Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S749 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	SENATE DOCKET, NO. 2232 FILED ON: 1/20/2023
3	3	SENATE . . . . . . . . . . . . . . No. 749
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Cindy F. Friedman
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to pharmaceutical access, costs and transparency.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :Cindy F. FriedmanFourth MiddlesexRebecca L. RauschNorfolk, Worcester and Middlesex1/24/2023Susannah M. Whipps2nd Franklin1/27/2023Joanne M. ComerfordHampshire, Franklin and Worcester1/27/2023Jack Patrick Lewis7th Middlesex1/30/2023Jason M. LewisFifth Middlesex1/31/2023Patrick M. O'ConnorFirst Plymouth and Norfolk2/8/2023James B. EldridgeMiddlesex and Worcester2/16/2023Julian CyrCape and Islands2/23/2023Patricia D. JehlenSecond Middlesex3/2/2023Paul R. FeeneyBristol and Norfolk3/6/2023 1 of 61
16	16	SENATE DOCKET, NO. 2232 FILED ON: 1/20/2023
17	17	SENATE . . . . . . . . . . . . . . No. 749
18	18	By Ms. Friedman, a petition (accompanied by bill, Senate, No. 749) of Cindy F. Friedman,
19	19	Rebecca L. Rausch, Susannah M. Whipps, Joanne M. Comerford and other members of the
20	20	General Court for legislation relative to pharmaceutical access, costs and transparency. Health
21	21	Care Financing.
22	22	[SIMILAR MATTER FILED IN PREVIOUS SESSION
23	23	SEE SENATE, NO. 771 OF 2021-2022.]
24	24	The Commonwealth of Massachusetts
25	25	_______________
26	26	In the One Hundred and Ninety-Third General Court
27	27	(2023-2024)
28	28	_______________
29	29	An Act relative to pharmaceutical access, costs and transparency.
30	30	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
31	31	of the same, as follows:
32	32	1 SECTION 1. Chapter 6A of the General Laws is hereby amended by adding the
33	33	2following section:-
34	34	3 Section 16DD. (a) The following terms shall have the following meanings, unless the
35	35	4context clearly requires otherwise:
36	36	5 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
37	37	6drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an
38	38	7application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
39	39	8is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
40	40	9Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug 2 of 61
41	41	10application that was approved by the United States Secretary of Health and Human Services
42	42	11under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the 2
43	43	12of 53 date of the enactment of the federal Drug Price Competition and Patent Term Restoration
44	44	13Act of 1984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by
45	45	1442 C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application
46	46	15approved under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand
47	47	16name drug based on available data resources such as Medi-Span.
48	48	17 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
49	49	18abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
50	50	19drug as defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
51	51	20and was not originally marketed under a new drug application; or (iv) identified by the health
52	52	21benefit plan as a generic drug based on available data resources such as Medi-Span.
53	53	22 (b) Notwithstanding any general or special law to the contrary, there shall be a drug
54	54	23access program, administered by the executive office of health and human services, for the
55	55	24purpose of enhancing access to targeted high-value medications used to treat certain chronic
56	56	25conditions. To implement the drug access program, the secretary of health and human services,
57	57	26in consultation with the department of public health, the division of insurance, the health policy
58	58	27commission, and the center for health information and analysis, shall identify one generic drug
59	59	28and one brand name drug used to treat each of the following chronic conditions: (i) diabetes; (ii)
60	60	29asthma; and (iii) heart conditions, including, but not limited to, hypertension and coronary artery
61	61	30disease. In determining the one generic drug and one brand name drug used to treat each chronic
62	62	31condition, the secretary shall consider whether the drug is: 3 of 61
63	63	32 (1) of clear benefit and strongly supported by clinical evidence to be cost-effective;
64	64	33 (2) likely to reduce hospitalizations or emergency department visits, or reduce future
65	65	34exacerbations of illness progression, or improve quality of life;
66	66	35 (3) relatively low cost when compared to the cost of an acute illness or incident prevented
67	67	36or delayed by the use of the service, treatment or drug;
68	68	37 (4) at low risk for overutilization, abuse, addiction, diversion or fraud; and
69	69	38 (5) widely utilized as a treatment for the chronic condition.
70	70	39 (c) The secretary of health and human services shall identify insulin as the drug used to
71	71	40treat diabetes under the drug access program.
72	72	41 (d) Every two years, the secretary of health and human services, in consultation with the
73	73	42health policy commission, the center for health information and analysis and the division of
74	74	43insurance, shall evaluate the impact of the drug access program established in this section on
75	75	44drug treatment adherence, incidence of related acute events, premiums and cost-sharing, overall
76	76	45health, long-term health costs, and any other issues that the secretary may deem relevant. The
77	77	46secretary may collaborate with an independent research organization to conduct such evaluation.
78	78	47The secretary shall file a report of its findings with the clerks of the house of representatives and
79	79	48senate, the chairs of the joint committee on public health, the chairs of the joint committee on
80	80	49health care financing and the chairs of house and senate committees on ways and means.
81	81	50 (e) The secretary, in consultation with the division of insurance, shall promulgate rules
82	82	51and regulations necessary to implement this section. 4 of 61
83	83	52 SECTION 2. Section 1 of chapter 6D of the General Laws, as appearing in the 2020
84	84	53Official Edition, is hereby amended by inserting after the definition of “Alternative payment
85	85	54methodologies or methods” the following 2 definitions:-
86	86	55 “Biosimilar”, a drug that is produced or distributed pursuant to a biologics license
87	87	56application approved under 42 U.S.C. 262(k)(3).
88	88	57 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
89	89	58drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an
90	90	59application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
91	91	60is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
92	92	61Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
93	93	62application that was approved by the United States Secretary of Health and Human Services
94	94	63under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
95	95	64date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
96	96	651984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 42
97	97	66C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
98	98	67under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug
99	99	68based on available data resources such as Medi-Span.
100	100	69 SECTION 3. Said section 1 of said chapter 6D, as so appearing, is hereby further
101	101	70amended by inserting after the definition of “Disproportionate share hospital” the following
102	102	71definition:- 5 of 61
103	103	72 “Early notice”, advanced notification by a pharmaceutical manufacturing company of a:
104	104	73(i) new drug, device or other development coming to market; or (ii) a price increase, as described
105	105	74in subsection (b) of section 15A.
106	106	75 SECTION 4. Said section 1 of said chapter 6D, as so appearing, is hereby further
107	107	76amended by inserting after the definition of “Fiscal year” the following definition:-
108	108	77 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
109	109	78abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
110	110	79drug as defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
111	111	80and was not originally marketed under a new drug application; or (iv) identified by the health
112	112	81benefit plan as a generic drug based on available data resources such as Medi-Span.
113	113	82 SECTION 5. Said section 1 of said chapter 6D, as so appearing, is hereby further
114	114	83amended by striking out, in line 189, the words “not include excludes ERISA plans” and
115	115	84inserting in place thereof the following words:- include self-insured plans to the extent allowed
116	116	85under the federal Employee Retirement Income Security Act of 1974.
117	117	86 SECTION 6. Said section 1 of said chapter 6D, as so appearing, is hereby further
118	118	87amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
119	119	88 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
120	120	89preparation, propagation, compounding, conversion or processing of prescription drugs, directly
121	121	90or indirectly, by extraction from substances of natural origin, independently by means of
122	122	91chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
123	123	92repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
124	124	93“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed 6 of 61
125	125	94under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
126	126	95chapter 112.
127	127	96 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
128	128	97directly or through a subsidiary provides pharmacy benefit management services for prescription
129	129	98drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
130	130	99insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
131	131	100management services shall include, but not be limited to: (i) the processing and payment of
132	132	101claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
133	133	102of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
134	134	103grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
135	135	104drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
136	136	105clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
137	137	106covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
138	138	107health benefit plan that does not contract with a pharmacy benefit manager and manages its own
139	139	108prescription drug benefits unless specifically exempted by the commission.
140	140	109 SECTION 7. Said section 1 of said chapter 6D, as so appearing, is hereby further
141	141	110amended by inserting after the definition of “Physician” the following definition:-
142	142	111 “Pipeline drug”, a prescription drug product containing a new molecular entity for which
143	143	112the sponsor has submitted a new drug application or biologics license application and received an
144	144	113action date from the United States Food and Drug Administration.
145	145	114 SECTION 8. Said section 1 of said chapter 6D, as so appearing, is hereby further
146	146	115amended by adding the following definition:- 7 of 61
147	147	116 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
148	148	1171395w-3a(c)(6)(B).
149	149	118 SECTION 9. Said chapter 6D is hereby further amended by striking out section 2A, as so
150	150	119appearing, and inserting in place thereof the following section:-
151	151	120 Section 2A. The commission shall keep confidential all nonpublic clinical, financial,
152	152	121strategic or operational documents or information provided or reported to the commission in
153	153	122connection with any care delivery, quality improvement process, performance improvement
154	154	123plan, early notification or access and affordability improvement plan activities authorized under
155	155	124sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under section 2GGGG of chapter 29 and
156	156	125shall not disclose the information or documents to any person without the consent of the payer,
157	157	126provider or pharmaceutical manufacturing company providing or reporting the information or
158	158	127documents under said sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under said section
159	159	1282GGGG of said chapter 29, except in summary form in evaluative reports of such activities or
160	160	129when the commission believes that such disclosure should be made in the public interest after
161	161	130taking into account any privacy, trade secret or anticompetitive considerations. The confidential
162	162	131information and documents shall not be public records and shall be exempt from disclosure
163	163	132under clause Twenty-sixth of section 7 of chapter 4 or under chapter 66.
164	164	133 SECTION 10. Section 4 of said chapter 6D, as so appearing, is hereby amended by
165	165	134striking out, in lines 7 and 8, the word “manufacturers” and inserting in place thereof the
166	166	135following words:- manufacturing companies, pharmacy benefit managers,. 8 of 61
167	167	136 SECTION 11. Section 6 of said chapter 6D, as so appearing, is hereby amended by
168	168	137inserting after the word “center”, in line 1, the following words:- , pharmaceutical and
169	169	138biopharmaceutical manufacturing company, pharmacy benefit manager.
170	170	139 SECTION 12. Said section 6 of said chapter 6D, as so appearing, is hereby further
171	171	140amended by striking out, in lines 5 and 36, the figure “33” and inserting in place thereof, in each
172	172	141instance, the following figure:- 25.
173	173	142 SECTION 13. Said section 6 of said chapter 6D, as so appearing, is hereby further
174	174	143amended by adding the following paragraph:-
175	175	144 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
176	176	145companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
177	177	146appropriated by the general court for the expenses of the commission minus amounts collected
178	178	147from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
179	179	148dissemination of reports and information; and (iii) federal matching revenues received for these
180	180	149expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical and
181	181	150biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
182	182	151and distribution determined by the commission, pay to the commonwealth an amount of the
183	183	152estimated expenses of the commission attributable to the commission’s activities under sections
184	184	1538, 9, 15A, 20 and 21. A pharmacy benefit manager that is a surcharge payor subject to the
185	185	154preceding paragraph and manages its own prescription drug benefits shall not be subject to
186	186	155additional assessment under this paragraph 9 of 61
187	187	156 SECTION 14. Section 8 of said chapter 6D, as so appearing, is hereby amended by
188	188	157inserting after the word “organization”, in lines 6 and 7, the following words:- , pharmacy benefit
189	189	158manager, pharmaceutical manufacturing company.
190	190	159 SECTION 15. Said section 8 of said chapter 6D, as so appearing, is hereby further
191	191	160amended by inserting after the word “organizations”, in line 14, the following words:- ,
192	192	161pharmacy benefit managers, pharmaceutical manufacturing companies.
193	193	162 SECTION 16. Said section 8 of said chapter 6D, as so appearing, is hereby further
194	194	163amended by striking out, in line 32, the words “and (xi)” and inserting in place thereof the
195	195	164following words:- (xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least
196	196	1651 representative of the pharmacy benefit management industry; and (xiii).
197	197	166 SECTION 17. Said section 8 of said chapter 6D, as so appearing, is hereby further
198	198	167amended by striking out, in line 48, the first time it appears, the word “and”.
199	199	168 SECTION 18. Said section 8 of said chapter 6D, as so appearing, is hereby further
200	200	169amended by inserting after the word “commission”, in line 59, the first time it appears, the
201	201	170following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
202	202	171manufacturing companies, testimony concerning factors underlying prescription drug costs and
203	203	172price increases including, but not limited to, the initial prices of drugs coming to market and
204	204	173subsequent price increases, changes in industry profit levels, marketing expenses, reverse
205	205	174payment patent settlements, the impact of manufacturer rebates, discounts and other price
206	206	175concessions on net pricing, the availability of alternative drugs or treatments and any other
207	207	176matters as determined by the commission. 10 of 61
208	208	177 SECTION 19. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is
209	209	178hereby amended by striking out the second sentence and inserting in place thereof the following
210	210	1792 sentences:-
211	211	180 The report shall be based on the commission’s analysis of information provided at the
212	212	181hearings by witnesses, providers, provider organizations, payers, pharmaceutical manufacturing
213	213	182companies and pharmacy benefit managers, registration data collected under section 11, data
214	214	183collected or analyzed by the center under sections 8, 9, 10 and 10A of chapter 12C and any other
215	215	184available information that the commission considers necessary to fulfill its duties under this
216	216	185section as defined in regulations promulgated by the commission. To the extent practicable, the
217	217	186report shall not contain any data that is likely to compromise the financial, competitive or
218	218	187proprietary nature of the information.
219	219	188 SECTION 20. Section 9 of said chapter 6D, as so appearing, is hereby amended by
220	220	189inserting after the word “organization”, in line 72, the following words:- , pharmacy benefit
221	221	190manager, pharmaceutical manufacturing company.
222	222	191 SECTION 21. Said chapter 6D is hereby further amended by inserting after section 15
223	223	192the following section:-
224	224	193 Section 15A. (a) A pharmaceutical manufacturing company shall provide early notice to
225	225	194the commission in a manner described in this section for a: (i) pipeline drug; (ii) generic drug; or
226	226	195(iii) biosimilar drug. The commission shall provide non-confidential information received under
227	227	196this section to the office of Medicaid, the division of insurance and the group insurance
228	228	197commission. 11 of 61
229	229	198 Early notice under this subsection shall be submitted to the commission in writing not
230	230	199later than 30 days after receipt of the United States Food and Drug Administration approval date.
231	231	200 For each pipeline drug, early notice shall include a brief description of the: (i) primary
232	232	201disease, health condition or therapeutic area being studied and the indication; (ii) route of
233	233	202administration being studied; (iii) clinical trial comparators; and (iv) estimated date of market
234	234	203entry. To the extent possible, information shall be collected using data fields consistent with
235	235	204those used by the federal National Institutes of Health for clinical trials.
236	236	205 For each pipeline drug, early notice shall include whether the drug has been designated
237	237	206by the United States Food and Drug Administration: (i) as an orphan drug; (ii) for fast track; (iii)
238	238	207as a breakthrough therapy; (iv) for accelerated approval; or (v) for priority review for a new
239	239	208molecular entity; provided, however, that notwithstanding clause (v), submissions for drugs in
240	240	209development that are designated as new molecular entities by the United States Food and Drug
241	241	210Administration shall be provided as soon as practical upon receipt of the relevant designations.
242	242	211For each generic drug, early notice shall include a copy of the drug label approved by the United
243	243	212States Food and Drug Administration.
244	244	213 (b) A pharmaceutical manufacturing company shall provide early notice to the
245	245	214commission if it plans to increase the wholesale acquisition cost of a: (i) brand-name drug by
246	246	215more than 15 per cent per wholesale acquisition cost unit during any 12-month period; or (ii)
247	247	216generic drug with a significant price increase as determined by the commission during any 12-
248	248	217month period. The commission shall provide non-confidential information received under this
249	249	218section to the office of Medicaid, the division of insurance and the group insurance commission. 12 of 61
250	250	219 Early notice under this subsection shall be submitted to the commission in writing not
251	251	220less than 60 days before the planned effective date of the increase.
252	252	221 A pharmaceutical manufacturing company required to notify the commission of a price
253	253	222increase under this subsection shall, not less than 30 days before the planned effective date of the
254	254	223increase, report to the commission any information regarding the price increase that is relevant to
255	255	224the commission including, but not limited to: (i) drug identification information; (ii) drug sales
256	256	225volume information; (iii) wholesale price and related information for the drug; (iv) net price and
257	257	226related information for the drug; (v) drug acquisition information, if applicable; (vi) revenue
258	258	227from the sale of the drug; and (vii) manufacturer costs.
259	259	228 (c) The commission shall conduct an annual study of pharmaceutical manufacturing
260	260	229companies subject to the requirements in subsections (a) and (b). The commission may contract
261	261	230with a third-party entity to implement this section.
262	262	231 (d) Notwithstanding any general or special law to the contrary, information provided
263	263	232under this section shall be protected as confidential and shall not be a public record under clause
264	264	233Twenty-sixth of section 7 of chapter 4 or under chapter 66.
265	265	234 (e) If a pharmaceutical manufacturing company fails to timely comply with the
266	266	235requirements under subsection (a) or subsection (b), or otherwise knowingly obstructs the
267	267	236commission’s ability to receive early notice under this section, including, but not limited to,
268	268	237providing incomplete, false or misleading information, the commission may impose appropriate
269	269	238sanctions against the manufacturer, including reasonable monetary penalties not to exceed
270	270	239$500,000, in each instance. The commission shall seek to promote compliance with this section
271	271	240and shall only impose a civil penalty on the manufacturer as a last resort. Amounts collected 13 of 61
272	272	241under this section shall be deposited into the Prescription Drug Cost Assistance Trust Fund
273	273	242established in section 2RRRRR of chapter 29.
274	274	243 SECTION 22. Said chapter 6D is hereby further amended by adding the following 2
275	275	244sections:-
276	276	245 Section 20. (a) As used in this section, the following words shall have the following
277	277	246meanings unless the context clearly requires otherwise:
278	278	247 “Eligible drug”, (i) a brand name drug or biologic, not including a biosimilar, that has a
279	279	248launch wholesale acquisition cost of $50,000 or more for a 1-year supply or full course of
280	280	249treatment; (ii) a biosimilar drug that has a launch wholesale acquisition cost that is not at least 15
281	281	250per cent lower than the referenced brand biologic at the time the biosimilar is launched; (iii) a
282	282	251public health essential drug, as defined in subsection (f) of section 13 of chapter 17, with a
283	283	252significant price increase over a defined period of time as determined by the commission by
284	284	253regulation or with a wholesale acquisition cost of $25,000 or more for a 1-year supply or full
285	285	254course of treatment; or (iv) other prescription drug products that may have a direct and
286	286	255significant impact and create affordability challenges for the state’s health care system and
287	287	256patients, as determined by the commission; provided, however, that the commission shall
288	288	257promulgate regulations to establish the type of prescription drug products classified under clause
289	289	258(iv) prior to classification of any such prescription drug product under said clause (iv).
290	290	259 “Manufacturer”, a pharmaceutical manufacturer of an eligible drug.
291	291	260 “Public health essential drug”, shall have the same meaning as defined in subsection (f)
292	292	261of section 13 of chapter 17. 14 of 61
293	293	262 (b) The commission shall review the impact of eligible drug costs on patient access;
294	294	263provided, however, that the commission may prioritize the review of eligible drugs based on
295	295	264potential impact to consumers.
296	296	265 In order to conduct a review of eligible drugs, the commission may require a
297	297	266manufacturer to disclose to the commission within a reasonable time period information relating
298	298	267to the manufacturer’s pricing of an eligible drug. The disclosed information shall be on a
299	299	268standard reporting form developed by the commission with the input of the manufacturers and
300	300	269shall include, but not be limited to:
301	301	270 (i) a schedule of the drug’s wholesale acquisition cost increases over the previous 5
302	302	271calendar years;
303	303	272 (ii) the manufacturer’s aggregate, company-level research and development and other
304	304	273relevant capital expenditures, including facility construction, for the most recent year for which
305	305	274final audited data are available;
306	306	275 (iii) a narrative description, absent proprietary information and written in plain language,
307	307	276of factors that contributed to reported changes in wholesale acquisition cost during the previous 5
308	308	277calendar years; and
309	309	278 (iv) any other information that the manufacturer wishes to provide to the commission or
310	310	279that the commission requests.
311	311	280 (c) Based on the records furnished under subsection (b) and available information from
312	312	281the center for health information and analysis or an outside third party, the commission shall 15 of 61
313	313	282identify a proposed value for the eligible drug. The commission may request additional relevant
314	314	283information that it deems necessary.
315	315	284 Any information, analyses or reports regarding an eligible drug review shall be provided
316	316	285to the manufacturer. The commission shall consider any clarifications or data provided by the
317	317	286manufacturer with respect to the eligible drug. The commission shall not base its determination
318	318	287on the proposed value of the eligible drug solely on the analysis or research of an outside third
319	319	288party and shall not employ a measure or metric that assigns a reduced value to the life extension
320	320	289provided by a treatment based on a pre-existing disability or chronic health condition of the
321	321	290individuals whom the treatment would benefit. If the commission relies upon a third party to
322	322	291provide cost-effectiveness analysis or research related to the proposed value of the eligible drug,
323	323	292such analysis or research shall also include, but not be limited to: (i) a description of the
324	324	293methodologies and models used in its analysis; (ii) any assumptions and potential limitations of
325	325	294research findings in the context of the results; and (iii) outcomes for affected subpopulations that
326	326	295utilize the drug, including, but not limited to, potential impacts on individuals of marginalized
327	327	296racial or ethnic groups, and on individuals with specific disabilities or health conditions who
328	328	297regularly utilize the eligible drug.
329	329	298 (d) If, after review of an eligible drug and after receiving information from the
330	330	299manufacturer under subsection (b) or subsection (e), the commission determines that the
331	331	300manufacturer’s pricing of the eligible drug does not substantially exceed the proposed value of
332	332	301the drug, the commission shall notify the manufacturer, in writing, of its determination and shall
333	333	302evaluate other ways to mitigate the eligible drug’s cost in order to improve patient access to the
334	334	303eligible drug. The commission may engage with the manufacturer and other relevant
335	335	304stakeholders, including, but not limited to, patients, patient advocacy organizations, consumer 16 of 61
336	336	305advocacy organizations, providers, provider organizations and payers, to explore options for
337	337	306mitigating the cost of the eligible drug. Upon the conclusion of a stakeholder engagement
338	338	307process under this subsection, the commission shall issue recommendations on ways to reduce
339	339	308the cost of the eligible drug for the purpose of improving patient access to the eligible drug.
340	340	309Recommendations may include, but shall not be limited to: (i) an alternative payment plan or
341	341	310methodology; (ii) a bulk purchasing program; (iii) co-pay, deductible, coinsurance or other cost-
342	342	311sharing restrictions; and (iv) a reinsurance program to subsidize the cost of the eligible drug. The
343	343	312recommendations shall be publicly posted on the commission’s website and provided to the
344	344	313clerks of the house of representatives and senate, the joint committee on health care financing
345	345	314and the house and senate committees on ways and means.
346	346	315 (e) If, after review of an eligible drug, the commission determines that the manufacturer’s
347	347	316pricing of the eligible drug substantially exceeds the proposed value of the drug, the commission
348	348	317shall request that the manufacturer provide further information related to the pricing of the
349	349	318eligible drug and the manufacturer’s reasons for the pricing not later than 30 days after receiving
350	350	319the request.
351	351	320 (f) Not later than 60 days after receiving information from the manufacturer under
352	352	321subsection (b) or subsection (e), the commission shall confidentially issue a determination on
353	353	322whether the manufacturer’s pricing of an eligible drug substantially exceeds the commission’s
354	354	323proposed value of the drug. If the commission determines that the manufacturer’s pricing of an
355	355	324eligible drug substantially exceeds the proposed value of the drug, the commission shall
356	356	325confidentially notify the manufacturer, in writing, of its determination and request the
357	357	326manufacturer to enter into an access and affordability improvement plan under section 21. 17 of 61
358	358	327 (g) Records disclosed by a manufacturer under this section shall: (i) be accompanied by
359	359	328an attestation that all information provided is true and correct; (ii) not be public records under
360	360	329clause Twenty-sixth of section 7 of chapter 4 or under chapter 66; and (iii) remain confidential;
361	361	330provided, however, that the commission may produce reports summarizing any findings;
362	362	331provided further, that any such report shall not be in a form that identifies specific prices charged
363	363	332for or rebate amounts associated with drugs by a manufacturer or in a manner that is likely to
364	364	333compromise the financial, competitive or proprietary nature of the information.
365	365	334 Any request for further information made by the commission under subsection (e) or any
366	366	335determination issued or written notification made by the commission under subsection (f) shall
367	367	336not be public records under said clause Twenty-sixth of said section 7 of said chapter 4 or under
368	368	337said chapter 66.
369	369	338 (h) The commission’s proposed value of an eligible and the commission’s underlying
370	370	339analysis of the eligible drug is not intended to be used to determine whether any individual
371	371	340patient meets prior authorization or utilization management criteria for the eligible drug. The
372	372	341proposed value and underlying analysis shall not be the sole factor in determining whether a drug
373	373	342is included in a formulary or whether the drug is subject to step therapy.
374	374	343 (i) If the manufacturer fails to timely comply with the commission’s request for records
375	375	344under subsection (b) or subsection (e), or otherwise knowingly obstructs the commission’s
376	376	345ability to issue its determination under subsection (f), including, but not limited to, by providing
377	377	346incomplete, false or misleading information, the commission may impose appropriate sanctions
378	378	347against the manufacturer, including reasonable monetary penalties not to exceed $500,000, in
379	379	348each instance. The commission shall seek to promote compliance with this section and shall only 18 of 61
380	380	349impose a civil penalty on the manufacturer as a last resort. Penalties collected under this
381	381	350subsection shall be deposited into the Prescription Drug Cost Assistance Trust Fund established
382	382	351in section 2RRRRR of chapter 29.
383	383	352 (j) The commission shall adopt any written policies, procedures or regulations that the
384	384	353commission determines are necessary to implement this section.
385	385	354 Section 21. (a) The commission shall establish procedures to assist manufacturers in
386	386	355filing and implementing an access and affordability improvement plan.
387	387	356 Upon providing written notice provided under subsection (f) of section 20, the
388	388	357commission shall request that a manufacturer whose pricing of an eligible drug substantially
389	389	358exceeds the commission’s proposed value of the drug file an access and affordability
390	390	359improvement plan with the commission. Not later than 45 days after receipt of a notice under
391	391	360said subsection (f) of said section 20, a manufacturer shall: (i) file an access and affordability
392	392	361improvement plan; or (ii) provide written notice declining the commission’s request.
393	393	362 (b) An access and affordability improvement plan shall: (i) be generated by the
394	394	363manufacturer; (ii) identify the reasons for the manufacturer’s drug price; and (iii) include, but not
395	395	364be limited to, specific strategies, adjustments and action steps the manufacturer proposes to
396	396	365implement to address the cost of the eligible drug in order to improve the accessibility and
397	397	366affordability of the eligible drug for patients and the state’s health system. The proposed access
398	398	367and affordability improvement plan shall include specific identifiable and measurable expected
399	399	368outcomes and a timetable for implementation. The timetable for an access and affordability
400	400	369improvement plan shall not exceed 18 months. 19 of 61
401	401	370 (c) The commission shall approve any access and affordability improvement plan that it
402	402	371determines: (i) is reasonably likely to address the cost of an eligible drug in order to substantially
403	403	372improve the accessibility and affordability of the eligible drug for patients and the state’s health
404	404	373system; and (ii) has a reasonable expectation for successful implementation.
405	405	374 (d) If the commission determines that the proposed access and affordability improvement
406	406	375plan is unacceptable or incomplete, the commission may provide consultation on the criteria that
407	407	376have not been met and may allow an additional time period of not more than 30 calendar days for
408	408	377resubmission; provided, however, that all aspects of the access plan shall be proposed by the
409	409	378manufacturer and the commission shall not require specific elements for approval.
410	410	379 (e) Upon approval of the proposed access and affordability improvement plan, the
411	411	380commission shall notify the manufacturer to begin immediate implementation of the access and
412	412	381affordability improvement plan. Public notice shall be provided by the commission on its
413	413	382website, identifying that the manufacturer is implementing an access and affordability
414	414	383improvement plan; provided, however, that upon the successful completion of the access and
415	415	384affordability improvement plan, the identity of the manufacturer shall be removed from the
416	416	385commission's website. All manufacturers implementing an approved access improvement plan
417	417	386shall be subject to additional reporting requirements and compliance monitoring as determined
418	418	387by the commission. The commission shall provide assistance to the manufacturer in the
419	419	388successful implementation of the access and affordability improvement plan.
420	420	389 (f) All manufacturers shall work in good faith to implement the access and affordability
421	421	390improvement plan. At any point during the implementation of the access and affordability 20 of 61
422	422	391improvement plan, the manufacturer may file amendments to the access improvement plan,
423	423	392subject to approval of the commission.
424	424	393 (g) At the conclusion of the timetable established in the access and affordability
425	425	394improvement plan, the manufacturer shall report to the commission regarding the outcome of the
426	426	395access and affordability improvement plan. If the commission determines that the access and
427	427	396affordability improvement plan was unsuccessful, the commission shall: (i) extend the
428	428	397implementation timetable of the existing access and affordability improvement plan; (ii) approve
429	429	398amendments to the access and affordability improvement plan as proposed by the manufacturer;
430	430	399(iii) require the manufacturer to submit a new access and affordability improvement plan; or (iv)
431	431	400waive or delay the requirement to file any additional access and affordability improvement plans.
432	432	401 (h) The commission shall submit a recommendation for proposed legislation to the joint
433	433	402committee on health care financing if the commission determines that further legislative
434	434	403authority is needed to assist manufacturers with the implementation of access and affordability
435	435	404improvement plans or to otherwise ensure compliance with this section.
436	436	405 (i) An access and affordability improvement plan under this section shall remain
437	437	406confidential in accordance with section 2A.
438	438	407 (j) The commission may assess a civil penalty to a manufacturer of not more than
439	439	408$500,000, in each instance, if the commission determines that the manufacturer: (i) willfully
440	440	409neglected to file an access and affordability improvement plan with the commission under
441	441	410subsection (a); (ii) failed to file an acceptable access and affordability improvement plan in good
442	442	411faith with the commission; (iii) failed to implement the access and affordability improvement
443	443	412plan in good faith; or (iv) knowingly failed to provide information required by this section to the 21 of 61
444	444	413commission or knowingly falsified the information. The commission shall seek to promote
445	445	414compliance with this section and shall only impose a civil penalty as a last resort. Penalties
446	446	415collected under this subsection shall be deposited into the Prescription Drug Cost Assistance
447	447	416Trust Fund established in section 2RRRRR of chapter 29.
448	448	417 (k) If a manufacturer declines to enter into an access and affordability improvement plan
449	449	418under this section, the commission may publicly post the proposed value of the eligible drug,
450	450	419hold a public hearing on the proposed value of the eligible drug and solicit public comment. The
451	451	420manufacturer shall appear and testify at the public hearing held on the eligible drug’s proposed
452	452	421value. Upon the conclusion of a public hearing under this subsection, the commission shall issue
453	453	422recommendations on ways to reduce the cost of an eligible drug for the purpose of improving
454	454	423patient access to the eligible drug. The recommendations shall be publicly posted on the
455	455	424commission’s website and provided to the clerks of the house of representatives and senate, the
456	456	425joint committee on health care financing and the house and senate committees on ways and
457	457	426means.
458	458	427 If a manufacturer is deemed to not be acting in good faith to develop an acceptable or
459	459	428complete access and affordability improvement plan, the commission may publicly post the
460	460	429proposed value of the eligible drug, hold a public hearing on the proposed value of the eligible
461	461	430drug and solicit public comment. The manufacturer shall appear and testify at any hearing held
462	462	431on the eligible drug’s proposed value. Upon the conclusion of a public hearing under this
463	463	432subsection, the commission shall issue recommendations on ways to reduce the cost of an
464	464	433eligible drug for the purpose of improving patient access to the eligible drug. The
465	465	434recommendations shall be publicly posted on the commission’s website and provided to the 22 of 61
466	466	435clerks of the house of representatives and senate, the joint committee on health care financing
467	467	436and the house and senate committees on ways and means.
468	468	437 Before making a determination that the manufacturer is not acting in good faith, the
469	469	438commission shall send a written notice to the manufacturer that the commission shall deem the
470	470	439manufacturer to not be acting in good faith if the manufacturer does not submit an acceptable
471	471	440access and affordability improvement plan within 30 days of receipt of notice; provided,
472	472	441however, that the commission shall not send a notice under this paragraph within 120 calendar
473	473	442days from the date that the commission issued its request that the manufacturer enter into the
474	474	443access and affordability improvement plan.
475	475	444 (l) The commission shall promulgate regulations necessary to implement this section.
476	476	445 SECTION 23. Section 1 of chapter 12C of the General Laws, as appearing in the 2020
477	477	446Official Edition, is hereby amended by inserting after the definition of “Ambulatory surgical
478	478	447center services” the following 3 definitions:-
479	479	448 “Average manufacturer price”, the average price paid to a manufacturer for a drug in the
480	480	449commonwealth by a: (i) wholesaler for drugs distributed to pharmacies; and (ii) pharmacy that
481	481	450purchases drugs directly from the manufacturer.
482	482	451 “Biosimilar”, a drug that is produced or distributed pursuant to a biologics license
483	483	452application approved under 42 U.S.C. 262(k)(3).
484	484	453 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
485	485	454drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an
486	486	455application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that 23 of 61
487	487	456is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
488	488	457Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
489	489	458application that was approved by the United States Secretary of Health and Human Services
490	490	459under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
491	491	460date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
492	492	4611984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic as defined by 42 C.F.R.
493	493	462447.502; (ii) produced or distributed pursuant to a biologics license application approved under
494	494	46342 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a brand name drug based
495	495	464on available data resources such as Medi-Span.
496	496	465 SECTION 24. Said section 1 of said chapter 12C, as so appearing, is hereby further
497	497	466amended by inserting after the definition of “General health supplies, care or rehabilitative
498	498	467services and accommodations” the following definition:-
499	499	468 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
500	500	469abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic as
501	501	470defined by 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962 that
502	502	471was not originally marketed under a new drug application; or (iv) identified by the health benefit
503	503	472plan as a generic drug based on available data resources such as Medi-Span.
504	504	473 SECTION 25. Said section 1 of said chapter 12C, as so appearing, is hereby further
505	505	474amended by inserting after the definition of “Patient-centered medical home” the following 2
506	506	475definitions:-
507	507	476 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
508	508	477preparation, propagation, compounding, conversion or processing of prescription drugs, directly 24 of 61
509	509	478or indirectly, by extraction from substances of natural origin, independently by means of
510	510	479chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
511	511	480repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
512	512	481“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
513	513	482under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
514	514	483chapter 112.
515	515	484 “Pharmacy benefit manager”, a person, business or other entity, however organized, that,
516	516	485directly or through a subsidiary, provides pharmacy benefit management services for prescription
517	517	486drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
518	518	487insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
519	519	488management services shall include, but not be limited to: (i) the processing and payment of
520	520	489claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
521	521	490of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
522	522	491grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
523	523	492drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
524	524	493clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
525	525	494covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
526	526	495health benefit plan that does not contract with a pharmacy benefit manager and manages its own
527	527	496prescription drug benefits unless specifically exempted by the commission.
528	528	497 SECTION 26. Said section 1 of said chapter 12C, as so appearing, is hereby further
529	529	498amended by adding the following definition:- 25 of 61
530	530	499 “Wholesale acquisition cost”, shall have the same meaning as defined in 42 U.S.C.
531	531	5001395w-3a(c)(6)(B).
532	532	501 SECTION 27. Section 3 of said chapter 12C, as so appearing, is hereby amended by
533	533	502inserting after the word “organizations”, in lines 13 and 14, the following words:- ,
534	534	503pharmaceutical manufacturing companies, pharmacy benefit managers.
535	535	504 SECTION 28. Said section 3 of said chapter 12C, as so appearing, is hereby further
536	536	505amended by striking out, in line 24, the words “and payer” and inserting in place thereof the
537	537	506following words:- , payer, pharmaceutical manufacturing company and pharmacy benefit
538	538	507manager.
539	539	508 SECTION 29. Section 5 of said chapter 12C, as so appearing, is hereby amended by
540	540	509striking out, in lines 11 and 12, the words “and public health care payers” and inserting in place
541	541	510thereof the following words:- , public health care payers, pharmaceutical manufacturing
542	542	511companies and pharmacy benefit managers.
543	543	512 SECTION 30. Said section 5 of said chapter 12C, as so appearing, is hereby further
544	544	513amended by striking out, in line 15, the words “and affected payers” and inserting in place
545	545	514thereof the following words:- affected payers, affected pharmaceutical manufacturing companies
546	546	515and affected pharmacy benefit managers.
547	547	516 SECTION 31. The first paragraph of section 7 of said chapter 12C, as so appearing, is
548	548	517hereby amended by adding the following sentence:- Each pharmaceutical and biopharmaceutical
549	549	518manufacturing company and pharmacy benefit manager shall pay to the commonwealth an
550	550	519amount for the estimated expenses of the center and for the other purposes described in this
551	551	520chapter. 26 of 61
552	552	521 SECTION 32. Said section 7 of said chapter 12C, as so appearing, is hereby further
553	553	522amended by striking out, in lines 8 and 42, the figure “33” and inserting in place thereof, in each
554	554	523instance, the following figure:- 25.
555	555	524 SECTION 33. Said section 7 of said chapter 12C, as so appearing, is hereby further
556	556	525amended by adding the following paragraph:-
557	557	526 The assessed amount for pharmaceutical and biopharmaceutical manufacturing
558	558	527companies and pharmacy benefit managers shall be not less than 25 per cent of the amount
559	559	528appropriated by the general court for the expenses of the center minus amounts collected from:
560	560	529(i) filing fees; (ii) fees and charges generated by the commission's publication or dissemination
561	561	530of reports and information; and (iii) federal matching revenues received for these expenses or
562	562	531received retroactively for expenses of predecessor agencies. Pharmaceutical and
563	563	532biopharmaceutical manufacturing companies and pharmacy benefit managers shall, in a manner
564	564	533and distribution determined by the center, pay to the commonwealth an amount of the estimated
565	565	534expenses of the center attributable to the center’s activities under sections 3, 10A, 12 and 16. The
566	566	535assessed amount shall be based on business conducted in the commonwealth by the
567	567	536pharmaceutical and biopharmaceutical manufacturing company and pharmacy benefit manager.
568	568	537A pharmacy benefit manager that is also a surcharge payor subject to the preceding paragraph
569	569	538and manages its own prescription drug benefits shall not be subject to additional assessment
570	570	539under this paragraph.
571	571	540 SECTION 34. Said chapter 12C is hereby further amended by inserting after section 10
572	572	541the following section:- 27 of 61
573	573	542 Section 10A. (a) The center shall promulgate the regulations necessary to ensure the
574	574	543uniform reporting of information from pharmaceutical manufacturing companies to enable the
575	575	544center to analyze: (i) year-over-year changes in wholesale acquisition cost and average
576	576	545manufacturer price for prescription drug products; (ii) year-over-year trends in net expenditures;
577	577	546(iii) net expenditures on subsets of biosimilar, brand name and generic drugs identified by the
578	578	547center; (iv) trends in estimated aggregate drug rebates, discounts or other remuneration paid or
579	579	548provided by a pharmaceutical manufacturing company to a pharmacy benefit manager,
580	580	549wholesaler, distributor, health carrier client, health plan sponsor or pharmacy in connection with
581	581	550utilization of the pharmaceutical drug products offered by the pharmaceutical manufacturing
582	582	551company; (v) discounts provided by a pharmaceutical manufacturing company to a consumer in
583	583	552connection with utilization of the pharmaceutical drug products offered by the pharmaceutical
584	584	553manufacturing company, including any discount, rebate, product voucher, coupon or other
585	585	554reduction in a consumer’s out-of-pocket expenses including co-payments and deductibles under
586	586	555section 3 of chapter 175H; (vi) research and development costs as a percentage of revenue; (vii)
587	587	556annual marketing and advertising costs, identifying costs for direct-to-consumer advertising;
588	588	557(viii) annual profits over the most recent 5-year period; (ix) disparities between prices charged to
589	589	558purchasers in the commonwealth and purchasers outside of the United States; and (x) any other
590	590	559information deemed necessary by the center.
591	591	560 The center shall require the submission of available data and other information from
592	592	561pharmaceutical manufacturing companies including, but not limited to: (i) wholesale acquisition
593	593	562costs and average manufacturer prices for prescription drug products as identified by the center;
594	594	563(ii) true net typical prices charged to pharmacy benefits managers by payor type for prescription
595	595	564drug products identified by the center, net of any rebate or other payments from the manufacturer 28 of 61
596	596	565to the pharmacy benefits manager and from the pharmacy benefits manager to the manufacturer;
597	597	566(iii) aggregate, company-level research and development costs to the extent attributable to a
598	598	567specific product and other relevant capital expenditures for the most recent year for which final
599	599	568audited data is available for prescription drug products as identified by the center; (iv) annual
600	600	569marketing and advertising expenditures; and (v) a description, absent proprietary information and
601	601	570written in plain language, of factors that contributed to reported changes in wholesale acquisition
602	602	571costs, net prices and average manufacturer prices for prescription drug products as identified by
603	603	572the center.
604	604	573 (b) The center shall promulgate the regulations necessary to ensure the uniform reporting
605	605	574of information from pharmacy benefit managers to enable the center to analyze: (i) trends in
606	606	575estimated aggregate drug rebates and other drug price reductions, if any, provided by a pharmacy
607	607	576benefit manager to a health carrier client or health plan sponsor or passed through from a
608	608	577pharmacy benefit manager to a health carrier client or health plan sponsor in connection with
609	609	578utilization of drugs in the commonwealth offered through the pharmacy benefit manager and a
610	610	579measure of lives covered by each health carrier client or health plan sponsor in the
611	611	580commonwealth; (ii) pharmacy benefit manager practices with regard to drug rebates and other
612	612	581drug price reductions, if any, provided by a pharmacy benefit manager to a health carrier client
613	613	582or health plan sponsor or to consumers in the commonwealth or passed through from a pharmacy
614	614	583benefit manager to a health carrier client or health plan sponsor or to consumers in the
615	615	584commonwealth; and (iii) any other information deemed necessary by the center.
616	616	585 The center shall require the submission of available data and other information from
617	617	586pharmacy benefit managers including, but not limited to: (i) true net typical prices charged by
618	618	587pharmacy benefits managers for prescription drug products identified by the center, net of any 29 of 61
619	619	588rebate or other payments from the manufacturer to the pharmacy benefits manager and from the
620	620	589pharmacy benefits manager to the manufacturer; (ii) the amount of all rebates that the pharmacy
621	621	590benefit manager received from all pharmaceutical manufacturing companies for all health carrier
622	622	591clients in the aggregate and for each health carrier client or health plan sponsor individually,
623	623	592attributable to patient utilization in the commonwealth; (iii) the administrative fees that the
624	624	593pharmacy benefit manager received from all health carrier clients or health plan sponsors in the
625	625	594aggregate and for each health carrier client or health plans sponsors individually; (iv) the
626	626	595aggregate amount of all retained rebates that the pharmacy benefit manager received from all
627	627	596pharmaceutical manufacturing companies and did not pass through to each pharmacy benefit
628	628	597manager’s health carrier client or health plan sponsor individually; (v) the aggregate amount of
629	629	598rebates a pharmacy benefit manager: (A) retains based on its contractual arrangement with each
630	630	599health plan client or health plan sponsor individually; and (B) passes through to each health care
631	631	600client individually; (vi) the percentage of contracts that a pharmacy benefit manager holds where
632	632	601the pharmacy benefit manager: (A) retains all rebates; (B) passes all rebates through to the client;
633	633	602and (C) shares rebates with the client; and (vii) other information as determined by the center,
634	634	603including, but not limited to, pharmacy benefit manager practices related to spread pricing,
635	635	604administrative fees, claw backs and formulary placement.
636	636	605 (c) Except as specifically provided otherwise by the center or under this chapter, data
637	637	606collected by the center pursuant to this section from pharmaceutical manufacturing companies
638	638	607and pharmacy benefit managers shall not be a public record under clause Twenty-sixth of section
639	639	6087 of chapter 4 or under chapter 66.
640	640	609 SECTION 35. Said chapter 12C is hereby further amended by striking out section 11, as
641	641	610so appearing, and inserting in place thereof the following section:- 30 of 61
642	642	611 Section 11. The center shall ensure the timely reporting of information required under
643	643	612sections 8, 9, 10 and 10A. The center shall notify private health care payers, providers, provider
644	644	613organizations, pharmacy benefit managers, pharmaceutical manufacturing companies and their
645	645	614parent organization and other affiliates of any applicable reporting deadlines. The center shall
646	646	615notify, in writing, a private health care payer, provider, provider organization, pharmacy benefit
647	647	616manager or pharmaceutical manufacturing company, and their parent organization and other
648	648	617affiliates, that has failed to meet a reporting deadline of such failure and that failure to respond
649	649	618within 2 weeks of the receipt of the notice may result in penalties. The center may assess a
650	650	619penalty against a private health care payer, provider, provider organization, pharmacy benefit
651	651	620manager or pharmaceutical manufacturing company, and their parent organization and other
652	652	621affiliates, that fails, without just cause, to provide the requested information, including subsets of
653	653	622the requested information, within 2 weeks following receipt of the written notice required under
654	654	623this section, of not more than $2,000 per week for each week of delay after the 2-week period
655	655	624following receipt of the notice. Amounts collected under this section shall be deposited in the
656	656	625Healthcare Payment Reform Fund established in section 100 of chapter 194 of the acts of 2011.
657	657	626 SECTION 36. Section 12 of said chapter 12C, as so appearing, is hereby amended by
658	658	627striking out, in line 2, the words “and 10” and inserting in place thereof the following words:- ,
659	659	62810 and 10A.
660	660	629 SECTION 37. Subsection (a) of section 16 of said chapter 12C, as so appearing, is hereby
661	661	630amended by striking out the first sentence and inserting in place thereof the following sentence:-
662	662	631The center shall publish an annual report based on the information submitted under: (i) sections
663	663	6328, 9, 10 and 10A concerning health care provider, provider organization, private and public
664	664	633health care payer, pharmaceutical manufacturing company and pharmacy benefit manager costs 31 of 61
665	665	634and cost and price trends; (ii) section 13 of chapter 6D relative to market power reviews; and (iii)
666	666	635section 15 of said chapter 6D relative to quality data.
667	667	636 SECTION 38. Said section 16 of said chapter 12C, as so appearing, is hereby further
668	668	637amended by striking out, in line 18, the words “in the aggregate”.
669	669	638 SECTION 39. Said section 16 of said chapter 12C, as so appearing, is hereby further
670	670	639amended by inserting after the second paragraph the following paragraph:-
671	671	640 As part of its annual report, the center shall report on prescription drug utilization and
672	672	641spending for pharmaceutical drugs provided in an outpatient setting or sold in a retail setting for
673	673	642private and public health care payers, including, but not limited to, information sufficient to
674	674	643show (i) highest utilization drugs; (ii) drugs with the greatest increases in utilization; (iii) drugs
675	675	644that are most impactful on plan spending, net of rebates; and (iv) drugs with the highest year-
676	676	645over-year price increases, net of rebates.
677	677	646 SECTION 40. Section 13 of chapter 17 of the General Laws, as so appearing, is hereby
678	678	647amended by adding the following subsection:-
679	679	648 (f) As used in this subsection, the following words shall have the following meanings
680	680	649unless the context clearly requires otherwise:
681	681	650 “Public health essential drug”, a prescription drug, biologic or biosimilar approved by the
682	682	651United States Food and Drug Administration that: (i) appears on the Model List of Essential
683	683	652Medicines most recently adopted by the World Health Organization; or (ii) is deemed an
684	684	653essential medicine by the commission due to its efficacy in treating a life-threatening health
685	685	654condition or a chronic health condition that substantially impairs an individual’s ability to engage 32 of 61
686	686	655in activities of daily living or because limited access to a certain population would pose a public
687	687	656health challenge.
688	688	657 The commission shall identify and publish a list of public health essential prescription
689	689	658drugs. The list shall be updated not less than annually and be made publicly available on the
690	690	659department’s website; provided, however, that the commission may provide an interim listing of
691	691	660a public health essential drug prior to an annual update. The commission shall notify and forward
692	692	661a copy of the list to the health policy commission established under chapter 6D.
693	693	662 SECTION 41. Chapter 29 of the General Laws is hereby amending by inserting after
694	694	663section 2QQQQQ the following section:-
695	695	664 2RRRRR. (a) There shall be a Prescription Drug Cost Assistance Trust Fund. The
696	696	665secretary of health and human services shall administer the fund and shall make expenditures
697	697	666from the fund, without further appropriation, to provide financial assistance to state residents for
698	698	667the cost of prescription drugs through the prescription drug costs assistance program established
699	699	668under section 244 of chapter 111. For the purpose of this section “prescription drug” shall
700	700	669include the prescription drug and any drug delivery device needed to administer the drug that is
701	701	670not included as part of the underlying drug prescription.
702	702	671 The fund shall consist of: (i) revenue generated from the penalty established under
703	703	672chapter 63E; (ii) revenue from appropriations or other money authorized by the general court and
704	704	673specifically designated to be credited to the fund; and (iii) funds from public or private sources,
705	705	674including, but not limited to, gifts, grants, donations, rebates and settlements received by the
706	706	675commonwealth that are specifically designated to be credited to the fund. An amount equal to the
707	707	676total receipts deposited each quarter from the penalty on drug manufacturers for excessive price 33 of 61
708	708	677increases established under chapter 63E shall be transferred from the General Fund to the
709	709	678Prescription Drug Costs Assistance Trust Fund before the end of each fiscal year. Money
710	710	679remaining in the fund at the close of a fiscal year shall not revert to the General Fund and shall
711	711	680be available for expenditure in the following fiscal year.
712	712	681 (b) Annually, not later than March 1, the secretary shall report on the activities detailing
713	713	682the funds expenditures from the previous calendar year. The report shall include: (i) the number
714	714	683of individuals who received financial assistance from the fund; (ii) the breakdown of fund
715	715	684recipients by race, gender, age range, geographic region and income level; (iii) a list of all
716	716	685prescription drugs that were covered by money from the fund; and (iv) the total cost savings
717	717	686received by all fund recipients and the cost savings broken down by race, gender, age range and
718	718	687income level. The report shall be submitted to the clerks of the senate and house of
719	719	688representatives, senate and house committees on ways and means and the joint committee on
720	720	689health care financing.
721	721	690 (c) The secretary shall promulgate regulations or issue other guidance for the expenditure
722	722	691of the funds under this section.
723	723	692 SECTION 42. Section 17G of chapter 32A of the General Laws, as appearing in the 2020
724	724	693Official Edition, is hereby amended by adding the following sentence:-
725	725	694 Coverage for insulin under this section shall not be subject to any deductible or co-
726	726	695insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
727	727	696or type of insulin needed to fill an insured’s prescription; provided, however, that nothing in this
728	728	697section shall prevent the commission and its contracted health benefit plans from reducing the
729	729	698co-payment for insulin for a 30-day supply below the amount specified in this section. 34 of 61
730	730	699 SECTION 43. Said chapter 32A, as so appearing, is hereby further amended by inserting
731	731	700after section 17R the following section:-
732	732	701 Section 17S. Any carrier offering a policy, contract or certificate of health insurance
733	733	702under this chapter shall provide coverage for the brand name drugs and generic drugs identified
734	734	703by the drug access program established in section 16DD in chapter 6A. Coverage for identified
735	735	704generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
736	736	705and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
737	737	706subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
738	738	707supply.
739	739	708 Notwithstanding this section or any other general or special law to the contrary, coverage
740	740	709for insulin shall be provided under section 17G of this chapter.
741	741	710 SECTION 44. The General Laws are hereby amended by inserting after chapter 63D the
742	742	711following chapter:-
743	743	712 Chapter 63E. PENALTY ON DRUG MANUFACTURERS FOR EXCESSIVE PRICE
744	744	713INCREASES
745	745	714 Section 1. As used in this chapter, the following words shall, unless the context clearly
746	746	715requires otherwise, have the following meanings:
747	747	716 “Commissioner”, the commissioner of revenue.
748	748	717 “Core consumer price index”, the consumer price index for all urban consumers (CPI-U):
749	749	718U.S. city average, for all Items less food and energy, as reported by the U.S. Bureau of Labor
750	750	719Statistics. 35 of 61
751	751	720 “Drug”, any medication, as identified by a National Drug Code, approved for sale by the
752	752	721U.S. Food and Drug Administration.
753	753	722 “Excessive price,” the price of a drug that exceeds the sum of the reference price of that
754	754	723drug plus the three -year average of the core consumer price index, as measured on January 1 of
755	755	724the current calendar year.
756	756	725 “Excessive price increase”, the amount by which the price of a drug exceeds the sum of
757	757	726the reference price of that drug plus the three-year average of the core consumer price index, as
758	758	727measured on January 1 of the current calendar year.
759	759	728 “Person”, any natural person or legal entity.
760	760	729 “Price”, the wholesale acquisition cost of a drug, per unit, as reported to the First Data
761	761	730Bank or other appropriate price compendium designated by the commissioner.
762	762	731 “Reference date”, January 1 of the calendar year prior to the current calendar year.
763	763	732 “Reference price”, the price of a drug on the reference date, or in the case of any drug
764	764	733first commercially marketed in the United States after the reference date, the price of the drug on
765	765	734the date when first marketed in the United States.
766	766	735 “Related party”, an entity is a related party with respect to a person if that entity (i)
767	767	736belongs to the same affiliated group as that person under section 1504 of the Internal Revenue
768	768	737Code provided that the term 50 per cent shall be substituted for the term 80 per cent each time it
769	769	738appears in said section 1504, (ii) has a relationship with that person that is specified in
770	770	739subsections (b) and (c) of section 267 of the Internal Revenue Code, or (iii) is otherwise under
771	771	740common ownership and control with regard to that person; provided, that all references to the 36 of 61
772	772	741Internal Revenue Code in this definition refer to the Internal Revenue Code as amended and in
773	773	742effect for the taxable year.
774	774	743 “Unit”, the lowest dispensable amount of a drug.
775	775	744 Section 2. (a) Any person who manufactures and sells drugs, directly or through another
776	776	745person, for distribution in the commonwealth and who establishes an excessive price for any
777	777	746such drug directly or in cooperation with a related party, shall pay a per unit penalty on all units
778	778	747of the drug ultimately dispensed or administered in the commonwealth. The penalty for each unit
779	779	748shall be 80 per cent of the excessive price increase for each unit.
780	780	749 (b) A person who establishes an excessive price for a drug as described in subsection (a)
781	781	750shall file a return as provided in section 4 declaring all units of excessively priced drug sold for
782	782	751distribution in the commonwealth during each calendar quarter. In the event that a person filing
783	783	752such a return pays a penalty with regard to one or more units of drug that are ultimately
784	784	753dispensed or administered outside of the commonwealth, the person may claim a credit for such
785	785	754penalty amounts on the return for the tax period during which such units are ultimately dispensed
786	786	755or administered.
787	787	756 Section 3. The penalty under section 2 shall apply for any calendar quarter only to a
788	788	757person who maintains a place of business in the commonwealth or whose total sales of all
789	789	758products, directly or through another person, for distribution in the commonwealth were more
790	790	759than $100,000 in the calendar year beginning with the reference date. The penalty shall not apply
791	791	760more than once to any unit of drug sold.
792	792	761 Section 4. Any person subject to the penalty under section 2 shall file a return with the
793	793	762commissioner and shall pay the penalty by the fifteenth day of the third month following the end 37 of 61
794	794	763of each calendar quarter, subject to such reasonable extensions of time for filing as the
795	795	764commissioner may allow. The return shall set out the person’s total sales subject to penalty in the
796	796	765immediately preceding calendar quarter and shall provide such other information as the
797	797	766commissioner may require.
798	798	767 Section 5. The penalty imposed under this chapter shall be in addition to, and not a
799	799	768substitute for or credit against, any other penalty, tax or excise imposed under the General Laws.
800	800	769 Section 6. The commissioner may disclose information contained in returns filed under
801	801	770this chapter to the department of public health, the executive office of health and human services,
802	802	771or other appropriate agency for purposes of verifying that a filer’s sales subject to penalty are
803	803	772properly declared and that all reporting is otherwise correct. Return information so disclosed
804	804	773shall remain confidential and shall not be public record.
805	805	774 Section 7. To the extent that a person subject to penalty under section 2 fails to pay
806	806	775amounts due under this chapter, a related party of such person that directly or indirectly
807	807	776distributes in the commonwealth any drug whose sales are subject to this chapter shall be jointly
808	808	777and severally liable for the penalty due.
809	809	778 Section 8. The commissioner may promulgate regulations for the implementation of this
810	810	779chapter.
811	811	780 SECTION 45. Chapter 111 of the General Laws is hereby amended by adding the
812	812	781following section:-
813	813	782 Section 244. (a) The department shall establish and administer a prescription drug cost
814	814	783assistance program, which shall be funded by the Prescription Drug Cost Assistance Trust Fund 38 of 61
815	815	784established in section 2RRRRR of chapter 29. The program shall provide financial assistance for
816	816	785prescription drugs used to treat: (1) chronic respiratory conditions, including, but not limited to,
817	817	786chronic obstructive pulmonary disease and asthma; (2) chronic heart conditions, including, but
818	818	787not limited to, heart failure, coronary artery disease, hypertension and high blood pressure; (3)
819	819	788diabetes; and (4) any other chronic condition identified by the department that disproportionally
820	820	789impacts people of color or is a risk factor for increased COVID-19 complications; provided, that
821	821	790for paragraphs (1) and (3), “prescription drug” shall include the prescription drug and any drug
822	822	791delivery device needed to administer the drug that is not included as part of the underlying drug
823	823	792prescription. Such financial assistance shall cover the full cost of any co-payment, co-insurance
824	824	793or deductible for the prescription drug for an individual who is eligible for the program.
825	825	794 (b) An individual shall be eligible for the program if the individual: (1) is a resident of
826	826	795Massachusetts; (2) has a current prescription from a health care provider for a drug that is used to
827	827	796treat a chronic condition listed in subsection (a); (3) has a family income equal to or less than
828	828	797500 per cent of the federal poverty level; and (4) is not enrolled in MassHealth.
829	829	798 (c) The department shall create an application process, which shall be available
830	830	799electronically and in hard copy form, to determine whether an individual meets the program
831	831	800eligibility requirements under subsection (b). Upon receipt of such application, the department
832	832	801shall determine an applicant’s eligibility and notify the applicant of the department’s
833	833	802determination within 10 business days. If necessary for its determination, the department may
834	834	803request additional information from the applicant; provided, that the department shall notify the
835	835	804applicant within 5 business days of receipt of the original application as to what specific
836	836	805additional information is being requested. If additional information is being requested, the
837	837	806department shall, within 3 business days of receipt of the additional information, determine 39 of 61
838	838	807whether the applicant is eligible for the program and notify the applicant of the department’s
839	839	808determination.
840	840	809 If the department determines that an applicant is not eligible for the program, the
841	841	810department shall notify the applicant and shall include in the department’s notification the
842	842	811specific reasons why the applicant is not eligible. The applicant may appeal this determination to
843	843	812the department within 30 days of receiving such notification.
844	844	813 If the department determines that an applicant is eligible for the program, the department
845	845	814shall provide the applicant with a prescription drug cost assistance program identification card,
846	846	815which shall clearly indicate that the department has determined that the applicant is eligible for
847	847	816the program; provided, that the program identification card shall include, at a minimum: (1) the
848	848	817applicant’s full name, and (2) the full name of the prescription drug that the applicant is eligible
849	849	818to receive under the program without having to pay a co-payment, co-insurance or deductible.
850	850	819An applicant’s program identification card shall be valid for 12 months and shall be renewable
851	851	820upon a redetermination of program eligibility.
852	852	821 (d) An individual with a valid program identification card issued under subsection (c)
853	853	822may present such card at any pharmacy in the commonwealth and, upon presentation of such
854	854	823card, the pharmacy shall fill the individual’s prescription and provide the prescribed drug to the
855	855	824individual without requiring the individual to pay a co-payment, co-insurance or deductible;
856	856	825provided, that the pharmacy shall be reimbursed for its costs by the Prescription Drug Cost
857	857	826Assistance Trust Fund established in section 2RRRRR of chapter 29, in a manner determined by
858	858	827the department, in an amount equal to what the pharmacy would have received had the individual
859	859	828been required to pay a co-payment, co-insurance or deductible. 40 of 61
860	860	829 (e) The department, in collaboration with the division of insurance and board of
861	861	830registration in pharmacy, shall develop and implement a plan to educate consumers, pharmacists,
862	862	831providers, hospitals and insurers regarding eligibility for and enrollment in the program under
863	863	832this section. The plan shall include, but not be limited to, appropriate staff training, notices
864	864	833provided to consumers at the pharmacy, and a designated website with information for
865	865	834consumers, pharmacists and other health care professionals. The plan shall be developed in
866	866	835consultation with groups representing consumers, pharmacists, providers, hospitals and insurers.
867	867	836 (f) The department shall compile a report detailing information about the program from
868	868	837the previous calendar year. The report shall include: (1) the number of applications received,
869	869	838approved, denied and appealed; (2) the total number of applicants approved, and the number of
870	870	839applicants approved broken down by race, gender, age range and income level; (3) a list of all
871	871	840prescription drugs that qualify for the program under subsection (b) and a list of prescription
872	872	841drugs that applicants actually received financial assistance for; and (4) the total cost savings
873	873	842received by all approved applicants, and the cost savings broken down by race, gender, age range
874	874	843and income level. The report shall be submitted annually, by March 1, to the clerks of the senate
875	875	844and house of representatives, the chairs of the joint committee on ways and means and the chairs
876	876	845of the joint committee on health care financing.
877	877	846 (g) The department shall promulgate regulations or issue other guidance for the
878	878	847implementation and enforcement of this section.
879	879	848 SECTION 46. Section 10C of chapter 118E of the General Laws, as appearing in the
880	880	8492020 Official Edition, is hereby amended by adding the following sentence:- 41 of 61
881	881	850 Coverage for insulin under this section shall not be subject to any deductible or co-
882	882	851insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
883	883	852or type of insulin needed to fill an insured’s prescription; provided, however, that nothing in this
884	884	853section shall prevent the division and its contracted health insurers, health plans, health
885	885	854maintenance organizations, behavioral health management firms and third-party administrators
886	886	855under contract with the division, a Medicaid managed care organization or a primary care
887	887	856clinician plan, from reducing the co-payments for insulin for a 30-day supply below the amount
888	888	857specified in this section.
889	889	858 SECTION 47. Said chapter 118E, as so appearing, is hereby amended by inserting after
890	890	859section 10N the following section:-
891	891	860 Section 10O. Any carrier offering a policy, contract or certificate of health insurance
892	892	861under this chapter shall provide coverage for the brand name drugs and generic drugs identified
893	893	862by the drug access program established in section 16DD in chapter 6A. Coverage for identified
894	894	863generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
895	895	864and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
896	896	865subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
897	897	866supply.
898	898	867 Notwithstanding this section or any other general or special law to the contrary, coverage
899	899	868for insulin shall be provided under section 10C of this chapter.
900	900	869 SECTION 48. Section 47N of chapter 175 of the General Laws, as so appearing, is
901	901	870hereby amended by adding the following paragraph:- 42 of 61
902	902	871 Coverage for insulin under this section shall not be subject to any deductible or co-
903	903	872insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
904	904	873or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing
905	905	874in this section shall prevent an individual policy of accident and sickness insurance issued under
906	906	875section 108 that provides hospital expense and surgical expense insurance or a group blanket or
907	907	876general policy of accident and sickness insurance issued under section 110 that provides hospital
908	908	877expense and surgical expense insurance that is issued or renewed within or without the
909	909	878commonwealth, from reducing the co-payment for insulin for a 30-day supply below the amount
910	910	879specified in this section.
911	911	880 SECTION 49. Said chapter 175, as so appearing, is hereby further amended by inserting
912	912	881after section 47PP the following new section:-
913	913	882 Section 47QQ. Any carrier offering a policy, contract or certificate of health insurance
914	914	883under this chapter shall provide coverage for the brand name drugs and generic drugs identified
915	915	884by the drug access program established in section 16DD in chapter 6A. Coverage for identified
916	916	885generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
917	917	886and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
918	918	887subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
919	919	888supply.
920	920	889 Notwithstanding this section or any other general or special law to the contrary, coverage
921	921	890for insulin shall be provided under section 47N of this chapter.
922	922	891 SECTION 50. Section 226 of said chapter 175, as so appearing, is hereby amended by
923	923	892striking out subsection (a) and inserting in place thereof the following subsection:- 43 of 61
924	924	893 (a) For the purposes of this section, the term “pharmacy benefit manager” shall mean a
925	925	894person, business or other entity, however organized, that directly or through a subsidiary
926	926	895provides pharmacy benefit management services for prescription drugs and devices on behalf of
927	927	896a health benefit plan sponsor, including, but not limited to, a self-insurance plan, labor union or
928	928	897other third-party payer; provided, however, that pharmacy benefit management services shall
929	929	898include, but not be limited to: (i) the processing and payment of claims for prescription drugs;
930	930	899(ii) the performance of drug utilization review; (iii) the processing of drug prior authorization
931	931	900requests; (iv) pharmacy contracting; (v) the adjudication of appeals or grievances related to
932	932	901prescription drug coverage contracts; (vi) formulary administration; (vii) drug benefit design;
933	933	902(viii) mail and specialty drug pharmacy services; (ix) cost containment; (x) clinical, safety and
934	934	903adherence programs for pharmacy services; and (xi) managing the cost of covered prescription
935	935	904drugs; provided further, that “pharmacy benefit manager” shall include a health benefit plan that
936	936	905does not contract with a pharmacy benefit manager and manages its own prescription drug
937	937	906benefits unless specifically exempted.
938	938	907 SECTION 51. Section 8P of chapter 176A of the General Laws, as so appearing, is
939	939	908hereby amended by adding the following paragraph:-
940	940	909 Coverage for insulin under this section shall not be subject to any deductible or co-
941	941	910insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
942	942	911or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing
943	943	912in this section shall prevent a contract between a subscriber and the corporation under an
944	944	913individual or group hospital service plan that is delivered, issued or renewed within or without
945	945	914the commonwealth, from reducing the co-payment for insulin for a 30-day supply below the
946	946	915amount specified in this section. 44 of 61
947	947	916 SECTION 52. Said chapter 176A, as so appearing, is hereby further amended by
948	948	917inserting after section 8QQ the following new section:-
949	949	918 Section 8RR. Any carrier offering a policy, contract or certificate of health insurance
950	950	919under this chapter shall provide coverage for the brand name drugs and generic drugs identified
951	951	920by the drug access program established in section 16DD in chapter 6A. Coverage for identified
952	952	921generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
953	953	922and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
954	954	923subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
955	955	924supply.
956	956	925 Notwithstanding this section or any other general or special law to the contrary, coverage
957	957	926for insulin shall be provided under section 8P of this chapter.
958	958	927 SECTION 53. Section 4S of chapter 176B of the General Laws, as so appearing, is
959	959	928hereby amended by adding the following sentence:-
960	960	929 Coverage for insulin under this section shall not be subject to any deductible or co-
961	961	930insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
962	962	931or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing
963	963	932in this section shall prevents a subscription certificate under an individual or group medical
964	964	933service agreement that is issued or renewed within or without the commonwealth, from reducing
965	965	934the co-payment for insulin for a 30-day supply below the amount specified in this section.
966	966	935 SECTION 54. Said chapter 176B, as so appearing, is hereby further amended by inserting
967	967	936after section 4QQ the following new section:- 45 of 61
968	968	937 Section 4RR. Any carrier offering a policy, contract or certificate of health insurance
969	969	938under this chapter shall provide coverage for the brand name drugs and generic drugs identified
970	970	939by the drug access program established in section 16DD in chapter 6A. Coverage for identified
971	971	940generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
972	972	941and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
973	973	942subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
974	974	943supply.
975	975	944 Notwithstanding this section or any other general or special law to the contrary, coverage
976	976	945for insulin shall be provided under section 4S of this chapter.
977	977	946 SECTION 55. Section 4H of chapter 176G of the General Laws, as so appearing, is
978	978	947hereby amended by adding the following paragraph:-
979	979	948 Coverage for insulin under this section shall not be subject to any deductible or co-
980	980	949insurance and any co-payment shall not exceed $25 per 30-day supply, regardless of the amount
981	981	950or type of insulin needed to fill an insured’s insulin prescription; provided, however, that nothing
982	982	951in this section shall prevent any individual or group health maintenance contract that is issued or
983	983	952renewed within or without the commonwealth, from reducing the co-payment for insulin for a
984	984	95330-day supply below the amount specified in this section.
985	985	954 SECTION 56. Said chapter 176G, as so appearing, is hereby further amended by
986	986	955inserting after section 4GG the following new section:-
987	987	956 Section 4HH. Any carrier offering a policy, contract or certificate of health insurance
988	988	957under this chapter shall provide coverage for the brand name drugs and generic drugs identified
989	989	958by the drug access program established in section 16DD in chapter 6A. Coverage for identified 46 of 61
990	990	959generic drugs shall not be subject to any cost-sharing, including co-payments and co-insurance,
991	991	960and shall not be subject to any deductible. Coverage for identified brand name drugs shall not be
992	992	961subject to any deductible or co-insurance and any co-payment shall not exceed $25 per 30-day
993	993	962supply.
994	994	963 Notwithstanding this section or any other general or special law to the contrary, coverage
995	995	964for insulin shall be provided under section 4H of this chapter.
996	996	965 SECTION 57. Section 2 of chapter 176O of the General Laws, as so appearing, is hereby
997	997	966amended by adding the following subsection:-
998	998	967 (i) Every 3 years, a carrier that contracts with a pharmacy benefit manager shall
999	999	968coordinate an audit of the operations of the pharmacy benefit manager to ensure compliance with
1000	1000	969this chapter and to examine the pricing and rebates applicable to prescription drugs that are
1001	1001	970provided to the carrier’s covered persons.
1002	1002	971 SECTION 58. Said chapter 176O, as so appearing, is hereby further amended by
1003	1003	972inserting after section 22 the following section:-
1004	1004	973 Section 22A. Notwithstanding any other general or special law to the contrary, each
1005	1005	974carrier shall require that a pharmacy benefit manager receive a license from the division under
1006	1006	975chapter 176X as a condition of contracting with that carrier.
1007	1007	976 SECTION 59. Said chapter 176O as so appearing, is hereby further amended by adding
1008	1008	977the following section:-
1009	1009	978 Section 30. (a) For the purposes of this section, the following words shall have the
1010	1010	979following meanings unless the context clearly requires otherwise: 47 of 61
1011	1011	980 “Cost-sharing”, an amount owed by an individual under the terms of the individual’s
1012	1012	981health benefit plan.
1013	1013	982 “Pharmacy retail price”, the amount an individual would pay for a prescription
1014	1014	983medication at a pharmacy if the individual purchased that prescription medication at that
1015	1015	984pharmacy without using a health benefit plan or any other prescription medication benefit or
1016	1016	985discount.
1017	1017	986 (b) At the point of sale, a pharmacy shall charge an individual the: (i) appropriate cost-
1018	1018	987sharing amount; or (ii) pharmacy retail price, whichever is the lowest; provided, however, that a
1019	1019	988carrier, or an entity that manages or administers benefits for a carrier, shall not require an
1020	1020	989individual to make a payment for a prescription drug at the point of sale in an amount that
1021	1021	990exceeds the lesser of the: (a) individual’s cost share; or (b) pharmacy retail price.
1022	1022	991 (c) A contract shall not: (i) prohibit a pharmacist from complying with this section; or (ii)
1023	1023	992impose a penalty on the pharmacist or pharmacy for complying with this section.
1024	1024	993 SECTION 60. The General Laws are hereby amended by inserting after chapter 176W
1025	1025	994the following chapter:-
1026	1026	995 Chapter 176X. LICENSING AND REGULATION OF PHARMACY BENEFIT
1027	1027	996MANAGERS.
1028	1028	997 Section 1. As used in this chapter, the following words shall have the following meanings
1029	1029	998unless the context clearly requires otherwise:
1030	1030	999 “Carrier”, an insurer licensed or otherwise authorized to transact accident or health
1031	1031	1000insurance under chapter 175, a nonprofit hospital service corporation organized under chapter 48 of 61
1032	1032	1001176A, a non-profit medical service corporation organized under chapter 176B, a health
1033	1033	1002maintenance organization organized under chapter 176G and an organization entering into a
1034	1034	1003preferred provider arrangement under chapter 176I; provided, however, that the term “carrier”
1035	1035	1004shall not include an employer purchasing coverage or acting on behalf of its employees or the
1036	1036	1005employees of any subsidiary or affiliated corporation of the employer; provided further, that
1037	1037	1006unless otherwise provided, the term “carrier” shall not include any entity to the extent it offers a
1038	1038	1007policy, certificate or contract that provides coverage solely for dental care services or vision care
1039	1039	1008services.
1040	1040	1009 “Center”, the center for health information and analysis established in chapter 12C.
1041	1041	1010 “Commissioner”, the commissioner of insurance.
1042	1042	1011 “Division”, the division of insurance.
1043	1043	1012 “Health benefit plan”, a contract, certificate or agreement entered into, offered or issued
1044	1044	1013by a carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of health care
1045	1045	1014services; provided, however, that the commissioner may by regulation define other health
1046	1046	1015coverage as a “health benefit plan” for the purposes of this chapter.
1047	1047	1016 “Pharmacy”, a physical or electronic facility under the direction or supervision of a
1048	1048	1017registered pharmacist that is authorized to dispense prescription drugs and has entered into a
1049	1049	1018network contract with a pharmacy benefit manager or a carrier.
1050	1050	1019 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
1051	1051	1020directly or through a subsidiary provides pharmacy benefit management services for prescription
1052	1052	1021drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self- 49 of 61
1053	1053	1022insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
1054	1054	1023management services shall include, but not be limited to: (i) the processing and payment of
1055	1055	1024claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
1056	1056	1025of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
1057	1057	1026grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
1058	1058	1027drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
1059	1059	1028clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
1060	1060	1029covered prescription drugs; provided further, that “pharmacy benefit manager” shall not include
1061	1061	1030a health benefit plan unless otherwise specified by the division.
1062	1062	1031 Section 2. (a) A person, business or other entity shall not establish or operate as a
1063	1063	1032pharmacy benefit manager without obtaining a license from the division pursuant to this section.
1064	1064	1033The division shall issue a pharmacy benefit manager license to a person, business or other entity
1065	1065	1034that demonstrates to the division that it has the necessary organization, background expertise and
1066	1066	1035financial integrity to maintain such a license. A pharmacy benefit manager license shall be valid
1067	1067	1036for a period of 3 years and shall be renewable for additional 3-year periods. Initial application
1068	1068	1037and renewal fees for the license shall be established pursuant to section 3B of chapter 7.
1069	1069	1038 (b) A license granted pursuant to this section and any rights or interests therein shall not
1070	1070	1039be transferable.
1071	1071	1040 (c) A person, business or other entity licensed as a pharmacy benefit manager shall
1072	1072	1041submit data and reporting information to the center according to the standards and methods
1073	1073	1042specified by the center pursuant to section 10A of chapter 12C. 50 of 61
1074	1074	1043 (d) The division may issue or renew a license pursuant to this section, subject to
1075	1075	1044restrictions in order to protect the interests of consumers. Such restrictions may include: (i)
1076	1076	1045limiting the type of services that a license holder may provide; (ii) limiting the activities in which
1077	1077	1046the license holder may be engaged; or (iii) addressing conflicts of interest between pharmacy
1078	1078	1047benefit managers and health plan sponsors.
1079	1079	1048 (e) The division shall develop an application for licensure of pharmacy benefit managers
1080	1080	1049that shall include, but not be limited to: (i) the name of the applicant or pharmacy benefit
1081	1081	1050manager; (ii) the address and contact telephone number for the applicant or pharmacy benefit
1082	1082	1051manager; (iii) the name and address of the agent of the applicant or pharmacy benefit manager
1083	1083	1052for service of process in the commonwealth; (iv) the name and address of any person with
1084	1084	1053management or control over the applicant or pharmacy benefit manager; and (v) any audited
1085	1085	1054financial statements specific to the applicant or pharmacy benefit manager. An applicant or
1086	1086	1055pharmacy benefit manager shall report to the division any material change to the information
1087	1087	1056contained in its application, certified by an officer of the pharmacy benefit manager, within 30
1088	1088	1057days of such a change.
1089	1089	1058 (f) The division may suspend, revoke, refuse to issue or renew or place on probation a
1090	1090	1059pharmacy benefit manager license for cause, which shall include, but not be limited to: (i) the
1091	1091	1060applicant or pharmacy benefit manager engaging in fraudulent activity that is found by a court of
1092	1092	1061law to be a violation of state or federal law; (ii) the division receiving consumer complaints that
1093	1093	1062justify an action under this chapter to protect the health, safety and interests of consumers; (iii)
1094	1094	1063the applicant or pharmacy benefit manager failing to pay an application or renewal fee for a
1095	1095	1064license; (iv) the applicant or pharmacy benefit manager failing to comply with reporting 51 of 61
1096	1096	1065requirements of the center under section 10A of chapter 12C; or (v) the applicant pharmacy
1097	1097	1066benefit manager’s failing to comply with a requirement of this chapter.
1098	1098	1067 The division shall provide written notice to the applicant or pharmacy benefit manager
1099	1099	1068and advise in writing of the reason for any suspension, revocation, refusal to issue or renew or
1100	1100	1069placement on probation of a pharmacy benefit manager license under this chapter. A copy of the
1101	1101	1070notice shall be forwarded to the center. The applicant or pharmacy benefit manager may make
1102	1102	1071written demand upon the division within 30 days of receipt of such notification for a hearing
1103	1103	1072before the division to determine the reasonableness of the division’s action. The hearing shall be
1104	1104	1073held pursuant to chapter 30A.
1105	1105	1074 The division shall not suspend or cancel a license unless the division has first afforded
1106	1106	1075the pharmacy benefit manager an opportunity for a hearing pursuant to said chapter 30A.
1107	1107	1076 (g) If a person, business or other entity performs the functions of a pharmacy benefit
1108	1108	1077manager in violation of this chapter, the person, business or other entity shall be subject to a fine
1109	1109	1078of $5,000 per day for each day that the person, business or other entity is found to be in violation.
1110	1110	1079Penalties collected under this subsection shall be deposited into the Prescription Drug Cost
1111	1111	1080Assistance Trust Fund established in section 2RRRRR of chapter 29.
1112	1112	1081 (h) A pharmacy benefit manager licensed under this section shall notify a health carrier
1113	1113	1082client in writing of any activity, policy, practice contract or arrangement of the pharmacy benefit
1114	1114	1083manager that directly or indirectly presents any conflict of interest with the pharmacy benefit
1115	1115	1084manager’s relationship with or obligation to the health carrier client.
1116	1116	1085 (i) The division shall adopt any written policies, procedures or regulations that the
1117	1117	1086division determines are necessary to implement this section. 52 of 61
1118	1118	1087 Section 3. (a) The commissioner may make an examination of the affairs of a pharmacy
1119	1119	1088benefit manager when the commissioner deems prudent but not less frequently than once every 3
1120	1120	1089years. The focus of the examination shall be to ensure that a pharmacy benefit manager is able to
1121	1121	1090meet its responsibilities under contracts with carriers licensed under chapters 175, 176A, 176B,
1122	1122	1091or 176G. The examination shall be conducted according to the procedures set forth in paragraph
1123	1123	1092(6) of section 4 of chapter 175.
1124	1124	1093 (b) The commissioner, a deputy or an examiner may conduct an on-site examination of
1125	1125	1094each pharmacy benefit manager in the commonwealth to thoroughly inspect and examine its
1126	1126	1095affairs.
1127	1127	1096 (c) The charge for each such examination shall be determined annually according to the
1128	1128	1097procedures set forth in paragraph (6) of section 4 of chapter 175.
1129	1129	1098 (d) Not later than 60 days following completion of the examination, the examiner in
1130	1130	1099charge shall file with the commissioner a verified written report of examination under oath.
1131	1131	1100Upon receipt of the verified report, the commissioner shall transmit the report to the pharmacy
1132	1132	1101benefit manager examined with a notice that shall afford the pharmacy benefit manager
1133	1133	1102examined a reasonable opportunity of not more than 30 days to make a written submission or
1134	1134	1103rebuttal with respect to any matters contained in the examination report. Within 30 days of the
1135	1135	1104end of the period allowed for the receipt of written submissions or rebuttals, the commissioner
1136	1136	1105shall consider and review the reports together with any written submissions or rebuttals and any
1137	1137	1106relevant portions of the examiner’s work papers and enter an order:
1138	1138	1107 (i) adopting the examination report as filed with modifications or corrections and, if the
1139	1139	1108examination report reveals that the pharmacy benefit manager is operating in violation of this 53 of 61
1140	1140	1109section or any regulation or prior order of the commissioner, the commissioner may order the
1141	1141	1110pharmacy benefit manager to take any action the commissioner considered necessary and
1142	1142	1111appropriate to cure such violation;
1143	1143	1112 (ii) rejecting the examination report with directions to examiners to reopen the
1144	1144	1113examination for the purposes of obtaining additional data, documentation or information and re-
1145	1145	1114filing pursuant to the above provisions; or
1146	1146	1115 (iii) calling for an investigatory hearing with not less than 20 days’ notice to the
1147	1147	1116pharmacy benefit manager for purposes of obtaining additional documentation, data, information
1148	1148	1117and testimony.
1149	1149	1118 (e) Notwithstanding any general or special law to the contrary, including clause Twenty-
1150	1150	1119sixth of section 7 of chapter 4 and chapter 66, the records of any such audit, examination or other
1151	1151	1120inspection and the information contained in the records, reports or books of any pharmacy
1152	1152	1121benefit manager examined pursuant to this section shall be confidential and open only to the
1153	1153	1122inspection of the commissioner, or the examiners and assistants. Access to such confidential
1154	1154	1123material may be granted by the commissioner to law enforcement officials of the commonwealth
1155	1155	1124or any other state or agency of the federal government at any time if the agency or office
1156	1156	1125receiving the information agrees in writing to keep such material confidential. Nothing in this
1157	1157	1126subsection shall be construed to prohibit the required production of such records, and
1158	1158	1127information contained in the reports of such company or organization before any court of the
1159	1159	1128commonwealth or any master or auditor appointed by any such court, in any criminal or civil
1160	1160	1129proceeding, affecting such pharmacy benefit manager, its officers, partners, directors or 54 of 61
1161	1161	1130employees. The final report of any such audit, examination or any other inspection by or on
1162	1162	1131behalf of the division of insurance shall be a public record.
1163	1163	1132 SECTION 61. Notwithstanding any general or special law to the contrary, the health
1164	1164	1133policy commission, in consultation with the center for health information and analysis, the
1165	1165	1134executive office of health and human services and the division of insurance, shall produce
1166	1166	1135interim and final reports on the use of insulin in the commonwealth and the effects of capping
1167	1167	1136copayments and eliminating deductible and co-insurance requirements for insulin for individuals
1168	1168	1137with diabetes on health care access and system cost.
1169	1169	1138 The interim and final report shall include, but not be limited to: (i) rates of insulin
1170	1170	1139utilization; (ii) an analysis of the use of insulin, broken down by patient demographics,
1171	1171	1140geographic region and insulin delivery device; (iii) annual plan costs and member premiums; (iv)
1172	1172	1141the average price of insulin; (v) the average insulin price net of rebates or discounts received by
1173	1173	1142or accrued directly or indirectly by health insurance carriers; (vi) average and total out-of-pocket
1174	1174	1143expenditures on insulin delivery devices and glucose monitoring tests that are not included as
1175	1175	1144part of an insulin prescription; (vii) an analysis of the impact of capping co-payments and
1176	1176	1145eliminating deductible and co-insurance requirements for insulin on patient access to and cost of
1177	1177	1146care by patient demographics and geographic region; (viii) additional funding sources for the
1178	1178	1147Prescription Drug Cost Assistance Trust Fund established in section 2RRRRR of chapter 29 of
1179	1179	1148the General Laws; and (ix) any barriers to accessing insulin for individuals with diabetes and
1180	1180	1149policy recommendations for resolving such barriers. The interim report, including any
1181	1181	1150recommendations for expanding access to insulin for individuals with diabetes, shall be filed
1182	1182	1151with the clerks of the house of representatives and senate, the joint committee on public health,
1183	1183	1152the joint committee on health care financing and the house and senate committees on ways and 55 of 61
1184	1184	1153means not later than 18 months after the effective date of this act. The final report, including any
1185	1185	1154recommendations for expanding access to insulin for individuals with diabetes, shall be filed
1186	1186	1155with the clerks of the house of representatives and senate, the joint committee on public health,
1187	1187	1156the joint committee on health care financing and the house and senate committees on ways and
1188	1188	1157means not later than 3 years after the effective date of this act.
1189	1189	1158 SECTION 62. (a) Notwithstanding any general or special law to the contrary, the
1190	1190	1159commonwealth health insurance connector authority, in consultation with the division of
1191	1191	1160insurance, shall report on the impact of pharmaceutical pricing on health care costs and outcomes
1192	1192	1161for ConnectorCare and non-group and small group plans offered through the connector and its
1193	1193	1162members.
1194	1194	1163 The report shall include, but not be limited to: (i) information on the differential between
1195	1195	1164medication list price and price net of rebates for plans offered and the impact of those
1196	1196	1165differentials on member premiums; (ii) the relationship between medication list price and
1197	1197	1166member cost-sharing requirements; (iii) the impact of medication price changes over time on
1198	1198	1167premium and out-of-pocket costs in plans authorized under section 3 of chapter 176J of the
1199	1199	1168General Laws offered through the commonwealth health insurance connector authority; (iv)
1200	1200	1169trends in changes in medication list price and price net of rebates by health plan; (v) an analysis
1201	1201	1170of the impact of member out-of-pocket costs on medication utilization and member experience;
1202	1202	1171and (vi) an analysis of the impact of medication list price and price net of rebates on member
1203	1203	1172formulary access to medications. Data collected under this subsection shall be protected as
1204	1204	1173confidential and shall not be a public record under clause Twenty-sixth of section 7 of chapter 4
1205	1205	1174or under chapter 66 of the General Laws. 56 of 61
1206	1206	1175 The report shall be submitted to the joint committee on health care financing and the
1207	1207	1176house and senate committees on ways and means not later than July 1, 2025.
1208	1208	1177 (b) In fiscal year 2024, the amount required to be paid pursuant to the last paragraph of
1209	1209	1178section 6 of chapter 6D of the General Laws shall be increased by $500,000; provided, however,
1210	1210	1179that said $500,000 shall be provided to the commonwealth health insurance connector authority
1211	1211	1180not later than October 14, 2023 for data collection and analysis costs associated with the report
1212	1212	1181required by this section.
1213	1213	1182 SECTION 63. Notwithstanding any general or special law to the contrary, there shall be a
1214	1214	1183special commission to examine the feasibility of: (i) establishing a system for the bulk
1215	1215	1184purchasing and distribution of pharmaceutical products with a significant public health benefit
1216	1216	1185and the potential for significant health care cost savings for consumers through overall increased
1217	1217	1186purchase capacity; and (ii) making bulk purchase pricing information available to purchasers in
1218	1218	1187other states.
1219	1219	1188 The commission shall consist of: the commissioner of public health or a designee, who
1220	1220	1189shall serve as chair; the executive director of the group insurance commission or a designee; the
1221	1221	1190chief of pharmacy of the state office for pharmacy services; the MassHealth director of
1222	1222	1191pharmacy; the secretary of technology services and security; and 9 members to be appointed by
1223	1223	1192the commissioner of public health, 2 of whom shall be health care economists, 1 of whom shall
1224	1224	1193be an expert in health law and policy innovation, 1 of whom shall be an academic with relevant
1225	1225	1194expertise in the field, 1 of whom shall be a representative from a community health center, 1 of
1226	1226	1195whom shall be the chief executive officer of a hospital licensed in the commonwealth, 1 of
1227	1227	1196whom shall be a representative of the Massachusetts Association of Health Plans, Inc., 1 of 57 of 61
1228	1228	1197whom shall be a representative of Blue Cross Blue Shield of Massachusetts, Inc. and 1 of whom
1229	1229	1198shall be a member of the public with experience with health care and consumer protection.
1230	1230	1199 The commission shall hold not less than 3 public hearings in different geographic areas of
1231	1231	1200the commonwealth, accept input from the public and solicit expert testimony from individuals
1232	1232	1201representing health insurance carriers, pharmaceutical companies, independent and chain
1233	1233	1202pharmacies, hospitals, municipalities, health care practitioners, health care technology
1234	1234	1203professionals, community health centers, substance abuse disorder providers, public health
1235	1235	1204educational institutions and other experts identified by the commission.
1236	1236	1205 The commission shall consider: (i) the process by which the commonwealth could make
1237	1237	1206bulk purchases of pharmaceutical products with a significant public health benefit and the
1238	1238	1207potential for significant health care cost savings to consumers; (ii) the process by which both
1239	1239	1208governmental and nongovernmental entities may participate in a collaborative to purchase
1240	1240	1209pharmaceutical products with a significant public health benefit and the potential for significant
1241	1241	1210health care cost savings; (iii) the feasibility of developing an electronic information interchange
1242	1242	1211system to exchange bulk purchase price information with partnering states; (iv) potential sources
1243	1243	1212of funding available to implement bulk purchases; (v) potential cost savings of bulk purchases to
1244	1244	1213the commonwealth or other participating nongovernmental entities; (vi) the feasibility of
1245	1245	1214partnering with the federal government and or other states in the New England region; and (vii)
1246	1246	1215any other factors that the commission deems relevant.
1247	1247	1216 The commission shall file a report of its analysis, along with any recommended
1248	1248	1217legislation, if any, to the clerks of the senate and house of representatives, the house and senate
1249	1249	1218committees on ways and means, the joint committee on health care financing, the joint 58 of 61
1250	1250	1219committee on public health, the joint committee on elder affairs and the joint committee on
1251	1251	1220mental health, substance abuse and recovery not later than September 1, 2024.
1252	1252	1221 SECTION 64. (a) As used in this section, the following words shall have the following
1253	1253	1222meanings, unless the context clearly requires otherwise:
1254	1254	1223 “Chain pharmacist”, a pharmacist employed by a retail drug organization operating not
1255	1255	1224less than 10 retail drug stores within the commonwealth under section 39 of chapter 112 of the
1256	1256	1225General Laws.
1257	1257	1226 “Independent pharmacist”, a pharmacist actively engaged in the business of retail
1258	1258	1227pharmacy and employed in an organization of not more than 9 registered retail drugstores in the
1259	1259	1228commonwealth under said section 39 of said chapter 112 that employs not more than a total of
1260	1260	122920 full-time pharmacists.
1261	1261	1230 (b) There shall be a task force to: (i) review the drug supply chain including, but not
1262	1262	1231limited to: (A) plan and pharmacy benefit manager reimbursements to pharmacies; (B)
1263	1263	1232wholesaler or pharmacy service administrative organization prices to pharmacies; and (C) drug
1264	1264	1233manufacturer prices to pharmacies; (ii) review ways to recognize the unique challenges of small
1265	1265	1234and independent pharmacies; (iii) identify methods to increase pricing transparency throughout
1266	1266	1235the supply chain; (iv) make recommendations on the use of multiple maximum allowable costs
1267	1267	1236lists and their frequency of use for mail order products; (v) review the utilization of maximum
1268	1268	1237allowable costs lists or similar reimbursement structures established by a pharmacy benefit
1269	1269	1238manager or payer; (vi) review the availability of drugs to independent and chain pharmacies on
1270	1270	1239the maximum allowable cost list or any similar reimbursement structures established by a
1271	1271	1240pharmacy benefit manager or payer; (vii) review the pharmacy acquisition cost from national or 59 of 61
1272	1272	1241regional wholesalers that serve pharmacies compared to the reimbursement amount provided
1273	1273	1242through a maximum allowable cost list or any similar reimbursement structures established by a
1274	1274	1243pharmacy benefit manager or payer and the conditions under which an adjustment to a
1275	1275	1244reimbursement is appropriate; (viii) review the timing of pharmacy purchases of products and the
1276	1276	1245relative risk of list price changes related to the timing of dispensing the products; (ix) assess
1277	1277	1246ways to increase transparency for chain and independent pharmacists to understand the
1278	1278	1247methodology used by a pharmacy benefit manager or payer to develop a maximum allowable
1279	1279	1248cost list or any similar reimbursement structure established by the pharmacy benefit manager or
1280	1280	1249payer; (x) assess the prevalence and appropriateness of pharmacy benefit managers requiring, or
1281	1281	1250using financial incentives or penalties to incentivize, customer use of pharmacies with whom the
1282	1282	1251pharmacy benefit manager has an ownership or financial interest; (xi) examine the impact of the
1283	1283	1252merger or consolidation of pharmacy benefit managers and health carrier clients on drug costs;
1284	1284	1253(xii) review current appeals processes for a chain or independent pharmacist to request an
1285	1285	1254adjustment on a reimbursement subject to a maximum allowable cost list or any similar
1286	1286	1255reimbursement structure established by a pharmacy benefit manager or payer; and (xiii) evaluate
1287	1287	1256the effect of differences between pharmacy benefit manager payments to pharmacies and charges
1288	1288	1257made to health carrier clients on drug price.
1289	1289	1258 (c) The task force shall consist of: the commissioner of insurance or a designee, who shall
1290	1290	1259serve as chair; and 6 members to be appointed by the commissioner, 2 of whom shall be
1291	1291	1260independent pharmacists employed in the independent pharmacy setting or representatives of
1292	1292	1261independent pharmacies, 2 of whom shall be chain pharmacists employed in the chain pharmacy
1293	1293	1262setting or representatives of chain pharmacies and 2 of whom shall be representatives of a
1294	1294	1263pharmacy benefit managers or payers who manage their own pharmacy benefit services. If more 60 of 61
1295	1295	1264than 1 independent pharmacist is appointed, each appointee shall represent a distinct practice
1296	1296	1265setting. If more than 1 chain pharmacist is appointed, each appointee shall represent a distinct
1297	1297	1266practice setting. A pharmacy benefit manager or payer appointed to the task force shall not be
1298	1298	1267co-owned or have any ownership relationship with any other payer, pharmacy benefit manager or
1299	1299	1268chain pharmacist also appointed to the task force.
1300	1300	1269 (d) The commissioner shall file the task force’s findings with the clerks of the house of
1301	1301	1270representatives and the senate, the joint committee on health care financing and the house and
1302	1302	1271senate committees on ways and means not later than December 1, 2024.
1303	1303	1272 SECTION 65. The health policy commission shall consult with relevant stakeholders,
1304	1304	1273including, but not limited to, consumers, consumer advocacy organizations, organizations
1305	1305	1274representing people with disabilities and chronic health conditions, providers, provider
1306	1306	1275organizations, payers, pharmaceutical manufacturers, pharmacy benefit managers and health care
1307	1307	1276economists and other academics, to assist in the development and periodic review of regulations
1308	1308	1277to implement section 20 of chapter 6D of the General Laws, including, but not limited to: (i)
1309	1309	1278establishing the criteria and processes for identifying the proposed value of an eligible drug as
1310	1310	1279defined in said section 20 of said chapter 6D; and (ii) determining the appropriate price increase
1311	1311	1280for a public health essential drug as described within the definition of eligible drug in said
1312	1312	1281section 20 of said chapter 6D.
1313	1313	1282 The commission shall hold its first public outreach not more than 45 days after the
1314	1314	1283effective date of this act and shall, to the extent possible, ensure fair representation and input
1315	1315	1284from a diverse array of stakeholders. 61 of 61
1316	1316	1285 SECTION 66. Notwithstanding subsection (b) of section 15A of chapter 6D of the
1317	1317	1286General Laws, for the purposes of providing early notice under said section 15A of said chapter
1318	1318	12876D, the health policy commission shall determine a significant price increase for a generic drug
1319	1319	1288to be defined as a generic drug priced at $100 or more per wholesale acquisition cost unit that
1320	1320	1289increases in cost by 100 per cent or more during any 12-month period.
1321	1321	1290 SECTION 67. Section 66 is hereby repealed.
1322	1322	1291 SECTION 68. The drug access program, established in section 16DD of chapter 6A of
1323	1323	1292the General Laws, shall take effect not later than 1 year after the effective date of this act.
1324	1324	1293 SECTION 69. To implement chapter 63E of the General Laws, as inserted by section 44,
1325	1325	1294the commissioner of revenue shall promulgate regulations or other guidance regarding the
1326	1326	1295reporting and payment of the penalty as soon as practicable after the effective date of this act.
1327	1327	1296 SECTION 70. Chapter 63E of the General Laws, as inserted by section 44, shall apply to
1328	1328	1297sales commencing on or after the effective date of this act.
1329	1329	1298 SECTION 71. Sections 22 and 40 shall take effect on July 1, 2024.
1330	1330	1299 SECTION 72. Sections 42, 46, 48, 51, 53 and 55 shall take effect January 1, 2024.
1331	1331	1300 SECTION 73. Section 58 shall take effect on July 1, 2024.
1332	1332	1301 SECTION 74. Section 60 shall take effect on March 30, 2024.
1333	1333	1302 SECTION 75. Section 67 shall take effect on January 1, 2025.