 C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application
61	61	15approved under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand
62	62	16name drug based on available data resources such as Medi-Span.
63	63	17 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
64	64	18abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
65	65	19drug as defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
66	66	20and was not originally marketed under a new drug application; or (iv) identified by the health
67	67	21benefit plan as a generic drug based on available data resources such as Medi-Span.
68	68	22 (b) Notwithstanding any general or special law to the contrary, there shall be a drug
69	69	23access program, administered by the executive office of health and human services, for the
70	70	24purpose of enhancing access to targeted high-value medications used to treat certain chronic
71	71	25conditions. To implement the drug access program, the secretary of health and human services,
72	72	26in consultation with the department of public health, the division of insurance, the health policy
73	73	27commission, and the center for health information and analysis, shall identify one generic drug
74	74	28and one brand name drug used to treat each of the following chronic conditions: (i) diabetes; (ii)
75	75	29asthma; and (iii) heart conditions, including, but not limited to, hypertension and coronary artery
76	76	30disease. In determining the one generic drug and one brand name drug used to treat each chronic
77	77	31condition, the secretary shall consider whether the drug is:
78	78	32 (1) of clear benefit and strongly supported by clinical evidence to be cost-effective;
79	79	33 (2) likely to reduce hospitalizations or emergency department visits, or reduce future
80	80	34exacerbations of illness progression, or improve quality of life; 3 of 77
81	81	35 (3) relatively low cost when compared to the cost of an acute illness or incident prevented
82	82	36or delayed by the use of the service, treatment or drug;
83	83	37 (4) at low risk for overutilization, abuse, addiction, diversion or fraud; and
84	84	38 (5) widely utilized as a treatment for the chronic condition.
85	85	39 (c) The secretary of health and human services shall identify insulin as the drug used to
86	86	40treat diabetes under the drug access program.
87	87	41 (d) Every two years, the secretary of health and human services, in consultation with the
88	88	42health policy commission, the center for health information and analysis and the division of
89	89	43insurance, shall evaluate the impact of the drug access program established in this section on
90	90	44drug treatment adherence, incidence of related acute events, premiums and cost-sharing, overall
91	91	45health, long-term health costs, and any other issues that the secretary may deem relevant. The
92	92	46secretary may collaborate with an independent research organization to conduct such evaluation.
93	93	47The secretary shall file a report of its findings with the clerks of the house of representatives and
94	94	48senate, the chairs of the joint committee on public health, the chairs of the joint committee on
95	95	49health care financing and the chairs of house and senate committees on ways and means.
96	96	50 (e) The secretary, in consultation with the division of insurance, shall promulgate rules
97	97	51and regulations necessary to implement this section.
98	98	52 SECTION 2. Section 1 of chapter 6D of the General Laws, as appearing in the 2020
99	99	53Official Edition, is hereby amended by inserting after the definition of “Alternative payment
100	100	54methodologies or methods” the following 2 definitions:- 4 of 77
101	101	55 “Biosimilar”, a drug that is produced or distributed pursuant to a biologics license
102	102	56application approved under 42 U.S.C. 262(k)(3).
103	103	57 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
104	104	58drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an
105	105	59application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
106	106	60is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
107	107	61Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
108	108	62application that was approved by the United States Secretary of Health and Human Services
109	109	63under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
110	110	64date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
111	111	651984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 42
112	112	66C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
113	113	67under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
114	114	68based on available data resources such as Medi-Span.
115	115	69 SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further
116	116	70amended by inserting after the definition of “Disproportionate share hospital” the following
117	117	71definition:-
118	118	72 “Early notice”, advanced notification by a pharmaceutical manufacturing company of a:
119	119	73(i) new drug, device or other development coming to market; or (ii) a price increase, as described
120	120	74in subsection (b) of section 15A.
121	121	75 SECTION 4. Said section 1 of said chapter 6D, as so appearing, is hereby further
122	122	76amended by inserting after the definition of “Fiscal year” the following definition:- 5 of 77
123	123	77 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
124	124	78abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
125	125	79drug as defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
126	126	80and was not originally marketed under a new drug application; or (iv) identified by the health
127	127	81benefit plan as a generic drug based on available data resources such as Medi-Span.
128	128	82 SECTION 5. Said section 1 of said chapter 6D, as so appearing, is hereby further
129	129	83amended by striking out, in line 189, the words “not include excludes ERISA plans” and
130	130	84inserting in place thereof the following words:- include self-insured plans to the extent allowed
131	131	85under the federal Employee Retirement Income Security Act of 1974.
132	132	86 SECTION 6. Said section 1 of said chapter 6D, as so appearing, is hereby further
133	133	87amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
134	134	88 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
135	135	89preparation, propagation, compounding, conversion or processing of prescription drugs, directly
136	136	90or indirectly, by extraction from substances of natural origin, independently by means of
137	137	91chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
138	138	92repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
139	139	93“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
140	140	94under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
141	141	95chapter 112.
142	142	96 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
143	143	97directly or through a subsidiary provides pharmacy benefit management services for prescription
144	144	98drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self- 6 of 77
145	145	99insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
146	146	100management services shall include, but not be limited to: (i) the processing and payment of
147	147	101claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
148	148	102of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
149	149	103grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
150	150	104drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
151	151	105clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
152	152	106covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
153	153	107health benefit plan that does not contract with a pharmacy benefit manager and manages its own
154	154	108prescription drug benefits unless specifically exempted by the commission.
155	155	109 SECTION 7. Said section 1 of said chapter 6D, as so appearing, is hereby further
156	156	110amended by inserting after the definition of “Physician” the following definition:-
157	157	111 “Pipeline drug”, a prescription drug product containing a new molecular entity for which
158	158	112the sponsor has submitted a new drug application or biologics license application and received an
159	159	113action date from the United States Food and Drug Administration.
160	160	114 SECTION 8. Said section 1 of said chapter 6D, as so appearing, is hereby further
161	161	115amended by adding the following definition:-
162	162	116 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
163	163	1171395w-3a(c)(6)(B).
164	164	118 SECTION 9. Said chapter 6D is hereby further amended by striking out section 2A, as so
165	165	119appearing, and inserting in place thereof the following section:- 7 of 77
166	166	120 Section 2A. The commission shall keep confidential all nonpublic clinical, financial,
167	167	121strategic or operational documents or information provided or reported to the commission in
168	168	122connection with any care delivery, quality improvement process, performance improvement
169	169	123plan, early notification or access and affordability improvement plan activities authorized under
170	170	124sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under section 2GGGG of chapter 29 and
171	171	125shall not disclose the information or documents to any person without the consent of the payer,
172	172	126provider or pharmaceutical manufacturing company providing or reporting the information or
173	173	127documents under said sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under said section
174	174	1282GGGG of said chapter 29, except in summary form in evaluative reports of such activities or
175	175	129when the commission believes that such disclosure should be made in the public interest after
176	176	130taking into account any privacy, trade secret or anticompetitive considerations. The confidential
177	177	131information and documents shall not be public records and shall be exempt from disclosure
178	178	132under clause Twenty-sixth of section 7 of chapter 4 or under chapter 66.
179	179	133 SECTION 10. Section 4 of said chapter 6D, as so appearing, is hereby amended by
180	180	134striking out, in lines 7 and 8, the word “manufacturers” and inserting in place thereof the
181	181	135following words:- manufacturing companies, pharmacy benefit managers,.
182	182	136 SECTION 11. Section 6 of said chapter 6D, as so appearing, is hereby amended by
183	183	137inserting after the word “center”, in line 1, the following words:- , pharmaceutical and
184	184	138biopharmaceutical manufacturing company, pharmacy benefit manager.
185	185	139 SECTION 12. Said section 6 of said chapter 6D, as so appearing, is hereby further
186	186	140amended by striking out, in lines 5 and 36, the figure “33” and inserting in place thereof, in each
187	187	141instance, the following figure:- 25. 8 of 77
188	188	142 SECTION 13. Said section 6 of said chapter 6D, as so appearing, is hereby further
189	189	143amended by adding the following paragraph:-
190	190	144 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
191	191	145companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
192	192	146appropriated by the general court for the expenses of the commission minus amounts collected
193	193	147from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
194	194	148dissemination of reports and information; and (iii) federal matching revenues received for these
195	195	149expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical and
196	196	150biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
197	197	151and distribution determined by the commission, pay to the commonwealth an amount of the
198	198	152estimated expenses of the commission attributable to the commission’s activities under sections
199	199	1538, 9, 15A, 20 and 21. A pharmacy benefit manager that is a surcharge payor subject to the
200	200	154preceding paragraph and manages its own prescription drug benefits shall not be subject to
201	201	155additional assessment under this paragraph
202	202	156 SECTION 14. Section 8 of said chapter 6D, as so appearing, is hereby amended by
203	203	157inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
204	204	158manager, pharmaceutical manufacturing company.
205	205	159 SECTION 15. Said section 8 of said chapter 6D, as so appearing, is hereby further
206	206	160amended by inserting after the word “organizations”, in line 14, the following words:- ,
207	207	161pharmacy benefit managers, pharmaceutical manufacturing companies.
208	208	162 SECTION 16. Said section 8 of said chapter 6D, as so appearing, is hereby further
209	209	163amended by striking out, in line 32, the words “and (xi)” and inserting in place thereof the 9 of 77
210	210	164following words:- (xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least
211	211	1651 representative of the pharmacy benefit management industry; and (xiii).
212	212	166 SECTION 17. Said section 8 of said chapter 6D, as so appearing, is hereby further
213	213	167amended by striking out, in line 48, the first time it appears, the word “and”.
214	214	168 SECTION 18. Said section 8 of said chapter 6D, as so appearing, is hereby further
215	215	169amended by inserting after the word “commission”, in line 59, the first time it appears, the
216	216	170following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
217	217	171manufacturing companies, testimony concerning factors underlying prescription drug costs and
218	218	172price increases including, but not limited to, the initial prices of drugs coming to market and
219	219	173subsequent price increases, changes in industry profit levels, marketing expenses, reverse
220	220	174payment patent settlements, the impact of manufacturer rebates, discounts and other price
221	221	175concessions on net pricing, the availability of alternative drugs or treatments and any other
222	222	176matters as determined by the commission.
223	223	177 SECTION 19. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
224	224	178hereby amended by striking out the second sentence and inserting in place thereof the following
225	225	1792 sentences:-
226	226	180 The report shall be based on the commission’s analysis of information provided at the
227	227	181hearings by witnesses, providers, provider organizations, payers, pharmaceutical manufacturing
228	228	182companies and pharmacy benefit managers, registration data collected under section 11, data
229	229	183collected or analyzed by the center under sections 8, 9, 10 and 10A of chapter 12C and any other
230	230	184available information that the commission considers necessary to fulfill its duties under this
231	231	185section as defined in regulations promulgated by the commission. To the extent practicable, the 10 of 77
232	232	186report shall not contain any data that is likely to compromise the financial, competitive or
233	233	187proprietary nature of the information.
234	234	188 SECTION 20. Section 9 of said chapter 6D, as so appearing, is hereby amended by
235	235	189inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
236	236	190manager, pharmaceutical manufacturing company.
237	237	191 SECTION 21. Said chapter 6D is hereby further amended by inserting after section 15
238	238	192the following section:-
239	239	193 Section 15A. (a) A pharmaceutical manufacturing company shall provide early notice to
240	240	194the commission in a manner described in this section for a: (i) pipeline drug; (ii) generic drug; or
241	241	195(iii) biosimilar drug. The commission shall provide non-confidential information received under
242	242	196this section to the office of Medicaid, the division of insurance and the group insurance
243	243	197commission.
244	244	198 Early notice under this subsection shall be submitted to the commission in writing not
245	245	199later than 30 days after receipt of the United States Food and Drug Administration approval date.
246	246	200 For each pipeline drug, early notice shall include a brief description of the: (i) primary
247	247	201disease, health condition or therapeutic area being studied and the indication; (ii) route of
248	248	202administration being studied; (iii) clinical trial comparators; and (iv) estimated date of market
249	249	203entry. To the extent possible, information shall be collected using data fields consistent with
250	250	204those used by the federal National Institutes of Health for clinical trials.
251	251	205 For each pipeline drug, early notice shall include whether the drug has been designated
252	252	206by the United States Food and Drug Administration: (i) as an orphan drug; (ii) for fast track; (iii) 11 of 77
253	253	207as a breakthrough therapy; (iv) for accelerated approval; or (v) for priority review for a new
254	254	208molecular entity; provided, however, that notwithstanding clause (v), submissions for drugs in
255	255	209development that are designated as new molecular entities by the United States Food and Drug
256	256	210Administration shall be provided as soon as practical upon receipt of the relevant designations.
257	257	211For each generic drug, early notice shall include a copy of the drug label approved by the United
258	258	212States Food and Drug Administration.
259	259	213 (b) A pharmaceutical manufacturing company shall provide early notice to the
260	260	214commission if it plans to increase the wholesale acquisition cost of a: (i) brand-name drug by
261	261	215more than 15 per cent per wholesale acquisition cost unit during any 12-month period; or (ii)
262	262	216generic drug with a significant price increase as determined by the commission during any 12-
263	263	217month period. The commission shall provide non-confidential information received under this
264	264	218section to the office of Medicaid, the division of insurance and the group insurance commission.
265	265	219 Early notice under this subsection shall be submitted to the commission in writing not
266	266	220less than 60 days before the planned effective date of the increase.
267	267	221 A pharmaceutical manufacturing company required to notify the commission of a price
268	268	222increase under this subsection shall, not less than 30 days before the planned effective date of the
269	269	223increase, report to the commission any information regarding the price increase that is relevant to
270	270	224the commission including, but not limited to: (i) drug identification information; (ii) drug sales
271	271	225volume information; (iii) wholesale price and related information for the drug; (iv) net price and
272	272	226related information for the drug; (v) drug acquisition information, if applicable; (vi) revenue
273	273	227from the sale of the drug; and (vii) manufacturer costs. 12 of 77
274	274	228 (c) The commission shall conduct an annual study of pharmaceutical manufacturing
275	275	229companies subject to the requirements in subsections (a) and (b). The commission may contract
276	276	230with a third-party entity to implement this section.
277	277	231 (d) Notwithstanding any general or special law to the contrary, information provided
278	278	232under this section shall be protected as confidential and shall not be a public record under clause
279	279	233Twenty-sixth of section 7 of chapter 4 or under chapter 66.
280	280	234 (e) If a pharmaceutical manufacturing company fails to timely comply with the
281	281	235requirements under subsection (a) or subsection (b), or otherwise knowingly obstructs the
282	282	236commission’s ability to receive early notice under this section, including, but not limited to,
283	283	237providing incomplete, false or misleading information, the commission may impose appropriate
284	284	238sanctions against the manufacturer, including reasonable monetary penalties not to exceed
285	285	239$500,000, in each instance. The commission shall seek to promote compliance with this section
286	286	240and shall only impose a civil penalty on the manufacturer as a last resort. Amounts collected
287	287	241under this section shall be deposited into the Prescription Drug Cost Assistance Trust Fund
288	288	242established in section 2RRRRR of chapter 29.
289	289	243 SECTION 22. Said chapter 6D is hereby further amended by adding the following 2
290	290	244sections:-
291	291	245 Section 20. (a) As used in this section, the following words shall have the following
292	292	246meanings unless the context clearly requires otherwise:
293	293	247 “Eligible drug”, (i) a brand name drug or biologic, not including a biosimilar, that has a
294	294	248launch wholesale acquisition cost of $50,000 or more for a 1-year supply or full course of
295	295	249treatment; (ii) a biosimilar drug that has a launch wholesale acquisition cost that is not at least 15 13 of 77
296	296	250per cent lower than the referenced brand biologic at the time the biosimilar is launched; (iii) a
297	297	251public health essential drug, as defined in subsection (f) of section 13 of chapter 17, with a
298	298	252significant price increase over a defined period of time as determined by the commission by
299	299	253regulation or with a wholesale acquisition cost of $25,000 or more for a 1-year supply or full
300	300	254course of treatment; or (iv) other prescription drug products that may have a direct and
301	301	255significant impact and create affordability challenges for the state’s health care system and
302	302	256patients, as determined by the commission; provided, however, that the commission shall
303	303	257promulgate regulations to establish the type of prescription drug products classified under clause
304	304	258(iv) prior to classification of any such prescription drug product under said clause (iv).
305	305	259 “Manufacturer”, a pharmaceutical manufacturer of an eligible drug.
306	306	260 “Public health essential drug”, shall have the same meaning as defined in subsection (f)
307	307	261of section 13 of chapter 17.
308	308	262 (b) The commission shall review the impact of eligible drug costs on patient access;
309	309	263provided, however, that the commission may prioritize the review of eligible drugs based on
310	310	264potential impact to consumers.
311	311	265 In order to conduct a review of eligible drugs, the commission may require a
312	312	266manufacturer to disclose to the commission within a reasonable time period information relating
313	313	267to the manufacturer’s pricing of an eligible drug. The disclosed information shall be on a
314	314	268standard reporting form developed by the commission with the input of the manufacturers and
315	315	269shall include, but not be limited to:
316	316	270 (i) a schedule of the drug’s wholesale acquisition cost increases over the previous 5
317	317	271calendar years; 14 of 77
318	318	272 (ii) the manufacturer’s aggregate, company-level research and development and other
319	319	273relevant capital expenditures, including facility construction, for the most recent year for which
320	320	274final audited data are available;
321	321	275 (iii) a narrative description, absent proprietary information and written in plain language,
322	322	276of factors that contributed to reported changes in wholesale acquisition cost during the previous 5
323	323	277calendar years; and
324	324	278 (iv) any other information that the manufacturer wishes to provide to the commission or
325	325	279that the commission requests.
326	326	280 (c) Based on the records furnished under subsection (b) and available information from
327	327	281the center for health information and analysis or an outside third party, the commission shall
328	328	282identify a proposed value for the eligible drug. The commission may request additional relevant
329	329	283information that it deems necessary.
330	330	284 Any information, analyses or reports regarding an eligible drug review shall be provided
331	331	285to the manufacturer. The commission shall consider any clarifications or data provided by the
332	332	286manufacturer with respect to the eligible drug. The commission shall not base its determination
333	333	287on the proposed value of the eligible drug solely on the analysis or research of an outside third
334	334	288party and shall not employ a measure or metric that assigns a reduced value to the life extension
335	335	289provided by a treatment based on a pre-existing disability or chronic health condition of the
336	336	290individuals whom the treatment would benefit. If the commission relies upon a third party to
337	337	291provide cost-effectiveness analysis or research related to the proposed value of the eligible drug,
338	338	292such analysis or research shall also include, but not be limited to: (i) a description of the
339	339	293methodologies and models used in its analysis; (ii) any assumptions and potential limitations of 15 of 77
340	340	294research findings in the context of the results; and (iii) outcomes for affected subpopulations that
341	341	295utilize the drug, including, but not limited to, potential impacts on individuals of marginalized
342	342	296racial or ethnic groups, and on individuals with specific disabilities or health conditions who
343	343	297regularly utilize the eligible drug.
344	344	298 (d) If, after review of an eligible drug and after receiving information from the
345	345	299manufacturer under subsection (b) or subsection (e), the commission determines that the
346	346	300manufacturer’s pricing of the eligible drug does not substantially exceed the proposed value of
347	347	301the drug, the commission shall notify the manufacturer, in writing, of its determination and shall
348	348	302evaluate other ways to mitigate the eligible drug’s cost in order to improve patient access to the
349	349	303eligible drug. The commission may engage with the manufacturer and other relevant
350	350	304stakeholders, including, but not limited to, patients, patient advocacy organizations, consumer
351	351	305advocacy organizations, providers, provider organizations and payers, to explore options for
352	352	306mitigating the cost of the eligible drug. Upon the conclusion of a stakeholder engagement
353	353	307process under this subsection, the commission shall issue recommendations on ways to reduce
354	354	308the cost of the eligible drug for the purpose of improving patient access to the eligible drug.
355	355	309Recommendations may include, but shall not be limited to: (i) an alternative payment plan or
356	356	310methodology; (ii) a bulk purchasing program; (iii) co-pay, deductible, coinsurance or other cost-
357	357	311sharing restrictions; and (iv) a reinsurance program to subsidize the cost of the eligible drug. The
358	358	312recommendations shall be publicly posted on the commission’s website and provided to the
359	359	313clerks of the house of representatives and senate, the joint committee on health care financing
360	360	314and the house and senate committees on ways and means.
361	361	315 (e) If, after review of an eligible drug, the commission determines that the manufacturer’s
362	362	316pricing of the eligible drug substantially exceeds the proposed value of the drug, the commission 16 of 77
363	363	317shall request that the manufacturer provide further information related to the pricing of the
364	364	318eligible drug and the manufacturer’s reasons for the pricing not later than 30 days after receiving
365	365	319the request.
366	366	320 (f) Not later than 60 days after receiving information from the manufacturer under
367	367	321subsection (b) or subsection (e), the commission shall confidentially issue a determination on
368	368	322whether the manufacturer’s pricing of an eligible drug substantially exceeds the commission’s
369	369	323proposed value of the drug. If the commission determines that the manufacturer’s pricing of an
370	370	324eligible drug substantially exceeds the proposed value of the drug, the commission shall
371	371	325confidentially notify the manufacturer, in writing, of its determination and request the
372	372	326manufacturer to enter into an access and affordability improvement plan under section 21.
373	373	327 (g) Records disclosed by a manufacturer under this section shall: (i) be accompanied by
374	374	328an attestation that all information provided is true and correct; (ii) not be public records under
375	375	329clause Twenty-sixth of section 7 of chapter 4 or under chapter 66; and (iii) remain confidential;
376	376	330provided, however, that the commission may produce reports summarizing any findings;
377	377	331provided further, that any such report shall not be in a form that identifies specific prices charged
378	378	332for or rebate amounts associated with drugs by a manufacturer or in a manner that is likely to
379	379	333compromise the financial, competitive or proprietary nature of the information.
380	380	334 Any request for further information made by the commission under subsection (e) or any
381	381	335determination issued or written notification made by the commission under subsection (f) shall
382	382	336not be public records under said clause Twenty-sixth of said section 7 of said chapter 4 or under
383	383	337said chapter 66. 17 of 77
384	384	338 (h) The commission’s proposed value of an eligible and the commission’s underlying
385	385	339analysis of the eligible drug is not intended to be used to determine whether any individual
386	386	340patient meets prior authorization or utilization management criteria for the eligible drug. The
387	387	341proposed value and underlying analysis shall not be the sole factor in determining whether a drug
388	388	342is included in a formulary or whether the drug is subject to step therapy.
389	389	343 (i) If the manufacturer fails to timely comply with the commission’s request for records
390	390	344under subsection (b) or subsection (e), or otherwise knowingly obstructs the commission’s
391	391	345ability to issue its determination under subsection (f), including, but not limited to, by providing
392	392	346incomplete, false or misleading information, the commission may impose appropriate sanctions
393	393	347against the manufacturer, including reasonable monetary penalties not to exceed $500,000, in
394	394	348each instance. The commission shall seek to promote compliance with this section and shall only
395	395	349impose a civil penalty on the manufacturer as a last resort. Penalties collected under this
396	396	350subsection shall be deposited into the Prescription Drug Cost Assistance Trust Fund established
397	397	351in section 2RRRRR of chapter 29.
398	398	352 (j) The commission shall adopt any written policies, procedures or regulations that the
399	399	353commission determines are necessary to implement this section.
400	400	354 Section 21. (a) The commission shall establish procedures to assist manufacturers in
401	401	355filing and implementing an access and affordability improvement plan.
402	402	356 Upon providing written notice provided under subsection (f) of section 20, the
403	403	357commission shall request that a manufacturer whose pricing of an eligible drug substantially
404	404	358exceeds the commission’s proposed value of the drug file an access and affordability
405	405	359improvement plan with the commission. Not later than 45 days after receipt of a notice under 18 of 77
406	406	360said subsection (f) of said section 20, a manufacturer shall: (i) file an access and affordability
407	407	361improvement plan; or (ii) provide written notice declining the commission’s request.
408	408	362 (b) An access and affordability improvement plan shall: (i) be generated by the
409	409	363manufacturer; (ii) identify the reasons for the manufacturer’s drug price; and (iii) include, but not
410	410	364be limited to, specific strategies, adjustments and action steps the manufacturer proposes to
411	411	365implement to address the cost of the eligible drug in order to improve the accessibility and
412	412	366affordability of the eligible drug for patients and the state’s health system. The proposed access
413	413	367and affordability improvement plan shall include specific identifiable and measurable expected
414	414	368outcomes and a timetable for implementation. The timetable for an access and affordability
415	415	369improvement plan shall not exceed 18 months.
416	416	370 (c) The commission shall approve any access and affordability improvement plan that it
417	417	371determines: (i) is reasonably likely to address the cost of an eligible drug in order to substantially
418	418	372improve the accessibility and affordability of the eligible drug for patients and the state’s health
419	419	373system; and (ii) has a reasonable expectation for successful implementation.
420	420	374 (d) If the commission determines that the proposed access and affordability improvement
421	421	375plan is unacceptable or incomplete, the commission may provide consultation on the criteria that
422	422	376have not been met and may allow an additional time period of not more than 30 calendar days for
423	423	377resubmission; provided, however, that all aspects of the access plan shall be proposed by the
424	424	378manufacturer and the commission shall not require specific elements for approval.
425	425	379 (e) Upon approval of the proposed access and affordability improvement plan, the
426	426	380commission shall notify the manufacturer to begin immediate implementation of the access and
427	427	381affordability improvement plan. Public notice shall be provided by the commission on its 19 of 77
428	428	382website, identifying that the manufacturer is implementing an access and affordability
429	429	383improvement plan; provided, however, that upon the successful completion of the access and
430	430	384affordability improvement plan, the identity of the manufacturer shall be removed from the
431	431	385commission's website. All manufacturers implementing an approved access improvement plan
432	432	386shall be subject to additional reporting requirements and compliance monitoring as determined
433	433	387by the commission. The commission shall provide assistance to the manufacturer in the
434	434	388successful implementation of the access and affordability improvement plan.
435	435	389 (f) All manufacturers shall work in good faith to implement the access and affordability
436	436	390improvement plan. At any point during the implementation of the access and affordability
437	437	391improvement plan, the manufacturer may file amendments to the access improvement plan,
438	438	392subject to approval of the commission.
439	439	393 (g) At the conclusion of the timetable established in the access and affordability
440	440	394improvement plan, the manufacturer shall report to the commission regarding the outcome of the
441	441	395access and affordability improvement plan. If the commission determines that the access and
442	442	396affordability improvement plan was unsuccessful, the commission shall: (i) extend the
443	443	397implementation timetable of the existing access and affordability improvement plan; (ii) approve
444	444	398amendments to the access and affordability improvement plan as proposed by the manufacturer;
445	445	399(iii) require the manufacturer to submit a new access and affordability improvement plan; or (iv)
446	446	400waive or delay the requirement to file any additional access and affordability improvement plans.
447	447	401 (h) The commission shall submit a recommendation for proposed legislation to the joint
448	448	402committee on health care financing if the commission determines that further legislative 20 of 77
449	449	403authority is needed to assist manufacturers with the implementation of access and affordability
450	450	404improvement plans or to otherwise ensure compliance with this section.
451	451	405 (i) An access and affordability improvement plan under this section shall remain
452	452	406confidential in accordance with section 2A.
453	453	407 (j) The commission may assess a civil penalty to a manufacturer of not more than
454	454	408$500,000, in each instance, if the commission determines that the manufacturer: (i) willfully
455	455	409neglected to file an access and affordability improvement plan with the commission under
456	456	410subsection (a); (ii) failed to file an acceptable access and affordability improvement plan in good
457	457	411faith with the commission; (iii) failed to implement the access and affordability improvement
458	458	412plan in good faith; or (iv) knowingly failed to provide information required by this section to the
459	459	413commission or knowingly falsified the information. The commission shall seek to promote
460	460	414compliance with this section and shall only impose a civil penalty as a last resort. Penalties
461	461	415collected under this subsection shall be deposited into the Prescription Drug Cost Assistance
462	462	416Trust Fund established in section 2RRRRR of chapter 29.
463	463	417 (k) If a manufacturer declines to enter into an access and affordability improvement plan
464	464	418under this section, the commission may publicly post the proposed value of the eligible drug,
465	465	419hold a public hearing on the proposed value of the eligible drug and solicit public comment. The
466	466	420manufacturer shall appear and testify at the public hearing held on the eligible drug’s proposed
467	467	421value. Upon the conclusion of a public hearing under this subsection, the commission shall issue
468	468	422recommendations on ways to reduce the cost of an eligible drug for the purpose of improving
469	469	423patient access to the eligible drug. The recommendations shall be publicly posted on the
470	470	424commission’s website and provided to the clerks of the house of representatives and senate, the 21 of 77
471	471	425joint committee on health care financing and the house and senate committees on ways and
472	472	426means.
473	473	427 If a manufacturer is deemed to not be acting in good faith to develop an acceptable or
474	474	428complete access and affordability improvement plan, the commission may publicly post the
475	475	429proposed value of the eligible drug, hold a public hearing on the proposed value of the eligible
476	476	430drug and solicit public comment. The manufacturer shall appear and testify at any hearing held
477	477	431on the eligible drug’s proposed value. Upon the conclusion of a public hearing under this
478	478	432subsection, the commission shall issue recommendations on ways to reduce the cost of an
479	479	433eligible drug for the purpose of improving patient access to the eligible drug. The
480	480	434recommendations shall be publicly posted on the commission’s website and provided to the
481	481	435clerks of the house of representatives and senate, the joint committee on health care financing
482	482	436and the house and senate committees on ways and means.
483	483	437 Before making a determination that the manufacturer is not acting in good faith, the
484	484	438commission shall send a written notice to the manufacturer that the commission shall deem the
485	485	439manufacturer to not be acting in good faith if the manufacturer does not submit an acceptable
486	486	440access and affordability improvement plan within 30 days of receipt of notice; provided,
487	487	441however, that the commission shall not send a notice under this paragraph within 120 calendar
488	488	442days from the date that the commission issued its request that the manufacturer enter into the
489	489	443access and affordability improvement plan.
490	490	444 (l) The commission shall promulgate regulations necessary to implement this section. 22 of 77
491	491	445 SECTION 23. Section 1 of chapter 12C of the General Laws, as appearing in the 2020
492	492	446Official Edition, is hereby amended by inserting after the definition of “Ambulatory surgical
493	493	447center services” the following 3 definitions:-
494	494	448 “Average manufacturer price”, the average price paid to a manufacturer for a drug in the
495	495	449commonwealth by a: (i) wholesaler for drugs distributed to pharmacies; and (ii) pharmacy that
496	496	450purchases drugs directly from the manufacturer.
497	497	451 “Biosimilar”, a drug that is produced or distributed pursuant to a biologics license
498	498	452application approved under 42 U.S.C. 262(k)(3).
499	499	453 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
500	500	454drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an
501	501	455application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
502	502	456is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
503	503	457Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
504	504	458application that was approved by the United States Secretary of Health and Human Services
505	505	459under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
506	506	460date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
507	507	4611984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic as defined by 42 C.F.R.
508	508	462447.502; (ii) produced or distributed pursuant to a biologics license application approved under
509	509	46342 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug based
510	510	464on available data resources such as Medi-Span. 23 of 77
511	511	465 SECTION 24. Said section 1 of said chapter 12C, as so appearing, is hereby further
512	512	466amended by inserting after the definition of “General health supplies, care or rehabilitative
513	513	467services and accommodations” the following definition:-
514	514	468 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
515	515	469abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic as
516	516	470defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962 that
517	517	471was not originally marketed under a new drug application; or (iv) identified by the health benefit
518	518	472plan as a generic drug based on available data resources such as Medi-Span.
519	519	473 SECTION 25. Said section 1 of said chapter 12C, as so appearing, is hereby further
520	520	474amended by inserting after the definition of “Patient-centered medical home” the following 2
521	521	475definitions:-
522	522	476 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
523	523	477preparation, propagation, compounding, conversion or processing of prescription drugs, directly
524	524	478or indirectly, by extraction from substances of natural origin, independently by means of
525	525	479chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
526	526	480repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
527	527	481“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
528	528	482under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
529	529	483chapter 112.
530	530	484 “Pharmacy benefit manager”, a person, business or other entity, however organized, that,
531	531	485directly or through a subsidiary, provides pharmacy benefit management services for prescription
532	532	486drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self- 24 of 77
533	533	487insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
534	534	488management services shall include, but not be limited to: (i) the processing and payment of
535	535	489claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
536	536	490of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
537	537	491grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
538	538	492drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
539	539	493clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
540	540	494covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
541	541	495health benefit plan that does not contract with a pharmacy benefit manager and manages its own
542	542	496prescription drug benefits unless specifically exempted by the commission.
543	543	497 SECTION 26. Said section 1 of said chapter 12C, as so appearing, is hereby further
544	544	498amended by adding the following definition:-
545	545	499 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
546	546	5001395w-3a(c)(6)(B).
547	547	501 SECTION 27. Section 3 of said chapter 12C, as so appearing, is hereby amended by
548	548	502inserting after the word “organizations”, in lines 13 and 14, the following words:- ,
549	549	503pharmaceutical manufacturing companies, pharmacy benefit managers.
550	550	504 SECTION 28. Said section 3 of said chapter 12C, as so appearing, is hereby further
551	551	505amended by striking out, in line 24, the words “and payer” and inserting in place thereof the
552	552	506following words:- , payer, pharmaceutical manufacturing company and pharmacy benefit
553	553	507manager. 25 of 77
554	554	508 SECTION 29. Section 5 of said chapter 12C, as so appearing, is hereby amended by
555	555	509striking out, in lines 11 and 12, the words “and public health care payers” and inserting in place
556	556	510thereof the following words:- , public health care payers, pharmaceutical manufacturing
557	557	511companies and pharmacy benefit managers.
558	558	512 SECTION 30. Said section 5 of said chapter 12C, as so appearing, is hereby further
559	559	513amended by striking out, in line 15, the words “and affected payers” and inserting in place
560	560	514thereof the following words:- affected payers, affected pharmaceutical manufacturing companies
561	561	515and affected pharmacy benefit managers.
562	562	516 SECTION 31. The first paragraph of section 7 of said chapter 12C, as so appearing, is
563	563	517hereby amended by adding the following sentence:- Each pharmaceutical and biopharmaceutical
564	564	518manufacturing company and pharmacy benefit manager shall pay to the commonwealth an
565	565	519amount for the estimated expenses of the center and for the other purposes described in this
566	566	520chapter.
567	567	521 SECTION 32. Said section 7 of said chapter 12C, as so appearing, is hereby further
568	568	522amended by striking out, in lines 8 and 42, the figure “33” and inserting in place thereof, in each
569	569	523instance, the following figure:- 25.
570	570	524 SECTION 33. Said section 7 of said chapter 12C, as so appearing, is hereby further
571	571	525amended by adding the following paragraph:-
572	572	526 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
573	573	527companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
574	574	528appropriated by the general court for the expenses of the center minus amounts collected from:
575	575	529(i) filing fees; (ii) fees and charges generated by the commission's publication or dissemination 26 of 77
576	576	530of reports and information; and (iii) federal matching revenues received for these expenses or
577	577	531received retroactively for expenses of predecessor agencies. Pharmaceutical and
578	578	532biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
579	579	533and distribution determined by the center, pay to the commonwealth an amount of the estimated
580	580	534expenses of the center attributable to the center’s activities under sections 3, 10A, 12 and 16. The
581	581	535assessed amount shall be based on business conducted in the commonwealth by the
582	582	536pharmaceutical and biopharmaceutical manufacturing company and pharmacy benefit manager.
583	583	537A pharmacy benefit manager that is also a surcharge payor subject to the preceding paragraph
584	584	538and manages its own prescription drug benefits shall not be subject to additional assessment
585	585	539under this paragraph.
586	586	540 SECTION 34. Said chapter 12C is hereby further amended by inserting after section 10
587	587	541the following section:-
588	588	542 Section 10A. (a) The center shall promulgate the regulations necessary to ensure the
589	589	543uniform reporting of information from pharmaceutical manufacturing companies to enable the
590	590	544center to analyze: (i) year-over-year changes in wholesale acquisition cost and average
591	591	545manufacturer price for prescription drug products; (ii) year-over-year trends in net expenditures;
592	592	546(iii) net expenditures on subsets of biosimilar, brand name and generic drugs identified by the
593	593	547center; (iv) trends in estimated aggregate drug rebates, discounts or other remuneration paid or
594	594	548provided by a pharmaceutical manufacturing company to a pharmacy benefit manager,
595	595	549wholesaler, distributor, health carrier client, health plan sponsor or pharmacy in connection with
596	596	550utilization of the pharmaceutical drug products offered by the pharmaceutical manufacturing
597	597	551company; (v) discounts provided by a pharmaceutical manufacturing company to a consumer in
598	598	552connection with utilization of the pharmaceutical drug products offered by the pharmaceutical 27 of 77
599	599	553manufacturing company, including any discount, rebate, product voucher, coupon or other
600	600	554reduction in a consumer’s out-of-pocket expenses including co-payments and deductibles under
601	601	555section 3 of chapter 175H; (vi) research and development costs as a percentage of revenue; (vii)
602	602	556annual marketing and advertising costs, identifying costs for direct-to-consumer advertising;
603	603	557(viii) annual profits over the most recent 5-year period; (ix) disparities between prices charged to
604	604	558purchasers in the commonwealth and purchasers outside of the United States; and (x) any other
605	605	559information deemed necessary by the center.
606	606	560 The center shall require the submission of available data and other information from
607	607	561pharmaceutical manufacturing companies including, but not limited to: (i) wholesale acquisition
608	608	562costs and average manufacturer prices for prescription drug products as identified by the center;
609	609	563(ii) true net typical prices charged to pharmacy benefits managers by payor type for prescription
610	610	564drug products identified by the center, net of any rebate or other payments from the manufacturer
611	611	565to the pharmacy benefits manager and from the pharmacy benefits manager to the manufacturer;
612	612	566(iii) aggregate, company-level research and development costs to the extent attributable to a
613	613	567specific product and other relevant capital expenditures for the most recent year for which final
614	614	568audited data is available for prescription drug products as identified by the center; (iv) annual
615	615	569marketing and advertising expenditures; and (v) a description, absent proprietary information and
616	616	570written in plain language, of factors that contributed to reported changes in wholesale acquisition
617	617	571costs, net prices and average manufacturer prices for prescription drug products as identified by
618	618	572the center.
619	619	573 (b) The center shall promulgate the regulations necessary to ensure the uniform reporting
620	620	574of information from pharmacy benefit managers to enable the center to analyze: (i) trends in
621	621	575estimated aggregate drug rebates and other drug price reductions, if any, provided by a pharmacy 28 of 77
622	622	576benefit manager to a health carrier client or health plan sponsor or passed through from a
623	623	577pharmacy benefit manager to a health carrier client or health plan sponsor in connection with
624	624	578utilization of drugs in the commonwealth offered through the pharmacy benefit manager and a
625	625	579measure of lives covered by each health carrier client or health plan sponsor in the
626	626	580commonwealth; (ii) pharmacy benefit manager practices with regard to drug rebates and other
627	627	581drug price reductions, if any, provided by a pharmacy benefit manager to a health carrier client
628	628	582or health plan sponsor or to consumers in the commonwealth or passed through from a pharmacy
629	629	583benefit manager to a health carrier client or health plan sponsor or to consumers in the
630	630	584commonwealth; and (iii) any other information deemed necessary by the center.
631	631	585 The center shall require the submission of available data and other information from
632	632	586pharmacy benefit managers including, but not limited to: (i) true net typical prices charged by
633	633	587pharmacy benefits managers for prescription drug products identified by the center, net of any
634	634	588rebate or other payments from the manufacturer to the pharmacy benefits manager and from the
635	635	589pharmacy benefits manager to the manufacturer; (ii) the amount of all rebates that the pharmacy
636	636	590benefit manager received from all pharmaceutical manufacturing companies for all health carrier
637	637	591clients in the aggregate and for each health carrier client or health plan sponsor individually,
638	638	592attributable to patient utilization in the commonwealth; (iii) the administrative fees that the
639	639	593pharmacy benefit manager received from all health carrier clients or health plan sponsors in the
640	640	594aggregate and for each health carrier client or health plans sponsors individually; (iv) the
641	641	595aggregate amount of all retained rebates that the pharmacy benefit manager received from all
642	642	596pharmaceutical manufacturing companies and did not pass through to each pharmacy benefit
643	643	597manager’s health carrier client or health plan sponsor individually; (v) the aggregate amount of
644	644	598rebates a pharmacy benefit manager: (A) retains based on its contractual arrangement with each 29 of 77
645	645	599health plan client or health plan sponsor individually; and (B) passes through to each health care
646	646	600client individually; (vi) the percentage of contracts that a pharmacy benefit manager holds where
647	647	601the pharmacy benefit manager: (A) retains all rebates; (B) passes all rebates through to the client;
648	648	602and (C) shares rebates with the client; and (vii) other information as determined by the center,
649	649	603including, but not limited to, pharmacy benefit manager practices related to spread pricing,
650	650	604administrative fees, claw backs and formulary placement.
651	651	605 (c) Except as specifically provided otherwise by the center or under this chapter, data
652	652	606collected by the center pursuant to this section from pharmaceutical manufacturing companies
653	653	607and pharmacy benefit managers shall not be a public record under clause Twenty-sixth of section
654	654	6087 of chapter 4 or under chapter 66.
655	655	609 SECTION 35. Said chapter 12C is hereby further amended by striking out section 11, as
656	656	610so appearing, and inserting in place thereof the following section:-
657	657	611 Section 11. The center shall ensure the timely reporting of information required under
658	658	612sections 8, 9, 10 and 10A. The center shall notify private health care payers, providers, provider
659	659	613organizations, pharmacy benefit managers, pharmaceutical manufacturing companies and their
660	660	614parent organization and other affiliates of any applicable reporting deadlines. The center shall
661	661	615notify, in writing, a private health care payer, provider, provider organization, pharmacy benefit
662	662	616manager or pharmaceutical manufacturing company, and their parent organization and other
663	663	617affiliates, that has failed to meet a reporting deadline of such failure and that failure to respond
664	664	618within 2 weeks of the receipt of the notice may result in penalties. The center may assess a
665	665	619penalty against a private health care payer, provider, provider organization, pharmacy benefit
666	666	620manager or pharmaceutical manufacturing company, and their parent organization and other 30 of 77
667	667	621affiliates, that fails, without just cause, to provide the requested information, including subsets of
668	668	622the requested information, within 2 weeks following receipt of the written notice required under
669	669	623this section, of not more than $2,000 per week for each week of delay after the 2-week period
670	670	624following receipt of the notice. Amounts collected under this section shall be deposited in the
671	671	625Healthcare Payment Reform Fund established in section 100 of chapter 194 of the acts of 2011.
672	672	626 SECTION 36. Section 12 of said chapter 12C, as so appearing, is hereby amended by
673	673	627striking out, in line 2, the words “and 10” and inserting in place thereof the following words:- ,
674	674	62810 and 10A.
675	675	629 SECTION 37. Subsection (a) of section 16 of said chapter 12C, as so appearing, is hereby
676	676	630amended by striking out the first sentence and inserting in place thereof the following sentence:-
677	677	631The center shall publish an annual report based on the information submitted under: (i) sections
678	678	6328, 9, 10 and 10A concerning health care provider, provider organization, private and public
679	679	633health care payer, pharmaceutical manufacturing company and pharmacy benefit manager costs
680	680	634and cost and price trends; (ii) section 13 of chapter 6D relative to market power reviews; and (iii)
681	681	635section 15 of said chapter 6D relative to quality data.
682	682	636 SECTION 38. Said section 16 of said chapter 12C, as so appearing, is hereby further
683	683	637amended by striking out, in line 18, the words “in the aggregate”.
684	684	638 SECTION 39. Said section 16 of said chapter 12C, as so appearing, is hereby further
685	685	639amended by inserting after the second paragraph the following paragraph:-
686	686	640 As part of its annual report, the center shall report on prescription drug utilization and
687	687	641spending for pharmaceutical drugs provided in an outpatient setting or sold in a retail setting for
688	688	642private and public health care payers, including, but not limited to, information sufficient to 31 of 77
689	689	643show (i) highest utilization drugs; (ii) drugs with the greatest increases in utilization; (iii) drugs
690	690	644that are most impactful on plan spending, net of rebates; and (iv) drugs with the highest year-
691	691	645over-year price increases, net of rebates.
692	692	646 SECTION 40. Section 13 of chapter 17 of the General Laws, as so appearing, is hereby
693	693	647amended by adding the following subsection:-
694	694	648 (f) As used in this subsection, the following words shall have the following meanings
695	695	649unless the context clearly requires otherwise:
696	696	650 “Public health essential drug”, a prescription drug, biologic or biosimilar approved by the
697	697	651United States Food and Drug Administration that: (i) appears on the Model List of Essential
698	698	652Medicines most recently adopted by the World Health Organization; or (ii) is deemed an
699	699	653essential medicine by the commission due to its efficacy in treating a life-threatening health
700	700	654condition or a chronic health condition that substantially impairs an individual’s ability to engage
701	701	655in activities of daily living or because limited access to a certain population would pose a public
702	702	656health challenge.
703	703	657 The commission shall identify and publish a list of public health essential prescription
704	704	658drugs. The list shall be updated not less than annually and be made publicly available on the
705	705	659department’s website; provided, however, that the commission may provide an interim listing of
706	706	660a public health essential drug prior to an annual update. The commission shall notify and forward
707	707	661a copy of the list to the health policy commission established under chapter 6D.
708	708	662 SECTION 41. Chapter 29 of the General Laws is hereby amending by inserting after
709	709	663section 2QQQQQ the following section:- 32 of 77
710	710	664 2RRRRR. (a) There shall be a Prescription Drug Cost Assistance Trust Fund. The
711	711	665secretary of health and human services shall administer the fund and shall make expenditures
712	712	666from the fund, without further appropriation, to provide financial assistance to state residents for
713	713	667the cost of prescription drugs through the prescription drug costs assistance program established
714	714	668under section 244 of chapter 111. For the purpose of this section “prescription drug” shall
715	715	669include the prescription drug and any drug delivery device needed to administer the drug that is
716	716	670not included as part of the underlying drug prescription.
717	717	671 The fund shall consist of: (i) revenue generated from the penalty established under
718	718	672chapter 63E; (ii) revenue from appropriations or other money authorized by the general court and
719	719	673specifically designated to be credited to the fund; and (iii) funds from public or private sources,
720	720	674including, but not limited to, gifts, grants, donations, rebates and settlements received by the
721	721	675commonwealth that are specifically designated to be credited to the fund. An amount equal to the
722	722	676total receipts deposited each quarter from the penalty on drug manufacturers for excessive price
723	723	677increases established under chapter 63E shall be transferred from the General Fund to the
724	724	678Prescription Drug Costs Assistance Trust Fund before the end of each fiscal year. Money
725	725	679remaining in the fund at the close of a fiscal year shall not revert to the General Fund and shall
726	726	680be available for expenditure in the following fiscal year.
727	727	681 (b) Annually, not later than March 1, the secretary shall report on the activities detailing
728	728	682the funds expenditures from the previous calendar year. The report shall include: (i) the number
729	729	683of individuals who received financial assistance from the fund; (ii) the breakdown of fund
730	730	684recipients by race, gender, age range, geographic region and income level; (iii) a list of all
731	731	685prescription drugs that were covered by money from the fund; and (iv) the total cost savings
732	732	686received by all fund recipients and the cost savings broken down by race, gender, age range and 33 of 77
733	733	687income level. The report shall be submitted to the clerks of the senate and house of
734	734	688representatives, senate and house committees on ways and means and the joint committee on
735	735	689health care financing.
736	736	690 (c) The secretary shall promulgate regulations or issue other guidance for the expenditure
737	737	691of the funds under this section.
738	738	692 SECTION 42. Section 17G of chapter 32A of the General Laws, as appearing in the 2020
739	739	693Official Edition, is hereby amended by adding the following sentence:-
740	740	694 Coverage for insulin under this section shall not be subject to any deductible or co-
741	741	695insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
742	742	696or type of insulin needed to fill an insured’s prescription; provided, however, that nothing in this
743	743	697section shall prevent the commission and its contracted health benefit plans from reducing the
744	744	698co-payment for insulin for a 30-day supply below the amount specified in this section.
745	745	699 SECTION 43. Said chapter 32A, as so appearing, is hereby further amended by inserting
746	746	700after section 17R the following section:-
747	747	701 Section 17S. Any carrier offering a policy, contract or certificate of health insurance
748	748	702under this chapter shall provide coverage for the brand name drugs and generic drugs identified
749	749	703by the drug access program established in section 16DD in chapter 6A. Coverage for identified
750	750	704generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
751	751	705and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
752	752	706subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
753	753	707supply. 34 of 77
754	754	708 Notwithstanding this section or any other general or special law to the contrary, coverage
755	755	709for insulin shall be provided under section 17G of this chapter.
756	756	710 SECTION 44. The General Laws are hereby amended by inserting after chapter 63D the
757	757	711following chapter:-
758	758	712 Chapter 63E. PENALTY ON DRUG MANUFACTURERS FOR EXCESSIVE PRICE
759	759	713INCREASES
760	760	714 Section 1. As used in this chapter, the following words shall, unless the context clearly
761	761	715requires otherwise, have the following meanings:
762	762	716 “Commissioner”, the commissioner of revenue.
763	763	717 “Core consumer price index”, the consumer price index for all urban consumers (CPI-U):
764	764	718U.S. city average, for all Items less food and energy, as reported by the U.S. Bureau of Labor
765	765	719Statistics.
766	766	720 “Drug”, any medication, as identified by a National Drug Code, approved for sale by the
767	767	721U.S. Food and Drug Administration.
768	768	722 “Excessive price,” the price of a drug that exceeds the sum of the reference price of that
769	769	723drug plus the three -year average of the core consumer price index, as measured on January 1 of
770	770	724the current calendar year.
771	771	725 “Excessive price increase”, the amount by which the price of a drug exceeds the sum of
772	772	726the reference price of that drug plus the three-year average of the core consumer price index, as
773	773	727measured on January 1 of the current calendar year. 35 of 77
774	774	728 “Person”, any natural person or legal entity.
775	775	729 “Price”, the wholesale acquisition cost of a drug, per unit, as reported to the First Data
776	776	730Bank or other appropriate price compendium designated by the commissioner.
777	777	731 “Reference date”, January 1 of the calendar year prior to the current calendar year.
778	778	732 “Reference price”, the price of a drug on the reference date, or in the case of any drug
779	779	733first commercially marketed in the United States after the reference date, the price of the drug on
780	780	734the date when first marketed in the United States.
781	781	735 “Related party”, an entity is a related party with respect to a person if that entity (i)
782	782	736belongs to the same affiliated group as that person under section 1504 of the Internal Revenue
783	783	737Code provided that the term 50 per cent shall be substituted for the term 80 per cent each time it
784	784	738appears in said section 1504, (ii) has a relationship with that person that is specified in
785	785	739subsections (b) and (c) of section 267 of the Internal Revenue Code, or (iii) is otherwise under
786	786	740common ownership and control with regard to that person; provided, that all references to the
787	787	741Internal Revenue Code in this definition refer to the Internal Revenue Code as amended and in
788	788	742effect for the taxable year.
789	789	743 “Unit”, the lowest dispensable amount of a drug.
790	790	744 Section 2. (a) Any person who manufactures and sells drugs, directly or through another
791	791	745person, for distribution in the commonwealth and who establishes an excessive price for any
792	792	746such drug directly or in cooperation with a related party, shall pay a per unit penalty on all units
793	793	747of the drug ultimately dispensed or administered in the commonwealth. The penalty for each unit
794	794	748shall be 80 per cent of the excessive price increase for each unit. 36 of 77
795	795	749 (b) A person who establishes an excessive price for a drug as described in subsection (a)
796	796	750shall file a return as provided in section 4 declaring all units of excessively priced drug sold for
797	797	751distribution in the commonwealth during each calendar quarter. In the event that a person filing
798	798	752such a return pays a penalty with regard to one or more units of drug that are ultimately
799	799	753dispensed or administered outside of the commonwealth, the person may claim a credit for such
800	800	754penalty amounts on the return for the tax period during which such units are ultimately dispensed
801	801	755or administered.
802	802	756 Section 3. The penalty under section 2 shall apply for any calendar quarter only to a
803	803	757person who maintains a place of business in the commonwealth or whose total sales of all
804	804	758products, directly or through another person, for distribution in the commonwealth were more
805	805	759than $100,000 in the calendar year beginning with the reference date. The penalty shall not apply
806	806	760more than once to any unit of drug sold.
807	807	761 Section 4. Any person subject to the penalty under section 2 shall file a return with the
808	808	762commissioner and shall pay the penalty by the fifteenth day of the third month following the end
809	809	763of each calendar quarter, subject to such reasonable extensions of time for filing as the
810	810	764commissioner may allow. The return shall set out the person’s total sales subject to penalty in the
811	811	765immediately preceding calendar quarter and shall provide such other information as the
812	812	766commissioner may require.
813	813	767 Section 5. The penalty imposed under this chapter shall be in addition to, and not a
814	814	768substitute for or credit against, any other penalty, tax or excise imposed under the General Laws.
815	815	769 Section 6. The commissioner may disclose information contained in returns filed under
816	816	770this chapter to the department of public health, the executive office of health and human services, 37 of 77
817	817	771or other appropriate agency for purposes of verifying that a filer’s sales subject to penalty are
818	818	772properly declared and that all reporting is otherwise correct. Return information so disclosed
819	819	773shall remain confidential and shall not be public record.
820	820	774 Section 7. To the extent that a person subject to penalty under section 2 fails to pay
821	821	775amounts due under this chapter, a related party of such person that directly or indirectly
822	822	776distributes in the commonwealth any drug whose sales are subject to this chapter shall be jointly
823	823	777and severally liable for the penalty due.
824	824	778 Section 8. The commissioner may promulgate regulations for the implementation of this
825	825	779chapter.
826	826	780 SECTION 45. Chapter 94C of the General Laws is hereby amended by inserting after
827	827	781section 21B the following section:-
828	828	782 Section 21C. (a) For the purposes of this section, the following words shall, unless the
829	829	783context clearly requires otherwise, have the following meanings:-
830	830	784 “Cost sharing”, amounts owed by a consumer under the terms of the consumer’s health
831	831	785benefit plan as defined in section 1 of chapter 176O or as required by a pharmacy benefit
832	832	786manager as defined in section 1 of chapter 6D.
833	833	787 “Pharmacy retail price”, the amount an individual would pay for a prescription
834	834	788medication at a pharmacy if the individual purchased that prescription medication at that
835	835	789pharmacy without using a health benefit plan as defined in section 1 of chapter 176O or any
836	836	790other prescription medication benefit or discount. 38 of 77
837	837	791 “Registered pharmacist”, a pharmacist who holds a valid certificate of registration issued
838	838	792by the board of registration in pharmacy pursuant to section 24 of chapter 112.
839	839	793 (b) A pharmacy shall post a notice informing consumers that a consumer may request, at
840	840	794the point of sale, the current pharmacy retail price for each prescription medication the consumer
841	841	795intends to purchase. If the consumer’s cost-sharing amount for a prescription medication exceeds
842	842	796the current pharmacy retail price, the pharmacist, or an authorized individual at the direction of a
843	843	797pharmacist, shall notify the consumer that the pharmacy retail price is less than the patient’s cost-
844	844	798sharing amount. The pharmacist shall charge the consumer the applicable cost-sharing amount or
845	845	799the current pharmacy retail price for that prescription medication, as directed by the consumer.
846	846	800 A pharmacist shall not be subject to a penalty by the board of registration in pharmacy or
847	847	801a third party for failure to comply with this section.
848	848	802 (c) A contractual obligation shall not prohibit a pharmacist from complying with this
849	849	803section; provided however, that a pharmacist shall submit a claim to the consumer’s health
850	850	804benefit plan or its pharmacy benefit manager if the pharmacist has knowledge that the
851	851	805prescription medication is covered under the consumer’s health benefit plan.
852	852	806 (d) Failure to post notice pursuant to subsection (b) shall be an unfair or deceptive act of
853	853	807practice under chapter 93A.
854	854	808 SECTION 46. Chapter 111 of the General Laws is hereby amended by adding the
855	855	809following section:-
856	856	810 Section 244. (a) The department shall establish and administer a prescription drug cost
857	857	811assistance program, which shall be funded by the Prescription Drug Cost Assistance Trust Fund 39 of 77
858	858	812established in section 2RRRRR of chapter 29. The program shall provide financial assistance for
859	859	813prescription drugs used to treat: (1) chronic respiratory conditions, including, but not limited to,
860	860	814chronic obstructive pulmonary disease and asthma; (2) chronic heart conditions, including, but
861	861	815not limited to, heart failure, coronary artery disease, hypertension and high blood pressure; (3)
862	862	816diabetes; and (4) any other chronic condition identified by the department that disproportionally
863	863	817impacts people of color or is a risk factor for increased COVID-19 complications; provided, that
864	864	818for paragraphs (1) and (3), “prescription drug” shall include the prescription drug and any drug
865	865	819delivery device needed to administer the drug that is not included as part of the underlying drug
866	866	820prescription. Such financial assistance shall cover the full cost of any co-payment, co-insurance
867	867	821or deductible for the prescription drug for an individual who is eligible for the program.
868	868	822 (b) An individual shall be eligible for the program if the individual: (1) is a resident of
869	869	823Massachusetts; (2) has a current prescription from a health care provider for a drug that is used to
870	870	824treat a chronic condition listed in subsection (a); (3) has a family income equal to or less than
871	871	825500 per cent of the federal poverty level; and (4) is not enrolled in MassHealth.
872	872	826 (c) The department shall create an application process, which shall be available
873	873	827electronically and in hard copy form, to determine whether an individual meets the program
874	874	828eligibility requirements under subsection (b). Upon receipt of such application, the department
875	875	829shall determine an applicant’s eligibility and notify the applicant of the department’s
876	876	830determination within 10 business days. If necessary for its determination, the department may
877	877	831request additional information from the applicant; provided, that the department shall notify the
878	878	832applicant within 5 business days of receipt of the original application as to what specific
879	879	833additional information is being requested. If additional information is being requested, the
880	880	834department shall, within 3 business days of receipt of the additional information, determine 40 of 77
881	881	835whether the applicant is eligible for the program and notify the applicant of the department’s
882	882	836determination.
883	883	837 If the department determines that an applicant is not eligible for the program, the
884	884	838department shall notify the applicant and shall include in the department’s notification the
885	885	839specific reasons why the applicant is not eligible. The applicant may appeal this determination to
886	886	840the department within 30 days of receiving such notification.
887	887	841 If the department determines that an applicant is eligible for the program, the department
888	888	842shall provide the applicant with a prescription drug cost assistance program identification card,
889	889	843which shall clearly indicate that the department has determined that the applicant is eligible for
890	890	844the program; provided, that the program identification card shall include, at a minimum: (1) the
891	891	845applicant’s full name, and (2) the full name of the prescription drug that the applicant is eligible
892	892	846to receive under the program without having to pay a co-payment, co-insurance or deductible.
893	893	847An applicant’s program identification card shall be valid for 12 months and shall be renewable
894	894	848upon a redetermination of program eligibility.
895	895	849 (d) An individual with a valid program identification card issued under subsection (c)
896	896	850may present such card at any pharmacy in the commonwealth and, upon presentation of such
897	897	851card, the pharmacy shall fill the individual’s prescription and provide the prescribed drug to the
898	898	852individual without requiring the individual to pay a co-payment, co-insurance or deductible;
899	899	853provided, that the pharmacy shall be reimbursed for its costs by the Prescription Drug Cost
900	900	854Assistance Trust Fund established in section 2RRRRR of chapter 29, in a manner determined by
901	901	855the department, in an amount equal to what the pharmacy would have received had the individual
902	902	856been required to pay a co-payment, co-insurance or deductible. 41 of 77
903	903	857 (e) The department, in collaboration with the division of insurance and board of
904	904	858registration in pharmacy, shall develop and implement a plan to educate consumers, pharmacists,
905	905	859providers, hospitals and insurers regarding eligibility for and enrollment in the program under
906	906	860this section. The plan shall include, but not be limited to, appropriate staff training, notices
907	907	861provided to consumers at the pharmacy, and a designated website with information for
908	908	862consumers, pharmacists and other health care professionals. The plan shall be developed in
909	909	863consultation with groups representing consumers, pharmacists, providers, hospitals and insurers.
910	910	864 (f) The department shall compile a report detailing information about the program from
911	911	865the previous calendar year. The report shall include: (1) the number of applications received,
912	912	866approved, denied and appealed; (2) the total number of applicants approved, and the number of
913	913	867applicants approved broken down by race, gender, age range and income level; (3) a list of all
914	914	868prescription drugs that qualify for the program under subsection (b) and a list of prescription
915	915	869drugs that applicants actually received financial assistance for; and (4) the total cost savings
916	916	870received by all approved applicants, and the cost savings broken down by race, gender, age range
917	917	871and income level. The report shall be submitted annually, by March 1, to the clerks of the senate
918	918	872and house of representatives, the chairs of the joint committee on ways and means and the chairs
919	919	873of the joint committee on health care financing.
920	920	874 (g) The department shall promulgate regulations or issue other guidance for the
921	921	875implementation and enforcement of this section.
922	922	876 SECTION 47. Section 10C of chapter 118E of the General Laws, as appearing in the
923	923	8772020 Official Edition, is hereby amended by adding the following sentence:- 42 of 77
924	924	878 Coverage for insulin under this section shall not be subject to any deductible or co-
925	925	879insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
926	926	880or type of insulin needed to fill an insured’s prescription; provided, however, that nothing in this
927	927	881section shall prevent the division and its contracted health insurers, health plans, health
928	928	882maintenance organizations, behavioral health management firms and third-party administrators
929	929	883under contract with the division, a Medicaid managed care organization or a primary care
930	930	884clinician plan, from reducing the co-payments for insulin for a 30-day supply below the amount
931	931	885specified in this section.
932	932	886 SECTION 48. Said chapter 118E, as so appearing, is hereby amended by inserting after
933	933	887section 10N the following section:-
934	934	888 Section 10O. Any carrier offering a policy, contract or certificate of health insurance
935	935	889under this chapter shall provide coverage for the brand name drugs and generic drugs identified
936	936	890by the drug access program established in section 16DD in chapter 6A. Coverage for identified
937	937	891generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
938	938	892and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
939	939	893subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
940	940	894supply.
941	941	895 Notwithstanding this section or any other general or special law to the contrary, coverage
942	942	896for insulin shall be provided under section 10C of this chapter.
943	943	897 SECTION 49. Section 47N of chapter 175 of the General Laws, as so appearing, is
944	944	898hereby amended by adding the following paragraph:- 43 of 77
945	945	899 Coverage for insulin under this section shall not be subject to any deductible or co-
946	946	900insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
947	947	901or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing
948	948	902in this section shall prevent an individual policy of accident and sickness insurance issued under
949	949	903section 108 that provides hospital expense and surgical expense insurance or a group blanket or
950	950	904general policy of accident and sickness insurance issued under section 110 that provides hospital
951	951	905expense and surgical expense insurance that is issued or renewed within or without the
952	952	906commonwealth, from reducing the co-payment for insulin for a 30-day supply below the amount
953	953	907specified in this section.
954	954	908 SECTION 50. Said chapter 175, as so appearing, is hereby further amended by inserting
955	955	909after section 47PP the following new section:-
956	956	910 Section 47QQ. Any carrier offering a policy, contract or certificate of health insurance
957	957	911under this chapter shall provide coverage for the brand name drugs and generic drugs identified
958	958	912by the drug access program established in section 16DD in chapter 6A. Coverage for identified
959	959	913generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
960	960	914and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
961	961	915subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
962	962	916supply.
963	963	917 Notwithstanding this section or any other general or special law to the contrary, coverage
964	964	918for insulin shall be provided under section 47N of this chapter.
965	965	919 SECTION 51. Section 226 of said chapter 175 is hereby repealed. 44 of 77
966	966	920 SECTION 52. Section 8P of chapter 176A of the General Laws, as so appearing, is
967	967	921hereby amended by adding the following paragraph:-
968	968	922 Coverage for insulin under this section shall not be subject to any deductible or co-
969	969	923insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
970	970	924or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing
971	971	925in this section shall prevent a contract between a subscriber and the corporation under an
972	972	926individual or group hospital service plan that is delivered, issued or renewed within or without
973	973	927the commonwealth, from reducing the co-payment for insulin for a 30-day supply below the
974	974	928amount specified in this section.
975	975	929 SECTION 53. Said chapter 176A, as so appearing, is hereby further amended by
976	976	930inserting after section 8QQ the following new section:-
977	977	931 Section 8RR. Any carrier offering a policy, contract or certificate of health insurance
978	978	932under this chapter shall provide coverage for the brand name drugs and generic drugs identified
979	979	933by the drug access program established in section 16DD in chapter 6A. Coverage for identified
980	980	934generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
981	981	935and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
982	982	936subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
983	983	937supply.
984	984	938 Notwithstanding this section or any other general or special law to the contrary, coverage
985	985	939for insulin shall be provided under section 8P of this chapter.
986	986	940 SECTION 54. Section 4S of chapter 176B of the General Laws, as so appearing, is
987	987	941hereby amended by adding the following sentence:- 45 of 77
988	988	942 Coverage for insulin under this section shall not be subject to any deductible or co-
989	989	943insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
990	990	944or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing
991	991	945in this section shall prevents a subscription certificate under an individual or group medical
992	992	946service agreement that is issued or renewed within or without the commonwealth, from reducing
993	993	947the co-payment for insulin for a 30-day supply below the amount specified in this section.
994	994	948 SECTION 55. Said chapter 176B, as so appearing, is hereby further amended by inserting
995	995	949after section 4QQ the following new section:-
996	996	950 Section 4RR. Any carrier offering a policy, contract or certificate of health insurance
997	997	951under this chapter shall provide coverage for the brand name drugs and generic drugs identified
998	998	952by the drug access program established in section 16DD in chapter 6A. Coverage for identified
999	999	953generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
1000	1000	954and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
1001	1001	955subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
1002	1002	956supply.
1003	1003	957 Notwithstanding this section or any other general or special law to the contrary, coverage
1004	1004	958for insulin shall be provided under section 4S of this chapter.
1005	1005	959 SECTION 56. Section 4H of chapter 176G of the General Laws, as so appearing, is
1006	1006	960hereby amended by adding the following paragraph:-
1007	1007	961 Coverage for insulin under this section shall not be subject to any deductible or co-
1008	1008	962insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
1009	1009	963or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing 46 of 77
1010	1010	964in this section shall prevent any individual or group health maintenance contract that is issued or
1011	1011	965renewed within or without the commonwealth, from reducing the co-payment for insulin for a
1012	1012	96630-day supply below the amount specified in this section.
1013	1013	967 SECTION 57. Said chapter 176G, as so appearing, is hereby further amended by
1014	1014	968inserting after section 4GG the following new section:-
1015	1015	969 Section 4HH. Any carrier offering a policy, contract or certificate of health insurance
1016	1016	970under this chapter shall provide coverage for the brand name drugs and generic drugs identified
1017	1017	971by the drug access program established in section 16DD in chapter 6A. Coverage for identified
1018	1018	972generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
1019	1019	973and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
1020	1020	974subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
1021	1021	975supply.
1022	1022	976 Notwithstanding this section or any other general or special law to the contrary, coverage
1023	1023	977for insulin shall be provided under section 4H of this chapter.
1024	1024	978 SECTION 58. Section 2 of chapter 176O of the General Laws, as so appearing, is hereby
1025	1025	979amended by adding the following subsection:-
1026	1026	980 (i) Every 3 years, a carrier that contracts with a pharmacy benefit manager shall
1027	1027	981coordinate an audit of the operations of the pharmacy benefit manager to ensure compliance with
1028	1028	982this chapter and to examine the pricing and rebates applicable to prescription drugs that are
1029	1029	983provided to the carrier’s covered persons. 47 of 77
1030	1030	984 SECTION 59. Said chapter 176O, as so appearing, is hereby further amended by
1031	1031	985inserting after section 22 the following section:-
1032	1032	986 Section 22A. Notwithstanding any other general or special law to the contrary, each
1033	1033	987carrier shall require that a pharmacy benefit manager receive a license from the division under
1034	1034	988chapter 176X as a condition of contracting with that carrier.
1035	1035	989 SECTION 60. Said chapter 176O as so appearing, is hereby further amended by adding
1036	1036	990the following section:-
1037	1037	991 Section 30. (a) For the purposes of this section, the following words shall have the
1038	1038	992following meanings unless the context clearly requires otherwise:
1039	1039	993 “Cost-sharing”, an amount owed by an individual under the terms of the individual’s
1040	1040	994health benefit plan.
1041	1041	995 “Pharmacy retail price”, the amount an individual would pay for a prescription
1042	1042	996medication at a pharmacy if the individual purchased that prescription medication at that
1043	1043	997pharmacy without using a health benefit plan or any other prescription medication benefit or
1044	1044	998discount.
1045	1045	999 (b) At the point of sale, a pharmacy shall charge an individual the: (i) appropriate cost-
1046	1046	1000sharing amount; or (ii) pharmacy retail price, whichever is the lowest; provided, however, that a
1047	1047	1001carrier, or an entity that manages or administers benefits for a carrier, shall not require an
1048	1048	1002individual to make a payment for a prescription drug at the point of sale in an amount that
1049	1049	1003exceeds the lesser of the: (a) individual’s cost share; or (b) pharmacy retail price. 48 of 77
1050	1050	1004 (c) A contract shall not: (i) prohibit a pharmacist from complying with this section; or (ii)
1051	1051	1005impose a penalty on the pharmacist or pharmacy for complying with this section.
1052	1052	1006 SECTION 61. The General Laws are hereby amended by inserting after chapter 176W
1053	1053	1007the following chapter:-
1054	1054	1008 Chapter 176X. LICENSING AND REGULATION OF PHARMACY BENEFIT
1055	1055	1009MANAGERS.
1056	1056	1010 Section 1. As used in this chapter, the following words shall have the following
1057	1057	1011meanings, unless the context clearly requires otherwise:-
1058	1058	1012 “Carrier”, as defined in section 1 of chapter 176O “Commissioner”, the commissioner of
1059	1059	1013the division of insurance.
1060	1060	1014 “Cost-sharing requirement”, any copayment, coinsurance, deductible, or annual limitation
1061	1061	1015on cost-sharing (including a limitation subject to 42 U.S.C. §§ 18022(c) and 300gg-6(b)),
1062	1062	1016required by or on behalf of an insured in order to receive specific health care services, including
1063	1063	1017a prescription drug, covered by a health benefit plan .
1064	1064	1018 “Division”, the division of insurance.
1065	1065	1019 “Health benefit plan”, as defined in section 1 of chapter 176O
1066	1066	1020 “Health care services”, supplies, care and services of a medical, surgical, optometric,
1067	1067	1021dental, podiatric, chiropractic, psychiatric, therapeutic, diagnostic, preventative, rehabilitative,
1068	1068	1022supportive, or geriatric nature including, but not limited to, inpatient and outpatient acute
1069	1069	1023hospital care and services, services provided by a community health center or by a sanatorium, as 49 of 77
1070	1070	1024included in the definition of “hospital” in Title XVIII of the federal Social Security Act, and
1071	1071	1025treatment and care compatible with such services or by a health maintenance organization.
1072	1072	1026 “Insured”, an enrollee, covered person, insured, member, policyholder or subscriber of a
1073	1073	1027carrier, including an individual whose eligibility as an insured of a carrier is in dispute or under
1074	1074	1028review, or any other individual whose care may be subject to review by a utilization review
1075	1075	1029program or entity as described under other provisions of this chapter.
1076	1076	1030 “Mail order pharmacy”, a pharmacy whose primary business is to receive prescriptions
1077	1077	1031by mail, telefax or through electronic submissions and to dispense medication to insureds
1078	1078	1032through the use of the United States mail or other common or contract carrier services and that
1079	1079	1033provides any consultation with patients electronically rather than face to face.
1080	1080	1034 “Network”, as defined in section 1 of chapter 176O.
1081	1081	1035 “Network pharmacy”, a retail or other licensed pharmacy provider that contracts with a
1082	1082	1036pharmacy benefit manager.
1083	1083	1037 “Person”, a natural person, corporation, mutual company, unincorporated association,
1084	1084	1038partnership, joint venture, limited liability company, trust, estate, foundation, not-for-profit
1085	1085	1039corporation, unincorporated organization, government or governmental subdivision or agency.
1086	1086	1040 “Pharmacy”, a facility, either physical or electronic, under the direction or supervision of
1087	1087	1041a registered pharmacist which is authorized to dispense prescription drugs and has entered into a
1088	1088	1042network contract with a pharmacy benefit manager or a carrier.
1089	1089	1043 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
1090	1090	1044directly or through a subsidiary provides pharmacy benefit management services for prescription 50 of 77
1091	1091	1045drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
1092	1092	1046insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
1093	1093	1047management services shall include, but not be limited to: (i) the processing and payment of
1094	1094	1048claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
1095	1095	1049of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
1096	1096	1050grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
1097	1097	1051drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
1098	1098	1052clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
1099	1099	1053covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
1100	1100	1054health benefit plan that does not contract with a pharmacy benefit manager and manages its own
1101	1101	1055prescription drug benefits unless specifically exempted by the commission.
1102	1102	1056 “Pharmacy benefit services” shall include, but not be limited to, formulary
1103	1103	1057administration; drug benefit design; pharmacy network contracting; pharmacy claims processing;
1104	1104	1058mail and specialty drug pharmacy services; and cost containment, clinical, safety, adherence
1105	1105	1059programs for pharmacy services, and any other pharmacy benefit service that the commissioner
1106	1106	1060deems appropriate. For the purposes of the chapter, a health benefit plan that does not contract
1107	1107	1061with a pharmacy benefit manager shall be a pharmacy benefit manager.
1108	1108	1062 “Rebates or fees”, all fees or price concessions paid by a manufacturer to a pharmacy
1109	1109	1063benefit manager or carrier, including rebates, discounts, and other price concessions that are
1110	1110	1064based on actual or estimated utilization of a prescription drug. Rebates also include price
1111	1111	1065concessions based on the effectiveness a drug as in a value-based or performance-based contract.
1112	1112	1066 “Retail pharmacy”, as defined in section 39D of chapter 112. 51 of 77
1113	1113	1067 "Spread pricing" means the practice of a pharmacy benefit manager retaining an
1114	1114	1068additional amount of money in addition to the amount paid to the pharmacy to fill a prescription.
1115	1115	1069 "Steering", a practice employed by a pharmacy benefit manager or carrier that channels a
1116	1116	1070prescription to a pharmacy in which a pharmacy benefit manager or carrier has an ownership
1117	1117	1071interest, and includes but is not limited to retail, mail-order, or specialty pharmacies.
1118	1118	1072 Section 2. (a) Any pharmacy benefit manager contracting with a pharmacy that operates
1119	1119	1073in the commonwealth shall comply with the provisions of this chapter.
1120	1120	1074 (b) A pharmacy benefit manager shall receive a license from the division before
1121	1121	1075conducting business in the commonwealth. A license granted pursuant to this section is not
1122	1122	1076transferable.
1123	1123	1077 (c) A license may be granted only when the division is satisfied that the entity possesses
1124	1124	1078the necessary organization, background expertise, and financial integrity to supply the services
1125	1125	1079sought to be offered.
1126	1126	1080 (d) The division may issue a license subject to restrictions or limitations upon the
1127	1127	1081authorization, including the type of services that may be supplied or the activities in which the
1128	1128	1082entity may be engaged.
1129	1129	1083 (e) A license shall be valid for a period of three years. The commissioner shall charge
1130	1130	1084application and renewal fees in the amount of $25,000
1131	1131	1085 (f) The division shall develop an application for licensure that includes at least the
1132	1132	1086following information: (i) the name of the pharmacy benefit manager; (ii) the address and contact
1133	1133	1087telephone number for the pharmacy benefit manager; (iii) the name and address of the pharmacy 52 of 77
1134	1134	1088benefit manager’s agent for service of process in the commonwealth; (iv) the name and address
1135	1135	1089of each person beneficially interested in the pharmacy benefit manager; and (v) the name and
1136	1136	1090address of each person with management or control over the pharmacy benefit manager.
1137	1137	1091 (g) The division may suspend, revoke, or place on probation a pharmacy benefit manager
1138	1138	1092license under any of the following circumstances: (i) the pharmacy benefit manager has engaged
1139	1139	1093in fraudulent activity that constitutes a violation of state or federal law; (ii) the division received
1140	1140	1094consumer complaints that justify an action under this chapter to protect the safety and interests of
1141	1141	1095consumers; (iii) the pharmacy benefit manager fails to pay an application fee for the license; or
1142	1142	1096(iv) the pharmacy benefit manager fails to comply with a requirement set forth in this chapter.
1143	1143	1097 (h) If an entity performs the functions of pharmacy benefit manager acts without
1144	1144	1098registering, it will be subject to a fine of $5,000 per day for the period they are found to be in
1145	1145	1099violation.
1146	1146	1100 Section 3
1147	1147	1101 (a) (i) The pharmacy benefit manager shall have a duty and obligation to perform
1148	1148	1102pharmacy benefit services with care, skill, prudence, diligence, and professionalism.
1149	1149	1103 (ii) In addition to the duties as may be prescribed by regulation:
1150	1150	1104 (1) A pharmacy benefit manager interacting with a covered individual shall have the
1151	1151	1105same duty to a covered individual as the health plan for whom it is performing pharmacy benefit
1152	1152	1106services. 53 of 77
1153	1153	1107 (2) A pharmacy benefit manager shall have a duty of good faith and fair dealing with all
1154	1154	1108parties, including but not limited to covered individuals and pharmacies, with whom it interacts
1155	1155	1109in the performance of pharmacy benefit services.
1156	1156	1110 Section 4
1157	1157	1111 (a) A pharmacy benefit manager shall provide a reasonably adequate and accessible
1158	1158	1112pharmacy benefit manager network for the provision of prescription drugs, which provides for
1159	1159	1113convenient patient access to pharmacies within a reasonable distance from a patient’s residence.
1160	1160	1114 (b) A pharmacy benefit manager may not deny a pharmacy the opportunity to participate
1161	1161	1115in a pharmacy benefit manager network at preferred participation status if the pharmacy is
1162	1162	1116willing to accept the terms and conditions that the pharmacy benefit manager has established for
1163	1163	1117other pharmacies as a condition of preferred network participation status.
1164	1164	1118 (c) A mail-order pharmacy shall not be included in the calculations for determining
1165	1165	1119pharmacy benefit manager network adequacy under this section.
1166	1166	1120 Section 5.
1167	1167	1121 (a) After the date of receipt of a clean claim for payment made by a pharmacy, a
1168	1168	1122pharmacy benefit manager shall not retroactively reduce payment on the claim, either directly or
1169	1169	1123indirectly, through aggregated effective rate, direct or indirect remuneration, quality assurance
1170	1170	1124program or otherwise, except if the claim is found not to be a clean claim during the course of a
1171	1171	1125routine audit performed pursuant to an agreement between the pharmacy benefit manager and the
1172	1172	1126pharmacy. When a pharmacy adjudicates a claim at the point of sale, the reimbursement amount
1173	1173	1127provided to the pharmacy by the pharmacy benefit manager shall constitute a final 54 of 77
1174	1174	1128reimbursement amount. Nothing in this section shall be construed to prohibit any retroactive
1175	1175	1129increase in payment to a pharmacy pursuant to a contract between the pharmacy benefit manager
1176	1176	1130or a pharmacy.
1177	1177	1131 (b) For the purpose of this section, "clean claim" means a claim that has no defect or
1178	1178	1132impropriety, including a lack of any required substantiating documentation, or other
1179	1179	1133circumstance requiring special treatment, including, but not limited to, those listed in subsection
1180	1180	1134(d) of this section, that prevents timely payment from being made on the claim.
1181	1181	1135 (c) A pharmacy benefit manager shall not recoup funds from a pharmacy in connection
1182	1182	1136with claims for which the pharmacy has already been paid unless the recoupment is:
1183	1183	1137 (1) otherwise permitted or required by law; or
1184	1184	1138 (2) the result of an audit, performed pursuant to a contract between the pharmacy benefit
1185	1185	1139manager and the pharmacy; or
1186	1186	1140 (d) The provisions of this section shall not apply to an investigative audit of pharmacy
1187	1187	1141records when:
1188	1188	1142 (1) fraud, waste, abuse or other intentional misconduct is indicated by physical review or
1189	1189	1143review of claims data or statements; or
1190	1190	1144 (2) other investigative methods indicate a pharmacy is or has been engaged in criminal
1191	1191	1145wrongdoing, fraud or other intentional or willful misrepresentation.
1192	1192	1146 (e) No pharmacy benefit manager shall charge or collect from an individual a copayment
1193	1193	1147or cost-sharing that exceeds the contracted amount by the pharmacy for which the pharmacy is 55 of 77
1194	1194	1148paid. If an individual pays a copayment, the pharmacy shall retain the adjudicated costs and the
1195	1195	1149pharmacy benefit manager shall not redact or recoup the adjudicated cost.
1196	1196	1150 Section 6
1197	1197	1151 (a) As used in this section:
1198	1198	1152 (1) “Generically equivalent drug”, a drug that is pharmaceutically and therapeutically
1199	1199	1153equivalent to the drug prescribed;
1200	1200	1154 (2)(A) “Maximum allowable cost list”, a listing of drugs or other methodology used by a
1201	1201	1155pharmacy benefit manager, directly or indirectly, setting the maximum allowable payment to a
1202	1202	1156pharmacy or pharmacist for a generic drug, brand-name drug, biologic product, or other
1203	1203	1157prescription drug.
1204	1204	1158 (B) Maximum allowable cost list includes without limitation:
1205	1205	1159 (i) Average acquisition cost, including national average drug acquisition cost;
1206	1206	1160 (ii) Average manufacturer price;
1207	1207	1161 (iii) Average wholesale price;
1208	1208	1162 (iv) Brand effective rate or generic effective rate;
1209	1209	1163 (v) Discount indexing;
1210	1210	1164 (vi) Federal upper limits;
1211	1211	1165 (vii) Wholesale acquisition cost; and 56 of 77
1212	1212	1166 (viii) Any other term that a pharmacy benefit manager or a carrier may use to establish
1213	1213	1167reimbursement rates to a pharmacist or pharmacy for pharmacist services;
1214	1214	1168 (3) “Pharmaceutical wholesaler”, as defined in section 36A of chapter 112;
1215	1215	1169 (4) “Pharmacist”, a pharmacist who, pursuant to the provisions of M.G.L. c. 112, § 24, is
1216	1216	1170registered by the Board to practice pharmacy;
1217	1217	1171 (5) “Pharmacist services”, products, goods, and services, or any combination of products,
1218	1218	1172goods, and services, provided as a part of the practice of pharmacy as defined in section 39D of
1219	1219	1173chapter 112;
1220	1220	1174 (6) “Pharmacy”, shall have the same meaning as defined in section 39D of chapter 112;
1221	1221	1175 (7) “Pharmacy acquisition cost” means the amount that a pharmaceutical wholesaler
1222	1222	1176charges for a pharmaceutical product as listed on the pharmacy's billing invoice;
1223	1223	1177 (8) “Pharmacy benefit manager”, as defined in section 1 of chapter 176X;
1224	1224	1178 (9) “Pharmacy benefit manager affiliate”, a pharmacy or pharmacist that directly or
1225	1225	1179indirectly, through one (1) or more intermediaries, owns or controls, is owned or controlled by,
1226	1226	1180or is under common ownership or control with a pharmacy benefits manager; and
1227	1227	1181 (10) “Pharmacy benefit plan or program”, a plan or program that pays for, reimburses,
1228	1228	1182covers the cost of, or otherwise provides for pharmacist services to individuals who reside in or
1229	1229	1183are employed in the commonwealth.
1230	1230	1184 (b) Before a pharmacy benefit manager places or continues a particular drug on a
1231	1231	1185maximum allowable cost list, the drug: 57 of 77
1232	1232	1186 (1) If the drug is a generically equivalent drug, it shall be listed as therapeutically
1233	1233	1187equivalent and pharmaceutically equivalent A or B rated in the United States Food and Drug
1234	1234	1188Administration's most recent version of the Orange Book or Green Book or have an NR or NA
1235	1235	1189rating by Medi-Span, Gold Standard, or a similar rating by a nationally recognized reference;
1236	1236	1190 (2) Shall be available for purchase by each pharmacy in the state from national or
1237	1237	1191regional wholesalers operating in the commonwealth; and
1238	1238	1192 (3) Shall not be obsolete.
1239	1239	1193 (c ) A pharmacy benefit manager shall:
1240	1240	1194 (1) Provide access to its maximum allowable cost list to each pharmacy subject to the
1241	1241	1195maximum allowable cost list;
1242	1242	1196 (2) Update its maximum allowable cost list on a timely basis, but in no event longer than
1243	1243	1197seven (7) calendar days from an increase of ten per cent or more in the pharmacy acquisition cost
1244	1244	1198from sixty per cent or more of the pharmaceutical wholesalers doing business in the state or a
1245	1245	1199change in the methodology on which the maximum allowable cost list is based or in the value of
1246	1246	1200a variable involved in the methodology;
1247	1247	1201 (3) Provide a process for each pharmacy subject to the maximum allowable cost list to
1248	1248	1202receive prompt notification of an update to the maximum allowable cost list; and
1249	1249	1203 (4)(A)(i) Provide a reasonable administrative appeal procedure to allow pharmacies to
1250	1250	1204challenge maximum allowable cost list and reimbursements made under a maximum allowable
1251	1251	1205cost list for a specific drug or drugs as:
1252	1252	1206 (a) Not meeting the requirements of this section; or 58 of 77
1253	1253	1207 (b) Being below the pharmacy acquisition cost.
1254	1254	1208 (ii) The reasonable administrative appeal procedure shall include the following:
1255	1255	1209 (a) A dedicated telephone number, email address, and website for the purpose of
1256	1256	1210submitting administrative appeals;
1257	1257	1211 (b) The ability to submit an administrative appeal directly to the pharmacy benefit
1258	1258	1212manager regarding the pharmacy benefits plan or program or through a pharmacy service
1259	1259	1213administrative organization; and
1260	1260	1214 (c) No less than thirty business days to file an administrative appeal.
1261	1261	1215 (B) The pharmacy benefit manager shall respond to the challenge under subdivision
1262	1262	1216(c)(4)(A) of this section within thirty business days after receipt of the challenge.
1263	1263	1217 (C) If a challenge is made under subdivision (c)(4)(A) of this section, the pharmacy
1264	1264	1218benefit manager shall within thirty business days after receipt of the challenge either:
1265	1265	1219 (i) If the appeal is upheld:
1266	1266	1220 (a) Make the change in the maximum allowable cost list payment to at least the pharmacy
1267	1267	1221acquisition cost;
1268	1268	1222 (b) Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in
1269	1269	1223question;
1270	1270	1224 (c) Provide the National Drug Code that the increase or change is based on to the
1271	1271	1225pharmacy or pharmacist; and 59 of 77
1272	1272	1226 (d) Make the change under subdivision (c)(4)(C)(i)(a) of this section effective for each
1273	1273	1227similarly situated pharmacy as defined by the payor subject to the maximum allowable cost list;
1274	1274	1228 (ii) If the appeal is denied, provide the challenging pharmacy or pharmacist the National
1275	1275	1229Drug Code and the name of the national or regional pharmaceutical wholesalers operating in the
1276	1276	1230commonwealth that have the drug currently in stock at a price below the maximum allowable
1277	1277	1231cost as listed on the maximum allowable cost list; or
1278	1278	1232 (iii) If the National Drug Code provided by the pharmacy benefit manager is not available
1279	1279	1233below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the
1280	1280	1234pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the
1281	1281	1235pharmacy benefit manager shall adjust the maximum allowable cost as listed on the maximum
1282	1282	1236allowable cost list above the challenging pharmacy's pharmacy acquisition cost and permit the
1283	1283	1237pharmacy to reverse and rebill each claim affected by the inability to procure the drug at a cost
1284	1284	1238that is equal to or less than the previously challenged maximum allowable cost.
1285	1285	1239 (d)(1) A pharmacy benefit manager shall not reimburse a pharmacy or pharmacist in the
1286	1286	1240commonwealth an amount less than the amount that the pharmacy benefit manager reimburses a
1287	1287	1241pharmacy benefit manager affiliate for providing the same pharmacist services.
1288	1288	1242 (2) The amount shall be calculated on a per unit basis based on the same generic product
1289	1289	1243identifier or generic code number.
1290	1290	1244 (e) A pharmacy or pharmacist may decline to provide the pharmacist services to a patient
1291	1291	1245or pharmacy benefit manager if, as a result of a maximum allowable cost list, a pharmacy or
1292	1292	1246pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing
1293	1293	1247pharmacist services. 60 of 77
1294	1294	1248 (f) This section does not apply to a maximum allowable cost list maintained by
1295	1295	1249MassHealth or the division of insurance.
1296	1296	1250 (g)(1)A violation of this section shall constitute an unfair or deceptive act or practice
1297	1297	1251pursuant to chapter 93A.
1298	1298	1252 Section 7.
1299	1299	1253 (a) No pharmacy benefit manager or representative of a pharmacy benefit manager shall
1300	1300	1254conduct spread pricing in the commonwealth.
1301	1301	1255 (b) A pharmacy benefit manager or representative of a pharmacy benefit manager that
1302	1302	1256violates this section shall be subject to the surcharge under section 8 of chapter 176X.
1303	1303	1257 (c) A pharmacy benefit manager shall report to the commissioner on a quarterly basis for
1304	1304	1258each healthcare insurer the following information:
1305	1305	1259 (A) The aggregate number of rebates received by the pharmacy benefit manager;
1306	1306	1260 (B) The aggregate number of rebates distributed to the appropriate healthcare insurer;
1307	1307	1261 (C) The aggregate number of rebates passed on to an insured of each healthcare insurer at
1308	1308	1262the point of sale that reduced the insured’s applicable deductible, copayment, coinsurance, or
1309	1309	1263other cost-sharing amount;
1310	1310	1264 (D) The individual and aggregate amount paid by the healthcare insurer to the pharmacy
1311	1311	1265benefit manager for pharmacist services itemized by pharmacy, by product, and by goods and
1312	1312	1266services; and 61 of 77
1313	1313	1267 (E) The individual and aggregate amount a pharmacy benefit manager paid for
1314	1314	1268pharmacist services itemized by pharmacy, by product, and by goods and services.
1315	1315	1269 (d) The commissioner, in consultation with the health policy commission and the center
1316	1316	1270for health information and analysis, shall annually report on the rebates and amounts reported
1317	1317	1271under subsection (c), which shall be public record.
1318	1318	1272 Section 8.
1319	1319	1273 (a) A pharmacy benefits manager that engages in the practices of (i) spread pricing; (ii)
1320	1320	1274steering; or (iii) imposing point-of-sale fees or retroactive fees shall be subject to a surcharge
1321	1321	1275payable to the division of 10 percent on the aggregate dollar amount it reimbursed pharmacies in
1322	1322	1276the previous calendar year for prescription drugs in the commonwealth.
1323	1323	1277 (b) By March 1 of each year, a pharmacy benefit manager shall provide a letter to the
1324	1324	1278commissioner attesting as to whether or not, in the previous calendar year, it engaged in the any
1325	1325	1279of the practices under subsection (a). The pharmacy benefit manager shall also submit to the
1326	1326	1280commissioner, in a form and manner and by a date specified by the commissioner, data detailing
1327	1327	1281all prescription drug claims it administered in the commonwealth for insured residents on behalf
1328	1328	1282of each health plan client and any other data the commissioner deems necessary to evaluate
1329	1329	1283whether a pharmacy benefit manager may be engaged in any of the practices under subsection
1330	1330	1284(a)
1331	1331	1285 (c) By April 1 of each year, a pharmacy benefit manager shall pay into the general fund
1332	1332	1286the surcharge owed, if any, as contained in the report submitted pursuant to subsection (b) of this
1333	1333	1287section. 62 of 77
1334	1334	1288 (d) Nothing in this section shall be construed to authorize the practices of steering or
1335	1335	1289imposing point-of-sale fees or retroactive fees where otherwise prohibited by law.
1336	1336	1290 (e) The commissioner, in consultation with the health policy commission and the center
1337	1337	1291for health information and analysis, shall prepare an aggregate report reflecting the total number
1338	1338	1292of prescriptions administered by the reporting pharmacy benefit manager with the total sum due
1339	1339	1293to the commonwealth, which shall be public record.
1340	1340	1294 Section 9.
1341	1341	1295 (a) Any person operating a health plan whose contracted pharmacy benefits manager
1342	1342	1296engages in the practices of (i) spread pricing; (ii) steering; or (iii) imposing point-of-sale fees or
1343	1343	1297retroactive fees in connection with its health plans shall be subject to a surcharge payable to the
1344	1344	1298division of 10 percent on the aggregate dollar amount its pharmacy benefit manager reimbursed
1345	1345	1299pharmacies on its behalf in the previous calendar year for prescription drugs in the
1346	1346	1300commonwealth.
1347	1347	1301 (b) By March 1 of each year, any person operating a health plan and licensed in the
1348	1348	1302commonwealth that utilizes a contracted pharmacy benefit manager shall provide a letter to the
1349	1349	1303commissioner attesting as to whether or not, in the previous calendar year, its contracted
1350	1350	1304pharmacy benefit manager engaged in any of the practices under subsection (a) in connection
1351	1351	1305with its health plans. The health plan shall also submit to the commissioner, in a form and
1352	1352	1306manner and by a date specified by the commissioner, data detailing all prescription drug claims
1353	1353	1307its contracted pharmacy benefit manager administered in the commonwealth for insured
1354	1354	1308residents and any other data the commissioner deems necessary to evaluate whether a health
1355	1355	1309plan's pharmacy benefit manager may be engaged in any of the practices under subsection (a). 63 of 77
1356	1356	1310 (c) By April 1 of each year, any person operating a health plan and licensed under this
1357	1357	1311title shall pay into the general fund the surcharge owed, if any, as contained in the report
1358	1358	1312submitted pursuant to subsection (b) of this section.
1359	1359	1313 (d) Nothing in this section shall be construed to authorize the practices of steering or
1360	1360	1314imposing point-of-sale fees or retroactive fees where otherwise prohibited by law.
1361	1361	1315 (e) The commissioner, in consultation with the health policy commission and the center
1362	1362	1316for health information and analysis, shall prepare an aggregate report reflecting the total number
1363	1363	1317of prescriptions administered by the reporting health plan along with the total sum due to the
1364	1364	1318commonwealth, which shall be public record.
1365	1365	1319 Section 10.
1366	1366	1320 When calculating an insured’s contribution to any applicable cost sharing requirement, a
1367	1367	1321pharmacy benefit manager shall include any cost-sharing amounts paid by the insured or on
1368	1368	1322behalf of the insured by another person.
1369	1369	1323 Section 11.
1370	1370	1324 (a) A pharmacy benefit manager shall conduct an audit of the records of a pharmacy in
1371	1371	1325accordance with paragraphs (1) to (13), inclusive.
1372	1372	1326 (1) The contract between a pharmacy and a pharmacy benefit manager shall identify and
1373	1373	1327describe the audit procedures in detail.
1374	1374	1328 (2) With the exception of an investigative fraud audit, the auditor shall give the pharmacy
1375	1375	1329written notice at least 2 weeks prior to conducting the initial on-site audit for each audit cycle. 64 of 77
1376	1376	1330 (3) A pharmacy benefit manager shall not audit claims beyond 2 years prior to the date of
1377	1377	1331audit.
1378	1378	1332 (4) The auditor shall not interfere with the delivery of pharmacist services to a patient and
1379	1379	1333shall make a reasonable effort to minimize the inconvenience and disruption to the pharmacy
1380	1380	1334operations during the audit process.
1381	1381	1335 (5) Any audit that involves clinical or professional judgment shall be conducted by, or in
1382	1382	1336consultation with, a licensed pharmacist from any state.
1383	1383	1337 (6) A finding of an overpayment or underpayment shall be based on the actual
1384	1384	1338overpayment or underpayment. A statistically sound calculation for overpayment or
1385	1385	1339underpayment may be used to determine recoupment as part of a settlement as agreed to by the
1386	1386	1340pharmacy.
1387	1387	1341 (7) The auditor shall audit each pharmacy under the same standards and parameters with
1388	1388	1342which they audit other similarly situated pharmacies.
1389	1389	1343 (8) An audit shall not be initiated or scheduled during the first 5 calendar days of any
1390	1390	1344month for any pharmacy that averages more than 600 prescriptions per week without the
1391	1391	1345pharmacy's consent.
1392	1392	1346 (9) A preliminary audit report shall be delivered to the pharmacy not later than 30 days
1393	1393	1347after the conclusion of the audit.
1394	1394	1348 (10) The preliminary audit report shall be signed and shall include the signature of any
1395	1395	1349pharmacist participating in the audit. 65 of 77
1396	1396	1350 (11) A pharmacy benefit manager shall not withhold payment to a pharmacy for
1397	1397	1351reimbursement claims as a means to recoup money until after the final internal disposition of an
1398	1398	1352audit, including the appeals process, as provided in subsection (b), unless fraud or
1399	1399	1353misrepresentation is reasonably suspected, or the discrepant amount exceeds $15,000.
1400	1400	1354 (12) The auditor shall provide a copy of the final audit report to the pharmacy and plan
1401	1401	1355sponsor within 30 days following the pharmacy's receipt of the signed preliminary audit report or
1402	1402	1356the completion of the appeals process, as provided in subsection (b), whichever is later.
1403	1403	1357 (13) No auditing company or agent shall receive payment based upon a percentage of the
1404	1404	1358amount recovered or other financial incentive tied to the findings of the audit.
1405	1405	1359 (b)(1) Each auditor shall establish an appeals process under which a pharmacy may
1406	1406	1360appeal findings in a preliminary audit.
1407	1407	1361 (2) To appeal a finding, a pharmacy may use the records of a hospital, physician, or other
1408	1408	1362authorized prescriber to validate the record with respect to orders or refills of prescription drugs
1409	1409	1363or devices.
1410	1410	1364 (3) A pharmacy shall have 30 days to appeal any discrepancy found during the
1411	1411	1365preliminary audit.
1412	1412	1366 (4) The National Council for Prescription Drug Programs or any other recognized
1413	1413	1367national industry standard shall be used to evaluate claims submission and product size disputes.
1414	1414	1368 (5) If an audit results in the identification of any clerical or record-keeping errors in a
1415	1415	1369required document or record, the pharmacy shall not be subject to recoupment of funds by the
1416	1416	1370pharmacy benefit manager; provided, that the pharmacy may provide proof that the patient 66 of 77
1417	1417	1371received the medication billed to the plan via patient signature logs or other acceptable methods,
1418	1418	1372unless there is financial harm to the plan or errors that exceed the normal course of business.
1419	1419	1373 (c) This section shall not apply to any audit or investigation of a pharmacy that involves
1420	1420	1374potential fraud, willful misrepresentation or abuse, including, but not limited to, investigative
1421	1421	1375audits or any other statutory or regulatory provision which authorizes investigations relating to
1422	1422	1376insurance fraud.
1423	1423	1377 (d) This section shall not apply to a public health care payer, as defined in section 1 of
1424	1424	1378chapter 12C.
1425	1425	1379 (e) The commissioner shall promulgate regulations to enforce this section.
1426	1426	1380 Section 12.
1427	1427	1381 (a) The commissioner may make an examination of the affairs of a Pharmacy Benefit
1428	1428	1382Manager when the commissioner deems prudent but not less frequently than once every 3 years.
1429	1429	1383The focus of the examination shall be to ensure that a pharmacy benefit manager is able to meet
1430	1430	1384its responsibilities under contracts with licensed carriers. The examination shall be conducted
1431	1431	1385according to the procedures set forth in subsection (6) of section 4 of chapter 175.
1432	1432	1386 (b) The commissioner, a deputy or an examiner may conduct an on-site examination of
1433	1433	1387each pharmacy benefit manager in the commonwealth to thoroughly inspect and examine its
1434	1434	1388affairs.
1435	1435	1389 (c) The charge for each such examination shall be determined annually according to the
1436	1436	1390procedures set forth in subsection (6) of section 4 of chapter 175. 67 of 77
1437	1437	1391 (d) Not later than 60 days following completion of the examination, the examiner in
1438	1438	1392charge shall file with the commissioner a verified written report of examination under oath.
1439	1439	1393Upon receipt of the verified report, the commissioner shall transmit the report to the pharmacy
1440	1440	1394benefit manager examined with a notice which shall afford the pharmacy benefit manager
1441	1441	1395examined a reasonable opportunity of not more than 30 days to make a written submission or
1442	1442	1396rebuttal with respect to any matters contained in the examination report. Within 30 days of the
1443	1443	1397end of the period allowed for the receipt of written submissions or rebuttals, the commissioner
1444	1444	1398shall consider and review the reports together with any written submissions or rebuttals and any
1445	1445	1399relevant portions of the examiner’s work papers and enter an order:
1446	1446	1400 (i) adopting the examination report as filed with modifications or corrections and, if the
1447	1447	1401examination report reveals that the pharmacy benefit manager is operating in violation of this
1448	1448	1402section or any regulation or prior order of the commissioner, the commissioner may order the
1449	1449	1403pharmacy benefit manager to take any action the commissioner considered necessary and
1450	1450	1404appropriate to cure such violation;
1451	1451	1405 (ii) rejecting the examination report with directions to examiners to reopen the
1452	1452	1406examination for the purposes of obtaining additional data, documentation or information and re-
1453	1453	1407filing pursuant to the above provisions; or
1454	1454	1408 (iii) calling for an investigatory hearing with no less than 20 days’ notice to the pharmacy
1455	1455	1409benefit manager for purposes of obtaining additional documentation, data, information and
1456	1456	1410testimony.
1457	1457	1411 (e) Notwithstanding any general or special law to the contrary, including clause 26 of
1458	1458	1412section 7 of chapter 4 and chapter 66, the records of any such audit, examination or other 68 of 77
1459	1459	1413inspection and the information contained in the records, reports or books of any pharmacy
1460	1460	1414benefit manager examined pursuant to this section shall be confidential and open only to the
1461	1461	1415inspection of the commissioner, or the examiners and assistants. Access to such confidential
1462	1462	1416material may be granted by the commissioner to law enforcement officials of the commonwealth
1463	1463	1417or any other state or agency of the federal government at any time, so long as the agency or
1464	1464	1418office receiving the information agrees in writing to keep such material confidential. Nothing
1465	1465	1419herein shall be construed to prohibit the required production of such records, and information
1466	1466	1420contained in the reports of such company or organization before any court of the commonwealth
1467	1467	1421or any master or auditor appointed by any such court, in any criminal or civil proceeding,
1468	1468	1422affecting such pharmacy benefit manager, its officers, partners, directors or employees. The final
1469	1469	1423report of any such audit, examination or any other inspection by or on behalf of the division of
1470	1470	1424insurance shall be a public record.
1471	1471	1425 Section 13.
1472	1472	1426 A pharmacy benefit manager shall be required to submit to periodic audits by a licensed
1473	1473	1427carrier if the pharmacy benefit manager has entered into a contract with the carrier to provide
1474	1474	1428pharmacy benefits to the carrier or its members. The commissioner shall direct or provide
1475	1475	1429specifications for such audits
1476	1476	1430 Section 14.
1477	1477	1431 (a) A contract between a pharmacy benefit manager and a participating pharmacy or
1478	1478	1432pharmacist or contracting agent shall not include any provision that prohibits, restricts, or limits a
1479	1479	1433pharmacist or contracting agent or pharmacy’s right to provide an insured with information on
1480	1480	1434the amount of the insured's cost share for such insured's prescription drug and the clinical 69 of 77
1481	1481	1435efficacy of a more affordable alternative drug if one is available. Neither a pharmacy nor a
1482	1482	1436pharmacist shall be penalized by a pharmacy benefit manager for disclosing such information to
1483	1483	1437an insured or for selling to an insured a more affordable alternative if one is available.
1484	1484	1438 (b) A pharmacy benefit manager shall not charge a pharmacist or pharmacy a fee related
1485	1485	1439to the adjudication of a claim, including, without limitation, a fee for: (i) the receipt and
1486	1486	1440processing of a pharmacy claim; (ii) the development or management of claims processing
1487	1487	1441services in a pharmacy benefit manager network; or (iii) participation in a pharmacy benefit
1488	1488	1442manager network, unless such fee is set out in a contract between the pharmacy benefit manager
1489	1489	1443and the pharmacist or contracting agent or pharmacy.
1490	1490	1444 (c) A contract between a pharmacy benefit manager and a participating pharmacy or
1491	1491	1445pharmacist or contracting agent shall not include any provision that prohibits, restricts, or limits
1492	1492	1446disclosure of information to the division deemed necessary by the division to ensure a pharmacy
1493	1493	1447benefit manager's compliance with the requirements under this section or section 21C of chapter
1494	1494	144894C.
1495	1495	1449 SECTION 62. Notwithstanding any general or special law to the contrary, the health
1496	1496	1450policy commission, in consultation with the center for health information and analysis, the
1497	1497	1451executive office of health and human services and the division of insurance, shall produce
1498	1498	1452interim and final reports on the use of insulin in the commonwealth and the effects of capping
1499	1499	1453copayments and eliminating deductible and co-insurance requirements for insulin for individuals
1500	1500	1454with diabetes on health care access and system cost.
1501	1501	1455 The interim and final report shall include, but not be limited to: (i) rates of insulin
1502	1502	1456utilization; (ii) an analysis of the use of insulin, broken down by patient demographics, 70 of 77
1503	1503	1457geographic region and insulin delivery device; (iii) annual plan costs and member premiums; (iv)
1504	1504	1458the average price of insulin; (v) the average insulin price net of rebates or discounts received by
1505	1505	1459or accrued directly or indirectly by health insurance carriers; (vi) average and total out-of-pocket
1506	1506	1460expenditures on insulin delivery devices and glucose monitoring tests that are not included as
1507	1507	1461part of an insulin prescription; (vii) an analysis of the impact of capping co-payments and
1508	1508	1462eliminating deductible and co-insurance requirements for insulin on patient access to and cost of
1509	1509	1463care by patient demographics and geographic region; (viii) additional funding sources for the
1510	1510	1464Prescription Drug Cost Assistance Trust Fund established in section 2RRRRR of chapter 29 of
1511	1511	1465the General Laws; and (ix) any barriers to accessing insulin for individuals with diabetes and
1512	1512	1466policy recommendations for resolving such barriers. The interim report, including any
1513	1513	1467recommendations for expanding access to insulin for individuals with diabetes, shall be filed
1514	1514	1468with the clerks of the house of representatives and senate, the joint committee on public health,
1515	1515	1469the joint committee on health care financing and the house and senate committees on ways and
1516	1516	1470means not later than 18 months after the effective date of this act. The final report, including any
1517	1517	1471recommendations for expanding access to insulin for individuals with diabetes, shall be filed
1518	1518	1472with the clerks of the house of representatives and senate, the joint committee on public health,
1519	1519	1473the joint committee on health care financing and the house and senate committees on ways and
1520	1520	1474means not later than 3 years after the effective date of this act.
1521	1521	1475 SECTION 63. (a) Notwithstanding any general or special law to the contrary, the
1522	1522	1476commonwealth health insurance connector authority, in consultation with the division of
1523	1523	1477insurance, shall report on the impact of pharmaceutical pricing on health care costs and outcomes
1524	1524	1478for ConnectorCare and non-group and small group plans offered through the connector and its
1525	1525	1479members. 71 of 77
1526	1526	1480 The report shall include, but not be limited to: (i) information on the differential between
1527	1527	1481medication list price and price net of rebates for plans offered and the impact of those
1528	1528	1482differentials on member premiums; (ii) the relationship between medication list price and
1529	1529	1483member cost-sharing requirements; (iii) the impact of medication price changes over time on
1530	1530	1484premium and out-of-pocket costs in plans authorized under section 3 of chapter 176J of the
1531	1531	1485General Laws offered through the commonwealth health insurance connector authority; (iv)
1532	1532	1486trends in changes in medication list price and price net of rebates by health plan; (v) an analysis
1533	1533	1487of the impact of member out-of-pocket costs on medication utilization and member experience;
1534	1534	1488and (vi) an analysis of the impact of medication list price and price net of rebates on member
1535	1535	1489formulary access to medications. Data collected under this subsection shall be protected as
1536	1536	1490confidential and shall not be a public record under clause Twenty-sixth of section 7 of chapter 4
1537	1537	1491or under chapter 66 of the General Laws.
1538	1538	1492 The report shall be submitted to the joint committee on health care financing and the
1539	1539	1493house and senate committees on ways and means not later than July 1, 2025.
1540	1540	1494 (b) In fiscal year 2024, the amount required to be paid pursuant to the last paragraph of
1541	1541	1495section 6 of chapter 6D of the General Laws shall be increased by $500,000; provided, however,
1542	1542	1496that said $500,000 shall be provided to the commonwealth health insurance connector authority
1543	1543	1497not later than October 14, 2023 for data collection and analysis costs associated with the report
1544	1544	1498required by this section.
1545	1545	1499 SECTION 64. Notwithstanding any general or special law to the contrary, there shall be a
1546	1546	1500special commission to examine the feasibility of: (i) establishing a system for the bulk
1547	1547	1501purchasing and distribution of pharmaceutical products with a significant public health benefit 72 of 77
1548	1548	1502and the potential for significant health care cost savings for consumers through overall increased
1549	1549	1503purchase capacity; and (ii) making bulk purchase pricing information available to purchasers in
1550	1550	1504other states.
1551	1551	1505 The commission shall consist of: the commissioner of public health or a designee, who
1552	1552	1506shall serve as chair; the executive director of the group insurance commission or a designee; the
1553	1553	1507chief of pharmacy of the state office for pharmacy services; the MassHealth director of
1554	1554	1508pharmacy; the secretary of technology services and security; and 9 members to be appointed by
1555	1555	1509the commissioner of public health, 2 of whom shall be health care economists, 1 of whom shall
1556	1556	1510be an expert in health law and policy innovation, 1 of whom shall be an academic with relevant
1557	1557	1511expertise in the field, 1 of whom shall be a representative from a community health center, 1 of
1558	1558	1512whom shall be the chief executive officer of a hospital licensed in the commonwealth, 1 of
1559	1559	1513whom shall be a representative of the Massachusetts Association of Health Plans, Inc., 1 of
1560	1560	1514whom shall be a representative of Blue Cross Blue Shield of Massachusetts, Inc. and 1 of whom
1561	1561	1515shall be a member of the public with experience with health care and consumer protection.
1562	1562	1516 The commission shall hold not less than 3 public hearings in different geographic areas of
1563	1563	1517the commonwealth, accept input from the public and solicit expert testimony from individuals
1564	1564	1518representing health insurance carriers, pharmaceutical companies, independent and chain
1565	1565	1519pharmacies, hospitals, municipalities, health care practitioners, health care technology
1566	1566	1520professionals, community health centers, substance abuse disorder providers, public health
1567	1567	1521educational institutions and other experts identified by the commission.
1568	1568	1522 The commission shall consider: (i) the process by which the commonwealth could make
1569	1569	1523bulk purchases of pharmaceutical products with a significant public health benefit and the 73 of 77
1570	1570	1524potential for significant health care cost savings to consumers; (ii) the process by which both
1571	1571	1525governmental and nongovernmental entities may participate in a collaborative to purchase
1572	1572	1526pharmaceutical products with a significant public health benefit and the potential for significant
1573	1573	1527health care cost savings; (iii) the feasibility of developing an electronic information interchange
1574	1574	1528system to exchange bulk purchase price information with partnering states; (iv) potential sources
1575	1575	1529of funding available to implement bulk purchases; (v) potential cost savings of bulk purchases to
1576	1576	1530the commonwealth or other participating nongovernmental entities; (vi) the feasibility of
1577	1577	1531partnering with the federal government and or other states in the New England region; and (vii)
1578	1578	1532any other factors that the commission deems relevant.
1579	1579	1533 The commission shall file a report of its analysis, along with any recommended
1580	1580	1534legislation, if any, to the clerks of the senate and house of representatives, the house and senate
1581	1581	1535committees on ways and means, the joint committee on health care financing, the joint
1582	1582	1536committee on public health, the joint committee on elder affairs and the joint committee on
1583	1583	1537mental health, substance abuse and recovery not later than September 1, 2024.
1584	1584	1538 SECTION 65. (a) As used in this section, the following words shall have the following
1585	1585	1539meanings, unless the context clearly requires otherwise:
1586	1586	1540 “Chain pharmacist”, a pharmacist employed by a retail drug organization operating not
1587	1587	1541less than 10 retail drug stores within the commonwealth under section 39 of chapter 112 of the
1588	1588	1542General Laws.
1589	1589	1543 “Independent pharmacist”, a pharmacist actively engaged in the business of retail
1590	1590	1544pharmacy and employed in an organization of not more than 9 registered retail drugstores in the 74 of 77
1591	1591	1545commonwealth under said section 39 of said chapter 112 that employs not more than a total of
1592	1592	154620 full-time pharmacists.
1593	1593	1547 (b) There shall be a task force to: (i) review the drug supply chain including, but not
1594	1594	1548limited to: (A) plan and pharmacy benefit manager reimbursements to pharmacies; (B)
1595	1595	1549wholesaler or pharmacy service administrative organization prices to pharmacies; and (C) drug
1596	1596	1550manufacturer prices to pharmacies; (ii) review ways to recognize the unique challenges of small
1597	1597	1551and independent pharmacies; (iii) identify methods to increase pricing transparency throughout
1598	1598	1552the supply chain; (iv) make recommendations on the use of multiple maximum allowable costs
1599	1599	1553lists and their frequency of use for mail order products; (v) review the utilization of maximum
1600	1600	1554allowable costs lists or similar reimbursement structures established by a pharmacy benefit
1601	1601	1555manager or payer; (vi) review the availability of drugs to independent and chain pharmacies on
1602	1602	1556the maximum allowable cost list or any similar reimbursement structures established by a
1603	1603	1557pharmacy benefit manager or payer; (vii) review the pharmacy acquisition cost from national or
1604	1604	1558regional wholesalers that serve pharmacies compared to the reimbursement amount provided
1605	1605	1559through a maximum allowable cost list or any similar reimbursement structures established by a
1606	1606	1560pharmacy benefit manager or payer and the conditions under which an adjustment to a
1607	1607	1561reimbursement is appropriate; (viii) review the timing of pharmacy purchases of products and the
1608	1608	1562relative risk of list price changes related to the timing of dispensing the products; (ix) assess
1609	1609	1563ways to increase transparency for chain and independent pharmacists to understand the
1610	1610	1564methodology used by a pharmacy benefit manager or payer to develop a maximum allowable
1611	1611	1565cost list or any similar reimbursement structure established by the pharmacy benefit manager or
1612	1612	1566payer; (x) assess the prevalence and appropriateness of pharmacy benefit managers requiring, or
1613	1613	1567using financial incentives or penalties to incentivize, customer use of pharmacies with whom the 75 of 77
1614	1614	1568pharmacy benefit manager has an ownership or financial interest; (xi) examine the impact of the
1615	1615	1569merger or consolidation of pharmacy benefit managers and health carrier clients on drug costs;
1616	1616	1570(xii) review current appeals processes for a chain or independent pharmacist to request an
1617	1617	1571adjustment on a reimbursement subject to a maximum allowable cost list or any similar
1618	1618	1572reimbursement structure established by a pharmacy benefit manager or payer; and (xiii) evaluate
1619	1619	1573the effect of differences between pharmacy benefit manager payments to pharmacies and charges
1620	1620	1574made to health carrier clients on drug price.
1621	1621	1575 (c) The task force shall consist of: the commissioner of insurance or a designee, who shall
1622	1622	1576serve as chair; and 6 members to be appointed by the commissioner, 2 of whom shall be
1623	1623	1577independent pharmacists employed in the independent pharmacy setting or representatives of
1624	1624	1578independent pharmacies, 2 of whom shall be chain pharmacists employed in the chain pharmacy
1625	1625	1579setting or representatives of chain pharmacies and 2 of whom shall be representatives of a
1626	1626	1580pharmacy benefit managers or payers who manage their own pharmacy benefit services. If more
1627	1627	1581than 1 independent pharmacist is appointed, each appointee shall represent a distinct practice
1628	1628	1582setting. If more than 1 chain pharmacist is appointed, each appointee shall represent a distinct
1629	1629	1583practice setting. A pharmacy benefit manager or payer appointed to the task force shall not be
1630	1630	1584co-owned or have any ownership relationship with any other payer, pharmacy benefit manager or
1631	1631	1585chain pharmacist also appointed to the task force.
1632	1632	1586 (d) The commissioner shall file the task force’s findings with the clerks of the house of
1633	1633	1587representatives and the senate, the joint committee on health care financing and the house and
1634	1634	1588senate committees on ways and means not later than December 1, 2024. 76 of 77
1635	1635	1589 SECTION 66. The health policy commission shall consult with relevant stakeholders,
1636	1636	1590including, but not limited to, consumers, consumer advocacy organizations, organizations
1637	1637	1591representing people with disabilities and chronic health conditions, providers, provider
1638	1638	1592organizations, payers, pharmaceutical manufacturers, pharmacy benefit managers and health care
1639	1639	1593economists and other academics, to assist in the development and periodic review of regulations
1640	1640	1594to implement section 20 of chapter 6D of the General Laws, including, but not limited to: (i)
1641	1641	1595establishing the criteria and processes for identifying the proposed value of an eligible drug as
1642	1642	1596defined in said section 20 of said chapter 6D; and (ii) determining the appropriate price increase
1643	1643	1597for a public health essential drug as described within the definition of eligible drug in said
1644	1644	1598section 20 of said chapter 6D.
1645	1645	1599 The commission shall hold its first public outreach not more than 45 days after the
1646	1646	1600effective date of this act and shall, to the extent possible, ensure fair representation and input
1647	1647	1601from a diverse array of stakeholders.
1648	1648	1602 SECTION 67. Notwithstanding subsection (b) of section 15A of chapter 6D of the
1649	1649	1603General Laws, for the purposes of providing early notice under said section 15A of said chapter
1650	1650	16046D, the health policy commission shall determine a significant price increase for a generic drug
1651	1651	1605to be defined as a generic drug priced at $100 or more per wholesale acquisition cost unit that
1652	1652	1606increases in cost by 100 per cent or more during any 12-month period.
1653	1653	1607 SECTION 68. Section 67 is hereby repealed.
1654	1654	1608 SECTION 69. The drug access program, established in section 16DD of chapter 6A of
1655	1655	1609the General Laws, shall take effect not later than 1 year after the effective date of this act. 77 of 77
1656	1656	1610 SECTION 70. To implement chapter 63E of the General Laws, as inserted by section 44,
1657	1657	1611the commissioner of revenue shall promulgate regulations or other guidance regarding the
1658	1658	1612reporting and payment of the penalty as soon as practicable after the effective date of this act.
1659	1659	1613 SECTION 71. Chapter 63E of the General Laws, as inserted by section 44, shall apply to
1660	1660	1614sales commencing on or after the effective date of this act.
1661	1661	1615 SECTION 72. Sections 22 and 40 shall take effect on July 1, 2024.
1662	1662	1616 SECTION 73. Sections 42, 47, 49, 52, 54 and 56 shall take effect January 1, 2024.
1663	1663	1617 SECTION 74. Section 59 shall take effect on July 1, 2024.
1664	1664	1618 SECTION 75. The commissioner of insurance shall promulgate regulations to implement
1665	1665	1619chapter 176X of the General Laws, as inserted by section 61, not later than 1 year after the
1666	1666	1620effective date of this act.
1667	1667	1621 SECTION 76. Section 68 shall take effect on January 1, 2025.