Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S783 Compare Versions

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

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1	1	1 of 1
2	2	SENATE DOCKET, NO. 2130 FILED ON: 1/20/2023
3	3	SENATE . . . . . . . . . . . . . . No. 783
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Mark C. Montigny
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act to promote transparency and prevent price gouging of pharmaceutical drug prices.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :Mark C. MontignySecond Bristol and PlymouthMichael J. BarrettThird Middlesex1/30/2023 1 of 18
16	16	SENATE DOCKET, NO. 2130 FILED ON: 1/20/2023
17	17	SENATE . . . . . . . . . . . . . . No. 783
18	18	By Mr. Montigny, a petition (accompanied by bill, Senate, No. 783) of Mark C. Montigny and
19	19	Michael J. Barrett for legislation to promote transparency and prevent price gouging of
20	20	pharmaceutical drug prices. Health Care Financing.
21	21	[SIMILAR MATTER FILED IN PREVIOUS SESSION
22	22	SEE SENATE, NO. 804 OF 2021-2022.]
23	23	The Commonwealth of Massachusetts
24	24	_______________
25	25	In the One Hundred and Ninety-Third General Court
26	26	(2023-2024)
27	27	_______________
28	28	An Act to promote transparency and prevent price gouging of pharmaceutical drug prices.
29	29	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
30	30	of the same, as follows:
31	31	1 SECTION 1. Section 1 of chapter 6D of the General Laws, as appearing in the 2020
32	32	2Official Edition, is hereby amended by inserting after the definition of “Performance penalty” the
33	33	3following 2 definitions:-
34	34	4 “Pharmaceutical manufacturing company”, an entity engaged in the production,
35	35	5preparation, propagation, conversion or processing of prescription drugs, directly or indirectly,
36	36	6by extraction from substances of natural origin or independently by means of chemical synthesis
37	37	7or by a combination of extraction and chemical synthesis or an entity engaged in the packaging,
38	38	8repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
39	39	9''Pharmaceutical manufacturing company'' shall not include a wholesale drug distributor licensed 2 of 18
40	40	10under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
41	41	11chapter 112.
42	42	12 “Pharmacy benefit manager”, a person or entity that administers: (i) a prescription drug,
43	43	13prescription device or pharmacist services; or (ii) a prescription drug and device and pharmacist
44	44	14services portion of a health benefit plan on behalf of a plan sponsor including, but not limited to,
45	45	15self-insured employers, insurance companies and labor unions; provided, however, that
46	46	16“Pharmacy benefit manager” shall include a health benefit plan that does not contract with a
47	47	17pharmacy benefit manager and administers its own: (a) prescription drug, prescription device or
48	48	18pharmacist services; or (b) prescription drug and device and pharmacist services portion, unless
49	49	19specifically exempted by the center.
50	50	20 SECTION 2. Said section 1 of said chapter 6D, as so appearing, is hereby further
51	51	21amended by inserting after the definition of “Physician” the following definition:-
52	52	22 “Pipeline drugs”, prescription drug products containing a new molecular entity for which
53	53	23the sponsor has submitted a new drug application or biologics license application and received an
54	54	24action date from the federal Food and Drug Administration.
55	55	25 SECTION 3. Section 6 of said chapter 6D, as so appearing, is hereby amended by adding
56	56	26the following paragraph:-
57	57	27 If the analysis of spending trends with respect to the pharmaceutical or biopharmaceutical
58	58	28products increases the expenses of the commission, the estimated increases in the commission’s
59	59	29expenses shall be assessed fully to pharmaceutical manufacturing companies and pharmacy
60	60	30benefit managers in the same manner as the assessment under section 68 of chapter 118E. A
61	61	31pharmacy benefit manager that is a surcharge payor subject to the preceding paragraph and 3 of 18
62	62	32administers its own prescription drug, prescription device or pharmacist services or prescription
63	63	33drug and device and pharmacist services portion shall not be subject to additional assessment
64	64	34under this paragraph.
65	65	35 SECTION 4. Section 8 of said chapter 6D, as so appearing, is hereby amended by
66	66	36striking out, in line 32, the words “ and (xi) ” and inserting in place thereof the following words:-
67	67	37(xi) not less than 3 representatives of the pharmaceutical industry; (xii) at least 1 pharmacy
68	68	38benefit manager; and (xiii).
69	69	39 SECTION 5. Said section 8 of said chapter 6D of the General Laws, as so appearing, is
70	70	40hereby amended by inserting after the word “commission”, in line 59, the first time it appears,
71	71	41the following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical
72	72	42manufacturing companies, testimony concerning factors underlying prescription drug costs and
73	73	43price increases, the impact of manufacturer rebates, discounts and other price concessions on net
74	74	44pricing, the availability of alternative drugs or treatments and any other matters as determined by
75	75	45the commission.
76	76	46 SECTION 6. Said chapter 6D is hereby further amended by inserting after section 15 the
77	77	47following section:-
78	78	48 Section 15A. (a) The commission shall conduct an annual study of pharmaceutical
79	79	49manufacturing companies with pipeline drugs, generic drugs or biosimilar drug products that
80	80	50may have a significant impact on statewide health care expenditures; provided, however, that the
81	81	51commission may issue interim studies if it deems it necessary. The commission may contract
82	82	52with a third-party entity to implement this section that has familiarity with the development and 4 of 18
83	83	53approval of pharmaceuticals or biologics or studies and compares the clinical effectiveness and
84	84	54value of prescription drugs.
85	85	55 (b) A pharmaceutical manufacturing company shall, provide early notice to the
86	86	56commission for: (i) a pipeline drug; (ii) an abbreviated new drug application for generic drugs,
87	87	57upon submission to the federal Food and Drug Administration; or (iii) a biosimilar biologics
88	88	58license application upon the receipt of an action date from the federal Food and Drug
89	89	59Administration. The commission shall make early notice information available to the office of
90	90	60Medicaid or another agency in addition to acute hospitals, ambulatory surgical centers and
91	91	61surcharge payors, as deemed appropriate.
92	92	62 Early notice shall be submitted to the commission not later than 60 days after receipt of
93	93	63the federal Food and Drug Administration action date or after the submission of an abbreviated
94	94	64new drug application to the federal Food and Drug Administration action.
95	95	65 For each prescription drug product, early notice shall include a brief description of the: (i)
96	96	66primary disease, health condition or therapeutic area being studied and the indication; (ii) route
97	97	67of administration being studied; (iii) clinical trial comparators; and (iv) estimated year of market
98	98	68entry. To the extent possible, information shall be collected using data fields consistent with
99	99	69those used by the federal National Institutes of Health for clinical trials.
100	100	70 For each pipeline drug, early notice shall include whether the drug has been designated
101	101	71by the federal Food and Drug Administration: (i) orphan drug; (ii) fast track; (iii) breakthrough
102	102	72therapy; (iv) for accelerated approval; or (v) priority review for a new molecular entity. 5 of 18
103	103	73 Notwithstanding the foregoing, submissions for drugs in development that receive such a
104	104	74designation by the federal Food and Drug Administration for new molecular entities shall be
105	105	75provided as soon as practical upon receipt of the relevant designation.
106	106	76 (c) The commission shall assess pharmaceutical manufacturing companies for the
107	107	77implementation of this section in a similar manner to the annual registration fees and other
108	108	78assessments related to the annual marketing disclosure reports required under section 2A of
109	109	79chapter 111N.
110	110	80 (d) Notwithstanding any general or special law to the contrary, information provided
111	111	81under this section shall be protected as confidential and shall not be a public record under clause
112	112	82Twenty-sixth of section 7 of chapter 4 or under chapter 66.
113	113	83 SECTION 7. Said chapter 6D is hereby further amended by adding the following 2
114	114	84sections:-
115	115	85 Section 20. (a) As used in this section, the following words shall have the following
116	116	86meanings unless the context clearly requires otherwise:
117	117	87 “Eligible drug”, a (i) brand name drug or biologic, not including a biosimilar, that has a
118	118	88launch wholesale acquisition cost of $50,000 or more for a 1-year supply or full course of
119	119	89treatment; (ii) biosimilar drug that has a launch wholesale acquisition cost that is not at least 15
120	120	90per cent lower than the referenced brand biologic at the time the biosimilar is launched; or (iii)
121	121	91public health essential drug, as defined in section 239 of chapter 111, with a significant price
122	122	92increase over a defined period of time as determined by the commission by regulation or with a
123	123	93wholesale acquisition cost of $25,000 or more for a 1-year supply or full course of treatment. 6 of 18
124	124	94 “Manufacturer”, a pharmaceutical manufacturer of an eligible drug.
125	125	95 “Public health essential drug”, shall have the same meaning as defined in section 239 of
126	126	96chapter 111.
127	127	97 (b) The commission shall review the impact of eligible drug costs on patient access;
128	128	98provided, however, that the commission may prioritize the review of eligible drugs based on
129	129	99potential impact to consumers.
130	130	100 In order to conduct a review of eligible drugs, the commission may require a
131	131	101manufacturer to disclose to the commission within a reasonable time period information relating
132	132	102to the manufacturer’s pricing of an eligible drug. The disclosed information shall be on a
133	133	103standard reporting form developed by the commission with the input of the manufacturers and
134	134	104shall include, but not be limited to:
135	135	105 (i) a schedule of the drug’s wholesale acquisition cost increases over the previous 5
136	136	106calendar years;
137	137	107 (ii) the manufacturer’s aggregate, company-level research and development and other
138	138	108relevant capital expenditures, including facility construction, for the most recent year for which
139	139	109final audited data are available;
140	140	110 (iii) a written, narrative description, suitable for public release, of factors that contributed
141	141	111to reported changes in wholesale acquisition cost during the previous 5 calendar years; and
142	142	112 (iv) any other information that the manufacturer wishes to provide to the commission or
143	143	113that the commission requests. 7 of 18
144	144	114 (c) Based on the records furnished under subsection (b) and available information from
145	145	115the center for health information and analysis or an outside third party, the commission shall
146	146	116identify a proposed value for the eligible drug. The commission may request additional relevant
147	147	117information that it deems necessary.
148	148	118 Any information, analyses or reports regarding an eligible drug review shall be provided
149	149	119to the manufacturer. The commission shall consider any clarifications or data provided by the
150	150	120manufacturer with respect to the eligible drug. The commission shall not base its determination
151	151	121on the proposed value of the eligible drug solely on the analysis or research of an outside third
152	152	122party.
153	153	123 (d) If, after review of an eligible drug and after receiving information from the
154	154	124manufacturer under subsections (b) or (e), the commission determines that the manufacturer’s
155	155	125pricing of the eligible drug does not substantially exceed the proposed value of the drug, the
156	156	126commission shall notify the manufacturer, in writing, of its determination and shall evaluate
157	157	127other ways to mitigate the eligible drug’s cost in order to improve patient access to the eligible
158	158	128drug. The commission may engage with the manufacturer and other relevant stakeholders,
159	159	129including, but not limited to, patients, patient advocacy organizations, providers, provider
160	160	130organizations and payers, to explore options for mitigating the cost of the eligible drug. Upon the
161	161	131conclusion of a stakeholder engagement process under this subsection, the commission shall
162	162	132issue recommendations on ways to reduce the cost of the eligible drug for the purpose of
163	163	133improving patient access to the eligible drug. Recommendations may include, but not be limited
164	164	134to: (i) an alternative payment plan or methodology; (ii) a bulk purchasing program; (iii) co-pay,
165	165	135deductible, coinsurance or other cost-sharing restrictions; and (iv) a reinsurance program to
166	166	136subsidize the cost of the eligible drug. The recommendations shall be publicly posted on the 8 of 18
167	167	137commission’s website and provided to the clerks of the house of representatives and senate, the
168	168	138joint committee on health care financing and the house and senate committees on ways and
169	169	139means.
170	170	140 (e) If, after review of an eligible drug, the commission determines that the manufacturer’s
171	171	141pricing of the eligible drug substantially exceeds the proposed value of the drug, the commission
172	172	142shall request that the manufacturer provide further information related to the pricing of the
173	173	143eligible drug and the manufacturer’s reasons for the pricing not later than 30 days after receiving
174	174	144the request.
175	175	145 (f) Not later than 60 days after receiving information from the manufacturer under
176	176	146subsections (b) or (e), the commission shall confidentially issue a determination on whether the
177	177	147manufacturer’s pricing of an eligible drug substantially exceeds the commission’s proposed
178	178	148value of the drug. If the commission determines that the manufacturer’s pricing of an eligible
179	179	149drug substantially exceeds the proposed value of the drug, the commission shall confidentially
180	180	150notify the manufacturer, in writing, of its determination and require the manufacturer to enter
181	181	151into an access improvement plan under section 21.
182	182	152 (g) Records disclosed by a manufacturer under this section shall: (i) be accompanied by
183	183	153an attestation that all information provided is true and correct; (ii) not be public records under
184	184	154clause Twenty-sixth of section 7 of chapter 4 or chapter 66; and (iii) remain confidential;
185	185	155provided, however, that the commission may produce reports summarizing any findings;
186	186	156provided further, that any such report shall not be in a form that identifies specific prices charged
187	187	157for or rebate amounts associated with drugs by a manufacturer or in a manner that is likely to
188	188	158compromise the financial, competitive or proprietary nature of the information. 9 of 18
189	189	159 Any request for further information made by the commission under subsection (e) or any
190	190	160determination issued or written notification made by the commission under subsection (f) shall
191	191	161not be public records under said clause Twenty-sixth of said section 7 of said chapter 4 or said
192	192	162chapter 66.
193	193	163 (h) If the manufacturer fails to timely comply with the commission’s request for records
194	194	164under subsections (b) or (e), or otherwise knowingly obstructs the commission’s ability to issue
195	195	165its determination under subsection (f), including, but not limited to, by providing incomplete,
196	196	166false or misleading information, the commission may impose appropriate sanctions against the
197	197	167manufacturer, including reasonable monetary penalties not to exceed $1,000,000, in each
198	198	168instance. The commission shall seek to promote compliance with this section and shall only
199	199	169impose a civil penalty on the manufacturer as a last resort.
200	200	170 (i) The commission shall adopt any written policies, procedures or regulations that the
201	201	171commission determines are necessary to implement this section.
202	202	172 Section 21. (a) The commission shall establish procedures to assist manufacturers in
203	203	173filing and implementing an access improvement plan.
204	204	174 Upon providing written notice provided under subsection (f) of section 20, the
205	205	175commission shall require that a manufacturer whose pricing of an eligible drug substantially
206	206	176exceeds the commission’s proposed value of the drug file an access improvement plan with the
207	207	177commission. Not later than 45 days after receipt of a notice under subsection (g) of section 20, a
208	208	178manufacturer shall: (i) file an access improvement plan; or (ii) provide written notice declining
209	209	179the commission’s request. 10 of 18
210	210	180 (b) An access improvement plan shall: (i) be generated by the manufacturer; (ii) identify
211	211	181the reasons for the manufacturer’s drug price; and (iii) include, but not be limited to, specific
212	212	182strategies, adjustments and action steps the manufacturer proposes to implement to address the
213	213	183cost of the eligible drug in order to improve patient access to the eligible drug. The proposed
214	214	184access improvement plan shall include specific identifiable and measurable expected outcomes
215	215	185and a timetable for implementation. The timetable for an access improvement plan shall not
216	216	186exceed 18 months.
217	217	187 (c) The commission shall approve any access improvement plan that it determines: (i) is
218	218	188reasonably likely to address the cost of an eligible drug in order to substantially improve patient
219	219	189access to the eligible drug; and (ii) has a reasonable expectation for successful implementation.
220	220	190 (d) If the commission determines that the access improvement plan is unacceptable or
221	221	191incomplete, the commission may provide consultation on the criteria that have not been met and
222	222	192may allow an additional time period of not more than 30 calendar days for resubmission;
223	223	193provided, however, that all aspects of the access improvement plan shall be proposed by the
224	224	194manufacturer and the commission shall not require specific elements for approval.
225	225	195 (e) Upon approval of the proposed access improvement plan, the commission shall notify
226	226	196the manufacturer to begin immediate implementation of the access improvement plan. All
227	227	197manufacturers implementing an approved access improvement plan shall be subject to additional
228	228	198reporting requirements and compliance monitoring as determined by the commission. The
229	229	199commission shall provide assistance to the manufacturer in the successful implementation of the
230	230	200access improvement plan. 11 of 18
231	231	201 (f) All manufacturers shall work in good faith to implement the access improvement plan.
232	232	202At any point during the implementation of the access improvement plan the manufacturer may
233	233	203file amendments to the access improvement plan, subject to approval of the commission.
234	234	204 (g) At the conclusion of the timetable established in the access improvement plan, the
235	235	205manufacturer shall report to the commission regarding the outcome of the access improvement
236	236	206plan. If the commission determines that the access improvement plan was unsuccessful, the
237	237	207commission shall: (i) extend the implementation timetable of the existing access improvement
238	238	208plan; (ii) approve amendments to the access improvement plan as proposed by the manufacturer;
239	239	209(iii) require the manufacturer to submit a new access improvement plan; or (iv) waive or delay
240	240	210the requirement to file any additional access improvement plans.
241	241	211 (h) The commission may submit a recommendation for proposed legislation to the joint
242	242	212committee on health care financing if the commission determines that further legislative
243	243	213authority is needed to assist manufacturers with the implementation of access improvement plans
244	244	214or otherwise ensure compliance with this section.
245	245	215 (i) An access improvement plan under this section shall remain confidential in
246	246	216accordance with section 2A.
247	247	217 (j) The commission shall assess a civil penalty to a manufacturer of not more than
248	248	218$1,000,000, in each instance, if the commission determines that the manufacturer: (i) willfully
249	249	219neglected to file an access improvement plan with the commission under subsection (a); (ii)
250	250	220failed to file an acceptable access improvement plan in good faith with the commission; (iii)
251	251	221failed to implement the access improvement plan in good faith; or (iv) knowingly failed to
252	252	222provide information required by this section to the commission or knowingly falsified the 12 of 18
253	253	223information,. The commission shall seek to promote compliance with this section and shall only
254	254	224impose a civil penalty as a last resort.
255	255	225 (k) If a manufacturer fails to enter into an access improvement plan under this section, the
256	256	226commission may publicly post the proposed value of the eligible drug, hold a public hearing on
257	257	227the proposed value of the eligible drug and solicit public comment. The manufacturer shall
258	258	228appear and testify at any hearing held on the eligible drug’s proposed value. Upon the conclusion
259	259	229of a public hearing under this subsection, the commission shall issue recommendations on ways
260	260	230to reduce the cost of an eligible drug for the purpose of improving patient access to the eligible
261	261	231drug. The recommendations shall be publicly posted on the commission’s website and provided
262	262	232to the clerks of the house of representatives and senate, the joint committee on health care
263	263	233financing and the house and senate committees on ways and means.
264	264	234 (l) Amounts collected under this section shall be deposited in to the Prevention and
265	265	235Wellness Trust Fund established in section 2G of chapter 111.
266	266	236 (m) The commission shall promulgate regulations necessary to implement this section.
267	267	237 SECTION 8. Chapter 12 of the General Laws, as so appearing, is hereby amended by
268	268	238striking out section 11N and inserting in place thereof the following section:-
269	269	239 Section 11N. (a) The attorney general shall monitor trends in the health care market
270	270	240including, but not limited to, trends in provider organization size and composition, consolidation
271	271	241in the provider market, payer contracting trends, patient access and quality issues in the health
272	272	242care market and prescription drug cost trends. The attorney general may obtain the following
273	273	243information from a private health care payer, public health care payer, pharmaceutical
274	274	244manufacturing company, pharmacy benefit manager, provider or provider organization as any of 13 of 18
275	275	245those terms may be defined in section 1 of chapter 6D: (i) any information that is required to be
276	276	246submitted under sections 8, 9 10 and 10A of chapter 12C; (ii) filings, applications and supporting
277	277	247documentation related to any cost and market impact review under section 13 of said chapter 6D;
278	278	248(iii) filings, applications and supporting documentation related to a determination of need
279	279	249application filed under section 25C of chapter 111; and (iv) filings, applications and supporting
280	280	250documentation submitted to the federal Centers for Medicare and Medicaid Services or the
281	281	251Office of the Inspector General for any demonstration project. Under section 17 of said chapter
282	282	25212C and section 8 of said chapter 6D and subject to the limitations stated in those sections, the
283	283	253attorney general may require that any provider, provider organization, pharmaceutical
284	284	254manufacturing company, pharmacy benefit manager, private health care payer or public health
285	285	255care payer produce documents, answer interrogatories and provide testimony under oath related
286	286	256to health care costs and cost trends, pharmaceutical costs, pharmaceutical cost trends, the factors
287	287	257that contribute to cost growth within the commonwealth's health care system and the relationship
288	288	258between provider costs and payer premium rates and the relationship between pharmaceutical
289	289	259drug costs and payer premium rates.
290	290	260 (b) The attorney general may investigate a pharmaceutical manufacturing company or
291	291	261pharmacy benefit manager referred to the attorney general by the center for health information
292	292	262and analysis under section 11 of chapter 12C to determine whether the pharmaceutical
293	293	263manufacturing company or pharmacy benefit manager engaged in unfair methods of competition
294	294	264or anticompetitive behavior in violation of chapter 93A or any other law and, if appropriate, take
295	295	265action under said chapter 93A or any other law to protect consumers in the health care market.
296	296	266 (c) The attorney general may intervene or otherwise participate in efforts by the
297	297	267commonwealth to obtain exemptions or waivers from certain federal laws regarding provider 14 of 18
298	298	268market conduct, including, from the federal Office of the Inspector General, a waiver or
299	299	269expansion of the safe harbors' provided for under 42 U.S.C. § 1320a-7b and obtaining from the
300	300	270federal Office of the Inspector General a waiver of or exemption from 42 U.S.C. § 1395nn
301	301	271subsections (a) to (e), inclusive.
302	302	272 (d) Nothing in this section shall limit the authority of the attorney general to protect
303	303	273consumers in the health care market under any other law.
304	304	274 SECTION 9. Chapter 12C of the General Laws, as so appearing, is hereby amended by
305	305	275inserting after section 10 the following section:-
306	306	276 Section 10A. (a) The center shall promulgate regulations necessary to ensure the uniform
307	307	277analysis of information regarding pharmaceutical manufacturing companies and pharmacy
308	308	278benefit managers and that enable the center to analyze: (i) year-over-year wholesale acquisition
309	309	279cost changes; (ii) year-over-year trends in net expenditures; (iii) net expenditures on subsets of
310	310	280brand and generic pharmaceuticals identified by the center; (iv) research and development costs
311	311	281as a percentage of revenue, costs paid with public funds and costs paid by third parties, to the
312	312	282extent such costs are attributable to a specific product or set of products; (v) annual marketing
313	313	283and advertising costs, identifying costs for direct-to-consumer advertising; (vi) annual profits
314	314	284over the most recent 5-year period; (vii) information regarding trends of estimated aggregate
315	315	285drug rebates and other price reductions paid by a pharmaceutical manufacturing company in
316	316	286connection with utilization of all pharmaceutical drug products offered by the pharmaceutical
317	317	287manufacturing company; (viii) information regarding trends of estimated aggregate drug rebates
318	318	288and other price reductions paid by a pharmacy benefit manager in connection with utilization of
319	319	289all drugs offered through the pharmacy benefit manager; (ix) information regarding pharmacy 15 of 18
320	320	290benefit manager practices in passing drug rebates or other price reductions received by the
321	321	291pharmacy benefit manager to a private or public health care payer or to the consumer; (x)
322	322	292information regarding discount or free product vouchers that a retail pharmacy provides to a
323	323	293consumer in connection with a pharmacy service, item or prescription transfer offer or to any
324	324	294discount, rebate, product voucher or other reduction in an individual's out-of-pocket expenses,
325	325	295including co-payments and deductibles under section 3 of chapter 175H; (xi) cost disparities
326	326	296between prices charged to purchasers in the commonwealth and purchasers outside of the United
327	327	297States and (xii) any other information deemed necessary by the center.
328	328	298 (b) The center shall require the submission of available data and other information from
329	329	299pharmaceutical manufacturing companies and pharmacy benefit managers including, but not
330	330	300limited to: (i) changes in wholesale acquisition costs for prescription drug products as identified
331	331	301by the center; (ii) aggregate, company-level and product-specific research and development to
332	332	302the extent attributable to a specific product or products and other relevant capital expenditures
333	333	303for the most recent year for which final audited data are available for prescription drug products
334	334	304as identified by the center; (iii) the price paid by the manufacturer to acquire the prescription
335	335	305drug product if not developed by the manufacturer; (iv) the 5-year history of any increases in the
336	336	306wholesale acquisition costs; (v) annual marketing and advertising expenditures apportioned by
337	337	307activities directed to consumers and prescribers for prescription drug products as identified by
338	338	308the center; and (vi) a description, suitable for public release, of factors that contributed to
339	339	309reported changes in wholesale acquisition costs for prescription drug products as identified by
340	340	310the center.
341	341	311 SECTION 10. Section 11 of said chapter 12C is hereby amended by striking out in its
342	342	312entirety and inserting in place thereof the following:- 16 of 18
343	343	313 Section 11. The center shall ensure the timely reporting of information required under
344	344	314sections 8, 9, 10 and 10A. The center shall notify payers, providers, provider organizations,
345	345	315pharmacy benefit managers and pharmaceutical manufacturing companies of any applicable
346	346	316reporting deadlines. The center shall notify, in writing, a private health care payer, provider,
347	347	317provider organization, pharmacy benefit manager or pharmaceutical manufacturing company that
348	348	318it has failed to meet a reporting deadline and that failure to respond within 2 weeks of the receipt
349	349	319of the notice shall result in penalties. The center shall assess a penalty against a private health
350	350	320care payer, provider, provider organization, pharmacy benefit manager or pharmaceutical
351	351	321manufacturing company that fails, without just cause, to provide the requested information
352	352	322within 2 weeks following receipt of the written notice required under this paragraph of up to
353	353	323$20,000 per week for each week of delay after the 2-week period following receipt of the written
354	354	324notice; provided, however, that the maximum annual penalty against a private health care payer,
355	355	325provider, provider organization, pharmacy benefit manager or pharmaceutical manufacturing
356	356	326company under this section shall be $1,000,000. Amounts collected under this section shall be
357	357	327deposited in the Healthcare Payment Reform Fund established in section 100 of chapter 194 of
358	358	328the acts of 2011.
359	359	329 The center shall notify the attorney general of any pharmaceutical manufacturing
360	360	330company or pharmacy benefit manager that fails to comply with this section for further action
361	361	331pursuant to section 11N of chapter 12 or any other law.
362	362	332 For the purposes of this section, the center may promulgate regulations to define “just
363	363	333cause”. 17 of 18
364	364	334 SECTION 11. Said chapter 12C is hereby further amended by striking out section 17, as
365	365	335so appearing, and inserting thereof the following section:-
366	366	336 Section 17. The attorney general may review and analyze any information submitted to
367	367	337the center under sections 8, 9, 10, 10A and the health policy commission under section 8 of
368	368	338chapter 6D. The attorney general may require that any provider, provider organization,
369	369	339pharmaceutical manufacturing company, pharmacy benefit manager or payer produce
370	370	340documents, answer interrogatories and provide testimony under oath related to health care costs
371	371	341and cost trends, pharmaceutical cost trends, factors that contribute to cost growth within the
372	372	342commonwealth's health care system and the relationship between provider costs and payer
373	373	343premium rates. The attorney general shall keep confidential all nonpublic information and
374	374	344documents obtained under this section and shall not disclose the information or documents to any
375	375	345person without the consent of the provider, pharmaceutical manufacturing company, pharmacy
376	376	346benefit manager or payer that produced the information or documents except in a public hearing
377	377	347under said section 8 of said chapter 6D, a rate hearing before the division of insurance or in a
378	378	348case brought by the attorney general, if the attorney general believes that such disclosure will
379	379	349promote the health care cost containment goals of the commonwealth and that the disclosure
380	380	350shall be made in the public interest after taking into account any privacy, trade secret or
381	381	351anticompetitive considerations. The confidential information and documents shall not be public
382	382	352records and shall be exempt from disclosure under clause Twenty-sixth of section 7 of chapter 4
383	383	353or section 10 of chapter 66.
384	384	354 SECTION 12. Chapter 111 of the General Laws is hereby amended by adding the
385	385	355following section:- 18 of 18
386	386	356 Section 239. (a) As used in this section, the following words shall have the following
387	387	357meanings unless the context clearly requires otherwise:
388	388	358 “Public health essential drug”, a prescription drug, biologic or biosimilar approved by the
389	389	359federal Food and Drug Administration that: (i) appears on the Model List of Essential Medicines
390	390	360most recently adopted by the World Health Organization; or (ii) is deemed an essential medicine
391	391	361by the commissioner due to its efficacy in treating a life-threatening health condition or a chronic
392	392	362health condition that substantially impairs an individual's ability to engage in activities of daily
393	393	363living or because limited access to a certain population would pose a public health challenge.
394	394	364 (b) The department shall identify and publish a list of public health essential prescription
395	395	365drugs. The list shall be updated not less than annually and be made publicly available on the
396	396	366department’s website; provided, however, that the department may provide an interim listing of a
397	397	367public health essential drug prior to an annual update. The department shall also notify and
398	398	368forward a copy of the list to the health policy commission established under chapter 6D.