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SENATE DOCKET, NO. 193 FILED ON: 1/12/2023
SENATE . . . . . . . . . . . . . . No. 715
The Commonwealth of Massachusetts
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PRESENTED BY:
Bruce E. Tarr
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to ensure access to prescription medications.
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PETITION OF:
NAME:DISTRICT/ADDRESS :Bruce E. TarrFirst Essex and Middlesex 1 of 7
SENATE DOCKET, NO. 193 FILED ON: 1/12/2023
SENATE . . . . . . . . . . . . . . No. 715
By Mr. Tarr, a petition (accompanied by bill, Senate, No. 715) of Bruce E. Tarr for legislation to
ensure access to prescription medications. Financial Services.
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Third General Court
(2023-2024)
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An Act to ensure access to prescription medications.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Chapter 176D is hereby amended by adding, after section3B, the following
2section:-
3 Section 3C. (a) For the purposes of this section the term "maximum allowable cost list"
4shall mean a list of drugs, medical products or devices, or both medical products and devices, for
5which a maximum allowable cost has been established by a pharmacy benefits manager or
6covered entity. The term "maximum allowable cost" shall mean the maximum amount that a
7pharmacy benefits manager or covered entity will reimburse a pharmacy for the cost of a drug or
8a medical product or device inclusive of all discounts when the claim is processed or taken
9retroactively
10 (b) Before a pharmacy benefits manager or covered entity may place a drug on a
11maximum allowable cost list the drug must be listed as "A" or "AB" rated in the most recent
12version of the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, also 2 of 7
13known as the Orange Book, or has an "NR" or "NA" rating or a similar rating by a nationally
14recognized reference; and that there are at least two therapeutically equivalent, multiple source
15drugs, or at least one generic drug available from one manufacturer, available for purchase by
16network pharmacies from national or regional wholesalers.
17 (c) If a drug that has been placed on a maximum allowable cost list no longer meets the
18requirements of subsection (a), the drug shall be removed from the maximum allowable cost list
19by the pharmacy benefits manager or covered entity within 3 business days after the drug no
20longer meets the requirements of subsection (a).
21 (d) A pharmacy benefits manager or covered entity shall make available to each
22pharmacy with which the pharmacy benefits manager or covered entity has a contract and to
23each pharmacy included in a network of pharmacies served by a pharmacy services
24administrative organization with which the pharmacy benefits manager or covered entity has a
25contract, at the beginning of the term of a contract upon renewal of a contract, or upon request:
26 (1) The sources used to determine the maximum allowable costs for the drugs and
27medical products and devices on each maximum allowable cost list;
28 (2) Every maximum allowable cost for individual drugs used by that pharmacy benefits
29manager or covered entity for patients served by that contracted pharmacy; and
30 (3) Upon request, every maximum allowable cost list used by that pharmacy benefits
31manager or covered entity for patients served by that contracted pharmacy.
32 (e) A pharmacy benefits manager or covered entity shall: 3 of 7
33 (1) Ensure the maxim allowable cost (if used) or the ingredient cost (if not used) is equal
34to or greater than the pharmacies acquisition cost for all covered medications. A maximum
35allowable cost equal to or greater than the National Average Drug Acquisition Cost shall be
36deemed in compliance with the requirement to ensure it is greater than or equal to the pharmacies
37acquisition cost.
38 (2) Ensure the maximum allowable cost for non-affiliated pharmacies is equal to or
39greater than the maximum allowable cost to pharmacies affiliated with or owned by the
40pharmacy benefit manager.
41 (3) The pharmacy benefit manager shall update each maximum allowable cost list at least
42every 3 business days(4) Make the updated lists available to every pharmacy with which the
43pharmacy benefits manager or covered entity has a contract and to every pharmacy included in a
44network of pharmacies served by a pharmacy services administrative organization with which
45the pharmacy benefits manager or covered entity has a contract, in a readily accessible, secure
46and usable web-based format or other comparable format or process; and
47 (5) Utilize the updated maximum allowable costs to calculate the payments made to the
48contracted pharmacies within 2 business days.
49 (f) A pharmacy benefits manager or covered entity shall establish a clearly defined
50process through which a pharmacy may contest the cost for a particular drug or medical product
51or device.
52 (g) A pharmacy may base its appeal on one or more of the following: 4 of 7
53 (1) The ingredient cost established for a particular drug or medical product or device is
54below the cost at which the drug or medical product or device is generally available for purchase
55by Massachusetts licensed wholesalers currently operating in the state; or
56 (2) The pharmacy benefits manager or covered entity has placed a drug on the maximum
57allowable cost list without properly determining that the requirements of subsection (a).
58 (h) The pharmacy must file its appeal within seven business days of its submission of the
59initial claim for reimbursement for the drug or medical product or device. A Pharmacy Services
60Administrative Organization (PSAO) may appeal on behalf of a pharmacy or group of
61pharmacies. The pharmacy benefits manager or covered entity must make a final determination
62resolving the pharmacy's appeal within seven business days of the pharmacy benefits manager or
63covered entity's receipt of the appeal.
64 (i) If the final determination is a denial of the pharmacy's appeal, the pharmacy benefits
65manager or covered entity must state the reason for the denial and provide the national drug code
66of an equivalent drug that is generally available for purchase by pharmacies in this state from
67national or regional wholesalers licensed by the state at a price which is equal to or less than the
68cost for that drug.
69 (j) If a pharmacy's appeal is determined to be valid by the pharmacy benefits manager or
70covered entity, the pharmacy benefits manager or covered entity shall retroactively adjust the
71cost of the drug or medical product or device and reprocess all claims that were paid incorrectly.
72The adjustment shall be effective from the date the pharmacy's appeal was filed, and the
73pharmacy benefits manager or covered entity shall provide reimbursement for all reprocessed
74claims. 5 of 7
75 (k) Once a pharmacy's appeal is determined to be valid by the pharmacy benefits manager
76or covered entity, the pharmacy benefits manager or covered entity shall adjust the cost of the
77drug or medical product or device for all similar pharmacies in the network as determined by the
78pharmacy benefits manager within 3 business days.
79 (l) A pharmacy benefits manager or covered entity shall make available on its secure web
80site information about the appeals process, including, but not limited to, a telephone number or
81process that a pharmacy may use to submit cost appeals. The medical products and devices
82subject to the requirements of this part are limited to the medical products and devices included
83as a pharmacy benefit under the pharmacy benefits contract.
84 (m) A pharmacy shall not disclose to any third party the cost lists and any related
85information it receives from a pharmacy benefits manager or covered entity; provided, a
86pharmacy may share such lists and related information with a pharmacy services administrative
87organization or similar entity with which the pharmacy has a contract to provide administrative
88services for that pharmacy. If a pharmacy shares this information with a pharmacy services
89administrative organization or similar entity, that organization or entity shall not disclose the
90information to any third party.
91 (n) A pharmacy benefits manager or covered entity is prohibited from applying
92retroactive discounts including but not limited to Generic Effective Rate and Brand Effective
93Rate. All discounts must be applied when the claim is paid.
94 (o) A pharmacy benefits manager or covered entity shall include payment for covered
95medications in its explanation of benefits
96 SECTION 2. Chapter 118E Section 9B is hereby amended by adding:- 6 of 7
97 All MassHealth Managed Care Organizations and Accountable Care Organizations are
98required to reimburse pharmacies at the same rate as described in the MassHealth Pharmacy
99Provider Manual.
100 The Insurance Commissioner shall enforce this Act and shall promulgate regulations to
101enforce the provisions of this act. The commissioner may examine or audit the books and records
102of a pharmacy benefits manager providing claims processing services or other prescription drug
103or device services for a health benefit plan to determine if the pharmacy benefits manager is in
104compliance with this Act. The information or data acquired during an examination is:
105 (i) Considered proprietary and confidential; and
106 (ii) Not subject to the Freedom of Information Act of Massachusetts
107 (o) In any participation contracts between pharmacy benefits managers and pharmacists
108or pharmacies providing prescription drug coverage for health benefit plans, no pharmacy or
109pharmacist may be prohibited, restricted, or penalized in any way from disclosing to any covered
110person any healthcare information that the pharmacy or pharmacist deems appropriate regarding
111the nature of treatment, risks, or alternatives thereto, the availability of alternate therapies,
112consultations, or tests, the decision of utilization reviewers or similar persons to authorize or
113deny services, the process that is used to authorize or deny healthcare services or benefits, or
114information on financial incentives and structures used by the insurer.
115 (p) Further any such contract as stated above shall not prohibit a pharmacist or pharmacy
116from providing an insured individual information on the amount of the insured's cost share for
117such insured's prescription drug and the clinical efficacy of a more affordable alternative drug if
118one is available. Neither a pharmacy nor a pharmacist shall be penalized by a pharmacy benefits 7 of 7
119manager for disclosing such information to an insured or for selling to an insured a more
120affordable alternative if one is available.