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