Massachusetts 2025-2026 Regular Session

Massachusetts Senate Bill S831 Compare Versions

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

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2	2	SENATE DOCKET, NO. 1264 FILED ON: 1/16/2025
3	3	SENATE . . . . . . . . . . . . . . No. 831
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Bruce E. Tarr
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 ensure access to prescription medication and community pharmacies.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :Bruce E. TarrFirst Essex and Middlesex 1 of 8
16	16	SENATE DOCKET, NO. 1264 FILED ON: 1/16/2025
17	17	SENATE . . . . . . . . . . . . . . No. 831
18	18	By Mr. Tarr, a petition (accompanied by bill, Senate, No. 831) of Bruce E. Tarr for legislation to
19	19	ensure access to prescription medication and community pharmacies. Financial Services.
20	20	The Commonwealth of Massachusetts
21	21	_______________
22	22	In the One Hundred and Ninety-Fourth General Court
23	23	(2025-2026)
24	24	_______________
25	25	An Act to ensure access to prescription medication and community pharmacies.
26	26	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
27	27	of the same, as follows:
28	28	1 SECTION 1. Chapter 175 is hereby amended by adding the following new section:-
29	29	2 Section 226A Contracts for Community Pharmacy Services
30	30	3 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
31	31	4drug application approved under 21 U.S.C. 355(c) except for: (A) any drug approved through an
32	32	5application submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that
33	33	6is pharmaceutically equivalent, as that term is defined by the United States Food and Drug
34	34	7Administration, to a drug approved under 21 U.S.C. 355(c); (B) an abbreviated new drug 407
35	35	8application that was approved by the United States Secretary of Health and Human Services
36	36	9under section 505(c) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
37	37	10date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
38	38	1119 of 58 1984, Public Law 98-417, 98 Stat. 1585; or (C) an authorized generic drug as defined in
39	39	1242 C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application 2 of 8
40	40	13approved 412 under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the health benefit plan as a
41	41	14brand name drug based on available data resources such as Medi-Span.
42	42	15 “Generic drug”, a retail drug that is: (i) marketed or distributed pursuant to an
43	43	16abbreviated new drug application approved under 21 U.S.C. 355(j); (ii) an authorized generic
44	44	17drug as defined in 42 C.F.R. 447.502; (iii) a drug that entered the market before January 1, 1962
45	45	18and was not originally marketed under a new drug application; or (iv) identified by the health
46	46	19benefit plan as a generic drug based on available data resources such as Medi-Span.
47	47	20 “Pharmacy Audit”, a process that involves the inspection of pharmacy records to ensure
48	48	21high quality services and the lack of Fraud Waste, and Abuse. This includes desk audits as well
49	49	22as in-person audits.
50	50	23 “Pharmacy Benefit Manager” as defined in MGL c 175 Section 226 (a).
51	51	24 Pharmacy Steering” A practice employed by a pharmacy benefit manager or carrier that
52	52	25channels a prescription to a pharmacy in which a pharmacy benefit manager or carrier has an
53	53	26ownership interest, and includes and is not limited to retail, mail order, or specialty pharmacy.
54	54	27 “Specialty Medications” medications that have a complex profile that require intensive
55	55	28patient management or special handling.
56	56	29 Section 1: Network Pharmacies and Payment for pharmacy services
57	57	30 A contract for pharmacy services between a pharmacy benefit manager and a pharmacy
58	58	31must include an ingredient cost that meets the criteria in section 2 and a dispensing fee equal be
59	59	32no less than what is paid by the State Medicaid Program. Payment for clean claims must include 3 of 8
60	60	33all applicable discounts. Contracts that include retroactive discounts and use “Generic Effective
61	61	34Rate” or “Brand Effective Rate” or any other similar retroactive rate reductions are prohibited.
62	62	35 Payment for pharmacy services to non-affiliated pharmacies must be equal to or greater
63	63	36than payment to pharmacies affiliated with or owned by the pharmacy benefit manager.
64	64	37 A pharmacy benefit manager shall not engage in pharmacy steering.
65	65	38 A pharmacy benefit manager must allow any pharmacy licensed in Massachusetts to
66	66	39provide any medication including “specialty medications” if the pharmacy is willing to provide
67	67	40the required services. The required services must be the same among all pharmacies.
68	68	41Requirements to provide specialty pharmacy medications cannot be designed to exclude
69	69	42community pharmacies
70	70	43 Section 2: Ingredient and Maximum Allowable Cost
71	71	44 (a) For the purposes of this section the term "maximum allowable cost list" shall mean a
72	72	45list of drugs, medical products or devices, or both medical products and devices, for which a
73	73	46maximum allowable cost has been established by a pharmacy benefits manager or covered entity.
74	74	47The term "maximum allowable cost" shall mean the maximum amount that a pharmacy benefits
75	75	48manager or covered entity will reimburse a pharmacy for the cost of a drug or a medical product
76	76	49or device inclusive of all discounts when the claim is processed or taken retroactively.
77	77	50 (b) The maxim allowable cost (if used) or the ingredient cost (if not used) must be equal
78	78	51to or greater than the cost used by the Massachusetts Medicaid Program 4 of 8
79	79	52 (c) The maximum allowable cost for non-affiliated pharmacies must be equal to or
80	80	53greater than the maximum allowable cost to pharmacies affiliated with or owned by the
81	81	54pharmacy benefit manager.
82	82	55 (d) Before a pharmacy benefits manager or covered entity may place a drug on a
83	83	56maximum allowable cost list the drug must be listed as "A" or "AB" rated in the most recent
84	84	57version of the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, also
85	85	58known as the Orange Book, or has an "NR" or "NA" rating or a similar rating by a nationally
86	86	59recognized reference; and that there are at least two therapeutically equivalent, multiple source
87	87	60drugs, or at least one generic drug available from one manufacturer, available for purchase by
88	88	61network pharmacies from national or regional wholesalers registered in Massachusetts.
89	89	62 (e) A pharmacy benefits manager or covered entity shall make available to each
90	90	63pharmacy with which the pharmacy benefits manager or covered entity has a contract and to
91	91	64each pharmacy included in a network of pharmacies served by a pharmacy services
92	92	65administrative organization with which the pharmacy benefits manager or covered entity has a
93	93	66contract, at the beginning of the term of a contract upon renewal of a contract, or upon request:
94	94	67 (1) The sources used to determine the maximum allowable costs for the drugs and
95	95	68medical products and devices on each maximum allowable cost list;
96	96	69 (2) Every maximum allowable cost for individual drugs used by that pharmacy benefits
97	97	70manager or covered entity for patients served by that contracted pharmacy; and
98	98	71 (3) Upon request, every maximum allowable cost list used by that pharmacy benefits
99	99	72manager or covered entity for patients served by that contracted pharmacy. 5 of 8
100	100	73 (f) A pharmacy benefits manager or covered entity shall:
101	101	74 (1) update each maximum allowable cost list at least every 3 business days
102	102	75 (2) Make the updated lists available to every pharmacy with which the pharmacy benefits
103	103	76manager or covered entity has a contract and to every pharmacy included in a network of
104	104	77pharmacies served by a pharmacy services administrative organization with which the pharmacy
105	105	78benefits manager or covered entity has a contract, in a readily accessible, secure and usable web-
106	106	79based format or other comparable format or process; and
107	107	80 (3) Utilize the updated maximum allowable costs to calculate the payments made to the
108	108	81contracted pharmacies within 2 business days.
109	109	82 (g) A pharmacy benefits manager or covered entity shall establish a clearly defined
110	110	83process through which a pharmacy may contest the cost for a particular drug or medical product
111	111	84or device.
112	112	85 (h) A pharmacy may base its appeal on one or more of the following:
113	113	86 (1) The ingredient cost established for a particular drug or medical product, or device is
114	114	87below the cost used by the Massachusetts Medicaid Program
115	115	88 (2) The pharmacy benefits manager or covered entity has placed a drug on the maximum
116	116	89allowable cost list that does not meet the requirements of subsection (d).
117	117	90 (i) The pharmacy must file its appeal within seven business days of its submission of the
118	118	91initial claim for reimbursement for the drug or medical product or device. A Pharmacy Services
119	119	92Administrative Organization (PSAO) may appeal on behalf of a pharmacy or group of
120	120	93pharmacies. The pharmacy benefits manager or covered entity must make a final determination 6 of 8
121	121	94resolving the pharmacy's appeal within seven business days of the pharmacy benefits manager or
122	122	95covered entity's receipt of the appeal.
123	123	96 (j) If the final determination is a denial of the pharmacy's appeal, the pharmacy benefits
124	124	97manager or covered entity must state the reason for the denial and provide the national drug code
125	125	98of an equivalent drug that is generally available for purchase by pharmacies in this state from
126	126	99national or regional wholesalers licensed by the state at a price which is equal to or less than the
127	127	100cost for that drug.
128	128	101 (k) If a pharmacy's appeal is determined to be valid by the pharmacy benefits manager or
129	129	102covered entity, the pharmacy benefits manager or covered entity shall retroactively adjust the
130	130	103cost of the drug or medical product or device and reprocess all claims that were paid incorrectly.
131	131	104The adjustment shall be effective from the date the pharmacy's appeal was filed, and the
132	132	105pharmacy benefits manager or covered entity shall provide reimbursement for all reprocessed
133	133	106claims.
134	134	107 (l) Once a pharmacy's appeal is determined to be valid by the pharmacy benefits manager
135	135	108or covered entity, the pharmacy benefits manager or covered entity shall adjust the cost of the
136	136	109drug or medical product or device for all similar pharmacies in the network as determined by the
137	137	110pharmacy benefits manager within 3 business days.
138	138	111 (m) A pharmacy benefits manager or covered entity shall make available on its secure
139	139	112web site information about the appeals process, including, but not limited to, a telephone number
140	140	113or process that a pharmacy may use to submit cost appeals. The medical products and devices
141	141	114subject to the requirements of this part are limited to the medical products and devices included
142	142	115as a pharmacy benefit under the pharmacy benefits contract. 7 of 8
143	143	116 (n) A pharmacy shall not disclose to any third party the cost lists and any related
144	144	117information it receives from a pharmacy benefits manager or covered entity; provided, a
145	145	118pharmacy may share such lists and related information with a pharmacy services administrative
146	146	119organization or similar entity with which the pharmacy has a contract to provide administrative
147	147	120services for that pharmacy. If a pharmacy shares this information with a pharmacy services
148	148	121administrative organization or similar entity, that organization or entity shall not disclose the
149	149	122information to any third party.
150	150	123 (o) If a generic medication is readily available from a wholesaler licensed in
151	151	124Massachusetts, a pharmacy benefit manager is prohibited from requiring the brand name be used
152	152	125or giving any financial incentive to a pharmacy or patient to use the brand name product. The
153	153	126Massachusetts Medicaid program is exempt from this requirement.
154	154	127 (p) Pharmacy Benefit Managers shall provide annually a report to the Commissioner that
155	155	128details all denied pharmacy appeals for that year to include: the name of the pharmacy, date of
156	156	129service for the claim, the drug name and billing code used on the claim, the amount billed, the
157	157	130amount paid, and the reason for the denial.
158	158	131 Section 3: If during a pharmacy audit, the pharmacy can use signature logs or statements
159	159	132from the prescriber obtained after the audit to validate the intent of a prescription or medication
160	160	133order. If the pharmacy provided the intended medication to the patient but there was a clerical
161	161	134error (with no financial or clinical impact), the pharmacy benefit manager is prohibited from
162	162	135recouping the ingredient cost and can only recoup the dispensing fee. All revenue from
163	163	136pharmacy audits must be given to the plan sponsor. 8 of 8
164	164	137 Section 4: A pharmacy benefit manager is prohibited from charging a community
165	165	138pharmacy for credentialing.
166	166	139 Section 5: The Insurance Commissioner shall enforce this act and shall promulgate
167	167	140regulations to enforce the provisions of this act. The commissioner may examine or audit the
168	168	141books and records of a pharmacy benefits manager providing claims processing services or other
169	169	142prescription drug or device services for a health benefit plan to determine if the pharmacy
170	170	143benefits manager is in compliance with this act. The information or data acquired during an
171	171	144examination is:
172	172	145 (a) Considered proprietary and confidential; and
173	173	146 (b) Not subject to the Freedom of Information Act of Massachusetts