Massachusetts Senate Bill S875 Introduced / Bill

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SENATE DOCKET, NO. 2055       FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 875
The Commonwealth of Massachusetts
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PRESENTED BY:
Edward J. Kennedy
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to promote transparency in prescription drug prices.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :Edward J. KennedyFirst Middlesex 1 of 50
SENATE DOCKET, NO. 2055       FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 875
By Mr. Kennedy, a petition (accompanied by bill, Senate, No. 875) of Edward J. Kennedy for 
legislation to promote transparency in prescription drug prices by conducting an affordability 
review of prescription drugs. Health Care Financing.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Fourth General Court
(2025-2026)
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An Act to promote transparency in prescription drug prices.
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. Section 1 of chapter 6D of the General Laws is hereby amended by 
2inserting after the definition of “ACO patient” the following definition:
3 “Affordability Challenge” means situations whereby the Board determines that a) the 
4costs of appropriate utilization of a prescription drug, biologic or biosimilar exceed the 
5therapeutic benefit; or b) the costs of appropriate utilization of the prescription drug, biologic or 
6biosimilar are not sustainable to consumers or to public and private health care systems.
7 SECTION 2. Said section 1 of chapter 6D of the General Laws is hereby amended by 
8inserting after the definition of “Alternative payment methodologies or methods” the following 4 
9definitions: -
10 “Biologic” means a drug that is produced or distributed in accordance with a biologics 
11license application approved under 42 USC § 1395w-3a(c)(6). 2 of 50
12 “Biosimilar”, a drug that is produced or distributed under a biologics license application 
13approved under 42 U.S.C. 262(k)(3).
14 “Board” means the Prescription Drug Affordability Board established under Section 3B.
15 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new 
16drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an 
17application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that 
18is pharmaceutically equivalent, as that term is defined by the United States Food and Drug 
19Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug 
20application that was approved by the United States Secretary of Health and Human Services 
21under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the 
22date of the enactment of the federal Drug Price Competition and Patent Term Restoration 1984, 
23Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 42 C.F.R. 
24447.502; (ii) produced or distributed pursuant to a biologics license application approved under 
2542 U.S.C. 262(a)(2)(C); or (iii) identified by the carrier as a brand name drug based on available 
26data resources such as Medi-Span.
27 SECTION 3. Said section 1 of said chapter 6D is hereby further amended by inserting 
28after the definition of “Disproportionate share hospital” the following definition: -
29 “Early notice”, advanced notification by a pharmaceutical manufacturing company of a: 
30(i) new drug, device or other product coming to market; or (ii) a price increase, as described in 
31subsection (b) of section 15A.
32 SECTION 4. Said section 1 of said chapter 6D is hereby further amended by inserting 
33after the definition of “Employer” the following definition: - 3 of 50
34 “ERISA Plan” means a plan qualified under the Employee Retirement Income Security 
35Act of 1974.
36 SECTION 5. Said section 1 of said chapter 6D is hereby further amended by inserting 
37after the definition of “Non-Acute Hospital” the following 2 definitions: -
38 “Participating ERISA Plan” means an ERISA Plan that has elected to participate in the 
39requirements and restrictions of Section 24 of Chapter 6D.
40 “Pharmacy Wholesale Distributor” means a person engaged in wholesale distribution of 
41prescription drugs or devices including, but not limited to, manufacturers; repackers; own-label 
42distributors; private-label distributors; jobbers; brokers; warehouses, including manufacturers' 
43and distributors' warehouses, chain drug warehouses, and wholesale drug warehouses; 
44independent wholesale drug traders; and retail pharmacies that conduct wholesale distributions.
45 SECTION 6. Said section 1 of said chapter 6D is hereby further amended by striking the 
46definition of “pharmacy benefit managers” and replacing with the following definition: -
47 “Pharmacy benefit manager”, a person, business or other entity, however organized, that 
48directly or through a subsidiary provides pharmacy benefit management services for prescription 
49drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
50insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit 
51management services shall include, but not be limited to: (i) the processing and payment of 
52claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing 
53of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or 
54grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii) 
55drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)  4 of 50
56clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost ofc 
57overed prescription drugs; “provided, however, that “pharmacy benefit manager” shall not 
58include a health benefit plan sponsor that (i) contracts with a pharmacy benefit manager, (ii) 
59manages a subset of pharmacy benefit management functions within its own organization, and 
60(iii) is licensed as a carrier by the division.
61 SECTION 7. Said section 1 of said chapter 6D is hereby further amended by inserting 
62after the definition of “Physician” the following 2 definitions: -
63 “Prescription Drug” means a. as defined under Section 1 of Chapter 94C b. A Biologic as 
64defined in Section 1 of Chapter 6D. A Biosimilar as defined in Section 1 of Chapter 6D 
65 “Pipeline drug”, a prescription drug product containing a new molecular entity for which 
66the sponsor has submitted a new drug application or biologics license application and received an 
67action date from the United States Food and Drug Administration.
68 SECTION 8. Said section 1 of said chapter 6D is hereby further amended by inserting 
69after the definition of “Shared decision making” the following definition: -
70 “State Entity” means any agency of state government that purchases Prescription Drugs 
71on behalf of the state for a person whose health care is paid for by the state, including any agent, 
72vendor, fiscal agent, contractor, or other party acting on behalf of the state.
73 SECTION 9. Said chapter 6D is hereby further amended by striking out section 2A and 
74inserting in place thereof the following section: -
75 Section 2A. The commission shall keep confidential all nonpublic clinical, financial, 
76strategic or operational documents or information provided or reported to the commission in  5 of 50
77connection with any care delivery, quality improvement process, performance improvement 
78plan, early notification or access and affordability improvement plan activities authorized under 
79sections 7, 10, 14, 15, 15A, 20 or 21 of this chapter or under section 2GGGG of chapter 29 and 
80shall not disclose the information or documents to any person without the consent of the entity 
81providing or reporting the information or documents under said sections 7, 10, 14, 15, 15A, 20 or 
8221 of this chapter or under said section 2GGGG of said chapter 29, except in summary form in 
83evaluative reports of such activities or when the commission believes that such disclosure should 
84be made in the public interest after taking into account any privacy, trade secret or 
85anticompetitive considerations. The confidential information and documents shall not be public 
86records and shall be exempt from disclosure under clause Twenty-sixth of section 7 of chapter 4 
87or under chapter 66.
88 SECTION 10. Chapter 6D of the General Laws is further amended by inserting after 
89section 3A the following new section:-
90 Section 3B. Establishment of the Prescription Drug Affordability Board. 
91 a) There is hereby established within the commission’s office for pharmaceutical 
92policy and analysis, a Prescription Drug Affordability Board, hereinafter referred to as the Board. 
93 i. The Board shall be constituted of five members, 1 appointed by the Governor, 1 
94appointed by the President of the Senate; 1 appointed by the Speaker of the House; 1 appointed 
95by the Attorney General for the State of Massachusetts and 1 appointed jointly by the Senate 
96President and the House Speaker to serve as chair of the board. The Board shall include members 
97who have demonstrated expertise in health policy, health care economics, or clinical medicine.  6 of 50
98 ii.Board members shall serve for a term of five years and members may be 
99reappointed for additional terms. 
100 iii.The Commission shall have the authority to hire an Executive Director and staff 
101necessary to conduct the Board’s activity as described in this Act. 
102 iv.The Board shall have the authority to enter into a contract with a third party for 
103any service necessary to carry out the powers and duties of the Board described in sub-sections 
104b) and c) 
105 v. No Board member may be an employee of a board member of, or consultant to a 
106Manufacturer, Pharmacy Benefit Manager, Health Plan, Pharmacy Wholesale Distributor, or 
107related trade association. 
108 vi.Board members, staff members, and contractors providing services on behalf of 
109the Board shall recuse themselves from any Board activity in which they have a conflict of 
110interest. For the purposes of this section, a conflict of interest means an association, including a 
111financial or personal association, that has the potential to bias or appear to bias an individual's 
112decisions in matters related to the Board or the activities of the Board. 
113 vii.The Board may establish advisory groups consisting of relevant stakeholders.
114 viii.The Board, in consultation with the Commission, has the authority to promulgate 
115and adopt rules to allow it to carry out its duties and obligations. 
116 ix.A simple majority of the Board's membership constitutes a quorum for the 
117purpose of conducting business. Decisions of the Board shall be determined by majority vote of 
118members present.  7 of 50
119 x. All meetings of the Board shall be open and public, except that the Board may 
120hold executive sessions to the extent permitted by the Commission. 
121 xi.The Board shall meet at least quarterly and hold its first meeting by July 31, 2026. 
122 b) Identification of Drugs Subject to Review: The Board shall select Prescription 
123Drugs for Affordability Review based on the following criteria: 
124 i. By December 31, 2026, and yearly thereafter, the Board shall identify: 
125 a. Prescription Drugs that: i. have a Wholesale Acquisition Cost of three thousand 
126dollars or more; or ii. have a Wholesale Acquisition Cost increase of three hundred dollars or 
127more in the preceding twelve months; or iii. have a Wholesale Acquisition Cost increase of one 
128hundred percent or more in the preceding twelve months. 
129 b. Biosimilars with an initial Wholesale Acquisition Cost that is not at least fifteen 
130percent below the Wholesale Acquisition Cost of the referenced brand biologic product at the 
131time the biosimilar is launched. 
132 c. Other drugs identified by the Board as posing potential Affordability Challenges. 
133 ii.Prescription Drugs referred to the Board by any advisory group created by the 
134Board; and 
135 iii.Prescription Drugs included in the following reports, which shall be reported 
136annually to the Board from each payor: 
137 a. The fifty prescription drugs most frequently dispensed by pharmacies for claims 
138paid by a payor and the total number of paid claims for each such drug;  8 of 50
139 b. The 50 highest costing prescription drugs by total annual spending accounting for 
140rebates and other price concessions; 
141 c. The 50 prescription drugs with the greatest increase in unit price over the 
142preceding the plan year and for each such drug, the change in amounts expended by the plan or 
143coverage in each such plan year after rebates and other price concessions; 
144 d. The 50 drugs with the highest cost to consumers based on the average out-of-
145pocket cost per utilizer; 
146 e. Any impact on premiums by rebates, fees, and any other remuneration paid by 
147drug manufacturers to the plan or its administrators or service providers, with respect to 
148prescription drugs prescribed to participants or beneficiaries in the plan, including: 
149 i. the amounts paid by manufacturers for each therapeutic class of drugs; and 
150 ii.the amounts paid for each of the 25 drugs that yielded the highest amount of 
151rebates and other remuneration under the plan from drug manufacturers during the plan year; and 
152 f. Any reduction in premiums and out-of-pocket costs associated with rebates, fees, 
153or other remuneration described in subsection (b). 
154 iv.The reports described in subsection (b) shall include the following information for 
155each Prescription Drug: 
156 a. Total annual spending by payor after rebate and other price concessions; 
157 b. Total annual spending by participants, beneficiaries, and enrollees enrolled in the 
158plan or coverage, as applicable;  9 of 50
159 c. The number of participants, beneficiaries, and enrollees, as applicable, with a paid 
160prescription drug claim; 
161 d. Total dosage units dispensed; and 
162 e. The number of paid claims.
163 c) Information to the Board. 
164 i. In performing an affordability review of a prescription drug, the board may 
165consider any documents and information relating to the manufacturer's selection of the 
166introductory price or price increase of the prescription drug, including documents and 
167information relating to life-cycle management; the average cost of the prescription drug; market 
168competition and context; projected revenue; the estimated cost-effectiveness of the prescription 
169drug; off-label usage of the prescription drug; development and manufacturing costs; and 
170information regarding any consumer assistance programs funded by the manufacturer. 
171 ii.To the extent practicable, the Board may access pricing information for 
172prescription drugs through: publicly available pricing information from a state to which 
173manufacturers report pricing information or information acquired through a data-sharing 
174agreement with another state; available pricing information from state entities and data assets 
175that have access to cost and pricing information; pricing information that is available from other 
176countries; and any other sources available to the Board. 
177 d) Affordability Review.  10 of 50
178 i. The Board may conduct an affordability review of any prescription drug 
179identified pursuant to subsection (b). The purpose of the affordability review is to determine 
180whether the cost of the prescription drug poses an Affordability Challenge. 
181 ii.When conducting a review, the Board may consider any of the following criteria 
182a) the relevant factors contributing to the price paid for the prescription drug, including the 
183Wholesale Acquisition Cost, discounts, rebates, or other price concessions; b) the average patient 
184co-pay or other cost-sharing for the drug; the effect of the price on consumers’ access to the drug 
185in the state; c) whether the cost of the drug contributes to inequities in the availability of health 
186care to underserved communities in the state; d) the dollar value and accessibility of patient 
187assistance programs offered by the manufacturer for the drug; e) the price and availability of 
188therapeutic alternatives; f) input from patients affected by the condition or disease treated by the 
189drug and individuals with medical or scientific expertise related to the condition or disease 
190treated by the drug; g) the average cost of the drug in the state; h) market competition; i) 
191projected manufacturer revenue, if available; j) off-label usage of the drug; and k) any other 
192relevant factors as determined by the Board. 
193 iii.Before commencing a review, the Board shall publish which drugs are subject to 
194an affordability review and shall notify in writing the manufacturer of any Prescription Drug 
195subject to review. 
196 iv.At the conclusion of its affordability review, the Board shall determine whether 
197the cost of a reviewed prescription drug presents an affordability challenge. 
198 e) Upper Payment Limits.  11 of 50
199 i. Prior to setting any upper payment limits, the Board shall establish by rule a 
200methodology for setting upper payment limits. 
201 ii.The Board may set an upper payment limit for each prescription drug for which it 
202determines there is an affordability challenge. 
203 iii.The methodology may take into consideration: a) the cost of administering the 
204prescription drug; b) the cost of delivering the Prescription Drug to patients; c) the status of the 
205prescription drug on the drug shortage list published by the United States Food and Drug 
206Administration; d) the differential in price between the price of the drug in the commonwealth, 
207nationally, and the price of the drug in other countries; e) other relevant administrative costs 
208related to the production and delivery of the prescription drug; and f) other relevant criteria the 
209Board, accounting for any stakeholder input, determines is necessary. 
210 iv.The methodology determined by the Board shall consider whether an upper 
211payment limit may help alleviate health disparities and inequitable outcomes for (a) underserved 
212communities, (b) people with disabilities, (c) older adults, or (d) any other socially, 
213economically, or environmentally disadvantaged group. 
214 v. An upper payment limit for a Prescription Drug established by the Board applies 
215to all purchases of the Prescription Drug and reimbursements for a claim for the drug when the 
216Prescription Drug is dispensed or administered to an individual in the state in person, by mail, or 
217by other means. An upper payment limit does not include a pharmacy dispensing fee and nothing 
218in this Chapter shall be interpreted to prevent a retail pharmacy from receiving a payment that 
219includes a dispensing fee above the upper payment limit.  12 of 50
220 vi.A health plan governed by the Employee Retirement Income Security Act may 
221elect to be subject to the upper payment limits as established by the Board. 
222 vii.The Board shall publish a list of Prescription Drugs for which it has set an upper 
223payment limit. 
224 viii.Unless the Board prescribes a specific effective date, upper payment limits 
225established by the Board shall become effective six months after the adoption of the upper 
226payment limit and apply only to purchases, contracts, and plans that are issued on or renewed 
227after the effective date. 
228 f) Any savings generated by a payor that are attributable to the implementation of an 
229upper payment limit established by the Board shall be used to reduce costs to consumers. No 
230later than April 1 of each calendar year, each payor shall submit to the Board a report describing 
231the savings achieved as a result of implementing upper payment limits and how those savings 
232were used to reduce costs to consumers. 
233 g) No manufacturer shall withdraw the sale or distribution of a prescription drug 
234within the commonwealth, a prescription drug for which the Board has established an upper 
235payment limit. 
236 h) The Board shall assess a penalty not to exceed five hundred thousand dollars if 
237the Board finds that a manufacturer withdrew the sale or distribution of a prescription drug 
238within the commonwealth, a prescription drug for which the Board has established an upper 
239payment limit 13 of 50
240 i) On or before December 1 of each year, the Board shall submit a report to the 
241governor and the joint committees on health care financing summarizing the activities of the 
242Board during the preceding calendar year. The report shall include, but is not limited to, the 
243following: 
244 i. Publicly available data concerning price trends for prescription drugs; 
245 ii.A list of the prescription drugs that were subjected to an affordability review by 
246the Board pursuant to section, including the results of each affordability review; 
247 iii.A list of each prescription drug for which the Board established an upper payment 
248limit pursuant to subsection (e ), including the amount of the upper payment limit;
249 iv.With respect to each drug for which the Board conducted an affordability review 
250how the Board determined whether the cost of the drug contributes to inequities in the 
251availability of health care to communities of color or other underserved communities in the state; 
252 v. With respect to each drug for which the Board set an upper payment limit how the 
253Board assessed the impact to communities of color, people with disabilities, and older adults; 
254 vi.The known impact of any upper payment limits established by the Board pursuant 
255to sub-section (e) on health care providers, pharmacies, and patients’ ability to access any 
256prescription drugs for which the Board has established upper payment limits; 
257 vii.Any recommendations the Board may have for legislative and regulatory policy 
258changes to increase the affordability of prescription drugs and reduce the effects of costs on 
259consumers and the health care systems in the state.  14 of 50
260 SECTION 11. Said chapter 6D is hereby further amended by striking out section 6, most 
261recently amended by section 5 of Senate Bill 3012, and inserting in place thereof the following 
262section:
263 Section 6. (a) For the purposes of this section, “non-hospital provider organization” shall 
264mean a provider organization required to register under section 11 that is: (i) a non-hospital 
265based physician practice with not less than $500,000,000 in annual gross patient service revenue; 
266(ii) a clinical laboratory; (iii) an imaging facility; or (iv) a network of affiliated urgent care 
267centers. 
268 (b) Each acute hospital, ambulatory surgical center, non-hospital provider organization, 
269pharmaceutical manufacturing company and pharmacy benefit manager shall pay to the 
270commonwealth an amount for the estimated expenses of the commission
271 (c) The assessed amount for acute hospitals, ambulatory surgical centers and non-hospital 
272provider organizations shall be 25 percent of the amount appropriated by the general court for 
273the expenses of the commission minus amounts collected from: (i) filing fees; (ii) fees and 
274charges generated by the commission; and (iii) federal matching revenues received for these 
275expenses or received retroactively for expenses of predecessor agencies; provided, however, that, 
276to the maximum extent permissible under federal law, non hospital provider organizations shall 
277be assessed not less than 3 per cent nor more than 8 per cent of the total assessed amount for 
278acute hospitals, ambulatory surgical centers and non-hospital provider organizations. Each acute 
279hospital, ambulatory surgical center and non-hospital provider organization shall pay such 
280assessed amount multiplied by the ratio of the acute hospital’s, ambulatory surgical center’s or 
281non-hospital provider organization’s gross patient service revenues to the total gross patient  15 of 50
282service revenues of all such hospitals, ambulatory surgical centers and non-hospital provider 
283organizations. Each acute hospital, ambulatory surgical center and non-hospital provider 
284organization shall make a preliminary payment to the commission on October 1 of each year in 
285an amount equal to 1/2 of the previous year’s total assessment. Thereafter, each acute hospital, 
286ambulatory surgical center and non-hospital provider organization shall pay, within 30 days’ 
287notice from the commission, the balance of the total assessment for the current year based upon 
288its most current projected gross patient service revenue. The commission shall subsequently 
289adjust the assessment for any variation in actual and estimated expenses of the commission and 
290for changes in acute hospital, ambulatory surgical center and non-hospital provider organization 
291gross patient service revenue. Such estimated and actual expenses shall include an amount equal 
292to the cost of fringe benefits and indirect expenses, as established by the comptroller under 
293section 5D of chapter 29. In the event of late payment by any such acute hospital, ambulatory 
294surgical center or non-hospital provider organization, the treasurer shall advance the amount of 
295due and unpaid funds to the commission prior to the receipt of such monies in anticipation of 
296such revenues up to the amount authorized in the then current budget attributable to such 
297assessments and the commission shall reimburse the treasurer for such advances upon receipt of 
298such revenues. This section shall not apply to any state institution or to any acute hospital which 
299is operated by a city or town.
300 (d) To the maximum extent permissible under federal law, and provided that such 
301assessment will not result in any reduction of federal financial participation in Medicaid, the 
302assessed amount for pharmaceutical manufacturing companies shall be 25 per cent of the amount 
303appropriated by the general court for the expenses of the commission minus amounts collected 
304from: (i) filing fees; (ii) fees and charges generated by the commission; and (iii) federal matching  16 of 50
305revenues received for these expenses or received retroactively for expenses of predecessor 
306agencies. Each pharmaceutical manufacturing company shall pay such assessed amount 
307multiplied by the ratio of MassHealth’s net spending for the manufacturer’s prescription drugs 
308used in the MassHealth rebate program to MassHealth’s total pharmacy spending.
309 (e) To the maximum extent permissible under federal law, and provided that such 
310assessment will not result in any reduction of federal financial participation in Medicaid, the 
311assessed amount for pharmacy benefit managers shall be 25 per cent of the amount appropriated 
312by the general court for the expenses of the commission minus amounts collected from: (i) filing 
313fees; (ii) fees and charges generated by the commission; and (iii) federal matching revenues 
314received for these expenses or received retroactively for expenses of predecessor agencies. Each 
315pharmacy benefit manager 	shall pay such assessed amount multiplied by the ratio of the claims 
316paid by the pharmacy benefit manager attributed to residents of the commonwealth for whom it 
317manages pharmaceutical benefits on behalf of carriers to the total of all such claims paid by all 
318pharmacy benefit managers attributed to residents of the commonwealth for whom they manage 
319pharmaceutical benefits on behalf of carriers.
320 (f) Each pharmaceutical manufacturing company and each pharmacy benefit manager 
321shall make a preliminary payment to the commission annually on October 1 in an amount equal 
322to 1/2 of the previous year's total assessment. Thereafter, each pharmaceutical manufacturing 
323company and each pharmacy benefit manager shall pay, within 30 days of receiving notice from 
324the commission, the balance of the total assessment for the current year as determined by the 
325commission. 17 of 50
326 SECTION 12. Said section 8 of said chapter 6D, as so appearing, is hereby further 
327amended by inserting after the word “commission”, in line 60, the first time it appears, the 
328following words:- ; and (iii) in the case of pharmacy benefit managers and pharmaceutical 
329manufacturing companies, testimony concerning factors underlying prescription drug costs and 
330price changes including, but not limited to, the initial prices of drugs coming to market and 
331subsequent price changes, changes in industry profit levels, marketing expenses, reverse payment 
332patent settlements, the impact of manufacturer rebates, discounts and other price concessions on 
333net pricing, the availability of alternative drugs or treatments, corporate ownership organizational 
334structure and any other matters as determined by the commission.
335 SECTION 13. Subsection (g) of said section 8 of said chapter 6D, as so appearing, is 
336hereby amended by striking out the second sentence and inserting in place thereof the following 
3372 sentences: - The report shall be based on the commission’s analysis of information provided at 
338the hearings by witnesses, providers, provider organizations, payers, pharmaceutical 
339manufacturing companies and pharmacy benefit managers, registration data collected under 
340section 11, data collected or analyzed by the center under sections 8, 9, 10,10A and 10B of 
341chapter 12C and any other available information that the commission considers necessary to 
342fulfill its duties under this section as defined in regulations promulgated by the commission. To 
343the extent practicable, the report shall not contain any data that is likely to compromise the 
344financial, competitive or proprietary nature of the information.
345 SECTION 14. Said chapter 6D is hereby further amended by inserting after section 15 
346the following section:- 18 of 50
347 Section 15A. (a) A pharmaceutical manufacturing company shall provide early notice to 
348the commission in a manner described in this section for a: (i) pipeline drug; (ii) generic drug; or 
349(iii) biosimilar drug. The commission shall provide nonconfidential information received under 
350this section to the office of Medicaid, the division of insurance and the group insurance 
351commission.
352 Early notice under this subsection shall be submitted to the commission in writing not 
353later than 30 days after receipt of the United States Food and Drug Administration approval date.
354 For each pipeline drug, early notice shall include a brief description of the: (i) primary 
355disease, health condition or therapeutic area being studied and the indication; (ii) route of 
356administration being studied; (iii) clinical trial comparators; and (iv) estimated date of market 
357entry. To the extent possible, information shall be collected using data fields consistent with 
358those used by the federal National Institutes of Health for clinical trials.
359 For each pipeline drug, early notice shall include whether the drug has been designated 
360by the United States Food and Drug Administration: (i) as an orphan drug; (ii) for fast track; (iii) 
361as a breakthrough therapy; (iv) for accelerated approval; or (v) for priority review for a new 
362molecular entity; provided, however, that notwithstanding clause (v), submissions for drugs in 
363development that are designated as new molecular entities by the United States Food and Drug 
364Administration shall be provided as soon as practical upon receipt of the relevant designations.
365 For each generic drug, early notice shall include a copy of the drug label approved by the 
366United States Food and Drug Administration.
367 (b) A pharmaceutical manufacturing company shall provide early notice to the 
368commission if it plans to increase the wholesale acquisition cost of a: (i) brand-name drug by  19 of 50
369more than 15 per cent per wholesale acquisition cost unit during any 12-month period; or (ii) 
370generic drug or biosimilar drug with a significant price increase as determined by the 
371commission during any 12-month period. The commission shall provide non-confidential 
372information received under this section to the office of Medicaid, the division of insurance and 
373the group insurance commission.
374 Early notice under this subsection shall be submitted to the commission in writing not 
375less than 60 days before the planned effective date of the increase.
376 A pharmaceutical manufacturing company required to notify the commission of a price 
377increase under this subsection shall, not less than 30 days before the planned effective date of the 
378increase, report to the commission any information regarding the price increase that is relevant to 
379the commission including, but not limited to: (i) drug identification information; (ii) drug sales 
380volume information; (iii) wholesale price and related information for the drug; (iv) net price and 
381related information for the drug; (v) drug acquisition information, if applicable; (vi) revenue 
382from the sale of the drug; and (vii) manufacturer costs.
383 (c) The commission shall conduct an annual study of pharmaceutical manufacturing 
384companies subject to the requirements in subsections (a) and (b). The commission may contract 
385with a third-party entity to implement this section.
386 (d) If a pharmaceutical manufacturing company fails to timely comply with the 
387requirements under subsection (a) or subsection (b), or otherwise knowingly obstructs the 
388commission’s ability to receive early notice under this section, including, but not limited to, 
389providing incomplete, false or misleading information, the commission may impose appropriate 
390sanctions against the manufacturer, including reasonable monetary penalties not to exceed  20 of 50
391$500,000, in each instance. The commission shall seek to promote compliance with this section 
392and shall only impose a civil penalty on the manufacturer as a last resort. Penalties collected 
393under this section shall be deposited into the Health Safety Net Trust Fund.
394 SECTION 15. Said chapter 6D is hereby further amended by adding the following 2 
395sections: -
396 Section 24. (a) As used in this section, the following words shall have the following 
397meanings unless the context clearly requires otherwise:
398 “Eligible drug”, (i) a brand name drug or biologic, not including a biosimilar, that has a 
399launch wholesale acquisition cost of $50,000 or more for a 1-year supply or full course of 
400treatment; (ii) a biosimilar drug that has a launch wholesale acquisition cost that is not at least 15 
401per cent lower than the referenced brand biologic at the time the biosimilar is launched; (iii) a 
402public health essential drug, as defined in subsection (f) of section 13 of chapter 17, with a 
403significant price increase over a defined period of time as determined by the commission by 
404regulation or with a wholesale acquisition cost of $25,000 or more for a 1-year supply or full 
405course of treatment; (iv) all drugs, continuous glucose monitoring system components, all 
406components of the continuous glucose monitoring system of which the component is a part and, 
407when applicable, delivery devices selected pursuant to section 17T of chapter 32A, section 10R 
408199 of chapter 118E, section 47UU of chapter 175, section 8VV of chapter 176A, section 4VV 
409of chapter 176B and section 4NN of chapter 176G; or (v) other prescription drug products that 
410may have a direct and significant impact and create affordability challenges for the state’s health 
411care system and patients, as determined by the commission; provided, however, that the 
412commission shall promulgate regulations to establish the type of prescription drug products  21 of 50
413classified under clause (v) prior to classification of any such prescription drug product under said 
414clause (v).
415 “Manufacturer”, a pharmaceutical manufacturer of an eligible drug, or, when applicable, 
416the manufacturer of a delivery device selected pursuant to section 17T of chapter 32A, section 
41710R of chapter 118E, section 47UU of chapter 175, section 8VV of chapter 176A, section 4VV 
418of chapter 176B and section 4NN of chapter 176G.
419 “Public health essential drug”, shall have the same meaning as defined in subsection (f) 
420of section 13 of chapter 17.
421 (b) The commission shall review the impact of eligible drug costs on patient access; 
422provided, however, that the commission may prioritize the review of eligible drugs based on 
423potential impact to consumers and shall refer these eligible drugs to the Board established under 
424the commission’s office or pharmaceutical policy and analysis to consider for affordability 
425review.
426 In conducting a review of eligible drugs, the commission may request information 
427relating to the pricing of an eligible drug from the manufacturer of said eligible drug. Upon 
428receiving a request for information from the commission, a manufacturer shall disclose to the 
429commission, within a reasonable time period, as determined by the commission, applicable 
430information relating to the manufacturer’s pricing of an eligible drug.
431 The disclosed information shall be on a standard reporting form developed by the 
432commission with the input of the manufacturers and shall include, but not be limited to: (i) a 
433schedule of the drug’s wholesale acquisition cost increases over the previous 5 calendar years; 
434(ii) the total amount of federal and state tax credits, incentives, grants and other subsidies  22 of 50
435provided to the manufacturer over the previous 10 calendar years that have been used to assist in 
436the research and development of eligible drugs; (iii) the manufacturer’s aggregate, company-
437level research and development and other relevant capital expenditures, including facility 
438construction, for the most recent year for which final audited data are available; (iv) a narrative 
439description, absent proprietary information and written in plain language, of factors that 
440contributed to reported changes in wholesale acquisition cost during the previous 5 calendar 
441years; and (v) any other information that the manufacturer wishes to provide to the commission 
442or that the commission requests.
443 (c) Based on the records provided under subsection (b) and available information from 
444the center for health information and analysis or an outside third party, the commission shall 
445identify a proposed value for the eligible drug. The commission may request additional relevant 
446information that it deems necessary from the manufacturer and from other entities, including, but 
447not limited to, pharmacy benefit managers.
448 Any information, analyses or reports regarding an eligible drug review shall be provided 
449to the manufacturer. The commission shall consider any clarifications or data provided by the 
450manufacturer with respect to the eligible drug. The commission shall not base its determination 
451on the proposed value of the eligible drug solely on the analysis or research of an outside third 
452party and shall not employ a measure or metric that assigns a reduced value to the life extension 
453provided by a treatment based on a pre-existing disability or chronic health condition of the 
454individuals whom the treatment would benefit. If the commission relies upon a third party to 
455provide cost-effectiveness analysis or research related to the proposed value of the eligible drug, 
456such analysis or research shall also include, but not be limited to: (i) a description of the 
457methodologies and models used in its analysis; (ii) any assumptions and potential limitations of  23 of 50
458research findings in the context of the results; and (iii) outcomes for affected subpopulations that 
459utilize the drug, including, but not limited to, potential impacts on individuals of marginalized 
460racial or ethnic groups and on individuals with specific disabilities or health conditions who 
461regularly utilize the eligible drug.
462 (d) If, after review of an eligible drug and after receiving information from the 
463manufacturer under subsection (b) or subsection (e), the commission determines that the 
464manufacturer’s pricing of the eligible drug does not substantially exceed the proposed value of 
465the drug, the commission shall notify the manufacturer, in writing, of its determination and shall 
466evaluate other ways to mitigate the eligible drug’s cost in order to improve patient access to the 
467eligible drug. The commission may engage with the manufacturer and other relevant 
468stakeholders, including, but not limited to, patients, patient advocacy organizations, consumer 
469advocacy organizations, providers, provider organizations and payers, to explore options for 
470mitigating the cost of the eligible drug. Upon the conclusion of a stakeholder engagement 
471process under this subsection, the commission shall issue recommendations on ways to reduce 
472the cost of the eligible drug for the purpose of improving patient access to the eligible drug.
473 Recommendations may include but shall not be limited to: (i) an alternative payment plan 
474or methodology; (ii) a bulk purchasing program; (iii) co-payment, deductible, co-insurance or 
475other cost-sharing restrictions; and (iv) a reinsurance program to subsidize the cost of the eligible 
476drug.
477 The recommendations shall be publicly posted on the commission’s website and provided 
478to the clerks of the house of representatives and senate, the joint committee on health care  24 of 50
479financing and the house and senate committees on ways and means; provided, however, that the 
480report shall be published on the website of the commission.
481 (e) If, after review of an eligible drug, the commission determines that the manufacturer’s 
482pricing of the eligible drug substantially exceeds the proposed value of the drug, the commission 
483shall request that the manufacturer provide further information related to the pricing of the 
484eligible drug and the manufacturer’s reasons for the pricing not later than 30 days after receiving 
485the request.
486 (f) Not later than 60 days after receiving information from the manufacturer under 
487subsection (b) or subsection (e), the commission shall confidentially issue a determination on 
488whether the manufacturer’s pricing of an eligible drug substantially exceeds the commission’s 
489proposed value of the drug. If the commission determines that the manufacturer’s pricing of an 
490eligible drug substantially exceeds the proposed value of the drug, the commission shall 
491confidentially notify the manufacturer, in writing, of its determination and may require the 
492manufacturer to enter into an access and affordability improvement plan under section 24.
493 (g) Records disclosed by a manufacturer under this section shall: (i) be accompanied by 
494an attestation that all information provided is true and correct; (ii) not be public records under 
495clause Twenty-sixth of section 7 of chapter 4 or under chapter 66; and (iii) remain confidential; 
496provided, however, that the commission may produce reports summarizing any findings; 
497provided further, that any such report shall not be in a form that identifies specific prices charged 
498for or rebate amounts associated with drugs by a manufacturer or in a manner that is likely to 
499compromise the financial, competitive or proprietary nature of the information. 25 of 50
500 Any request for further information made by the commission under subsection (e) or any 
501determination issued, or written notification made by the commission under subsection (f) shall 
502not be public records under said clause Twenty-sixth of said section 7 of said chapter 4 or under 
503said chapter 66.
504 (h) The commission’s proposed value of an eligible drug and the commission’s 
505underlying analysis of the eligible drug is not intended to be used to determine whether any 
506individual patient meets prior authorization or utilization management criteria for the eligible 
507drug. The proposed value and underlying analysis shall not be the sole factor in determining 
508whether a drug is included in a formulary or whether the drug is subject to step therapy.
509 (i) If the manufacturer fails to timely comply with the commission’s request for records 
510under subsection (b) or subsection (e), or otherwise knowingly obstructs the commission’s 
511ability to issue its determination under subsection (f), including, but not limited to, by providing 
512incomplete, false or misleading information, the commission may impose appropriate sanctions 
513against the manufacturer, including reasonable monetary penalties not to exceed $500,000, in 
514each instance. The commission shall seek to promote compliance with this section and shall only 
515impose a civil penalty on the manufacturer as a last resort. Penalties collected under this section 
516shall be deposited into the Health Safety Net Trust Fund.
517 (j) The commission shall adopt any written policies, procedures or regulations that the 
518commission determines are necessary to effectuate the purpose of this section.
519 Section 25. (a) The commission shall establish procedures to assist manufacturers in 
520filing and implementing an access and affordability improvement plan. 26 of 50
521 Upon providing written notice provided under subsection (f) of section 21, the 
522commission may require that a manufacturer whose pricing of an eligible drug substantially 
523exceeds the commission’s proposed value of the drug file an access and affordability 
524improvement plan with the commission. Not later than 45 days after receipt of a notice under 
525said subsection (f) of said section 21, a manufacturer shall: (i) file an access and affordability 
526improvement plan; or (ii) provide written notice declining participation in the access and 
527affordability improvement plan.
528 (b) An access and affordability improvement plan shall: (i) be generated by the 
529manufacturer; (ii) identify the reasons for the manufacturer’s drug price; and (iii) include, but not 
530be limited to, specific strategies, adjustments and action steps the manufacturer proposes to 
531implement to address the cost of the eligible drug in order to improve the accessibility and 
532affordability of the eligible drug for patients and the state’s health system. The proposed access 
533and affordability improvement plan shall include specific identifiable and measurable expected 
534outcomes and a timetable for implementation. The timetable for an access and affordability 
535improvement plan shall not exceed 18 months.
536 (c) The commission shall approve any access and affordability improvement plan that it 
537determines: (i) is reasonably likely to address the cost of an eligible drug in order to substantially 
538improve the accessibility and affordability of the eligible drug for patients and the state’s health 
539system; and (ii) has a reasonable expectation for successful implementation.
540 (d) If the commission determines that the proposed access and affordability improvement 
541plan is unacceptable or incomplete, the commission may provide consultation on the criteria that 
542have not been met and may allow an additional time period of not more than 30 calendar days for  27 of 50
543resubmission; provided, however, that all aspects of the access plan shall be proposed by the 
544manufacturer and the commission shall not require specific elements for approval.
545 (e) Upon approval of the proposed access and 	affordability improvement plan, the 
546commission shall notify the manufacturer to begin immediate implementation of the access and 
547affordability improvement plan. Public notice shall be provided by the commission on its 
548website, identifying that the manufacturer is implementing an access and affordability 
549improvement plan; provided, however, that upon the successful completion of the access and 
550affordability improvement plan, the identity of the manufacturer shall be removed from the 
551commission's website. All manufacturers implementing an approved access improvement plan 
552shall be subject to additional reporting requirements and compliance monitoring as determined 
553by the commission. The commission shall provide assistance to the manufacturer in the 
554successful implementation of the access and affordability improvement plan.
555 (f) All manufacturers shall work in good faith to implement the access and affordability 
556improvement plan. At any point during the implementation of the access and affordability 
557improvement plan, the manufacturer may file amendments to the access improvement plan, 
558subject to approval of the commission.
559 (g) At the conclusion of the timetable established in the access and affordability 
560improvement plan, the manufacturer shall report to the commission regarding the outcome of the 
561access and affordability improvement plan. If the commission determines that the access and 
562affordability improvement plan was unsuccessful, the commission shall: (i) extend the 
563implementation timetable of the existing access and affordability improvement plan; (ii) approve 
564amendments to the access and affordability improvement plan as proposed by the manufacturer;  28 of 50
565(iii) require the manufacturer to submit a new access and affordability improvement plan; or (iv) 
566waive or delay the requirement to file any additional access and affordability improvement plans.
567 (h) The commission shall submit a recommendation for proposed legislation to the joint 
568committee on health care financing if the commission determines that further legislative 
569authority is needed to assist manufacturers with the implementation of access and affordability 
570improvement plans or to otherwise ensure compliance with this section.
571 (i) An access and affordability improvement plan under this section shall remain 
572confidential in accordance with section 2A.
573 (j) The commission may assess a civil penalty to a manufacturer of not more than 
574$500,000, in each instance, if the commission determines that the manufacturer: (i) declined or 
575willfully neglected to file an access and affordability improvement plan with the commission 
576under subsection (a); (ii) failed to file an acceptable access and affordability improvement plan in 
577good faith with the commission; (iii) failed to implement the access and affordability 
578improvement plan in good faith; or (iv) knowingly failed to provide information required by this 
579section to the commission or knowingly falsified the information. The commission shall seek to 
580promote compliance with this section and shall only impose a civil penalty as a last resort
581 Amounts collected under this section shall be deposited into the Health Safety Net Trust 
582Fund.
583 (k) If a manufacturer declines to enter into an access and affordability improvement plan 
584under this section, the commission may publicly post 	the proposed value of the eligible drug, 
585hold a public hearing on the proposed value of the eligible drug and solicit public comment. The 
586manufacturer shall appear and testify at the public hearing held on the eligible drug’s proposed  29 of 50
587value. Upon the conclusion of a public hearing under this subsection, the commission shall issue 
588recommendations on ways to reduce the cost of an eligible drug for the purpose of improving 
589patient access to the eligible drug. The recommendations shall be publicly posted on the 
590commission’s website and provided to the clerks of the house of representatives and senate, the 
591joint committee on health care financing and the house and senate committees on ways and 
592means.
593 If a manufacturer is deemed to not be acting in good faith to develop an acceptable or 
594complete access and affordability improvement plan, the commission may publicly post the 
595proposed value of the eligible drug, hold a public hearing on the proposed value of the eligible 
596drug and solicit public comment. The manufacturer shall appear and testify at any hearing held 
597on the eligible drug’s proposed value. Upon the conclusion of a public hearing under this 
598subsection, the commission shall issue recommendations on ways to reduce the cost of an 
599eligible drug for the purpose of improving patient access to the eligible drug. The 
600recommendations shall be publicly posted on the commission’s website and provided to the 
601clerks of the house of representatives and senate, the joint committee on health care financing 
602and the house and senate committees on ways and means.
603 Before making a determination that the manufacturer is not acting in good faith, the 
604commission shall send a written notice to the manufacturer that the commission shall deem the 
605manufacturer to not be acting in good faith if the manufacturer does not submit an acceptable 
606access and affordability improvement plan within 30 days of receipt of notice; provided, 
607however, that the commission shall not send a notice under this paragraph within 120 calendar 
608days from the date that the commission notified the manufacturer of its requirement to enter into 
609the access and affordability improvement plan. 30 of 50
610 (l) The commission shall promulgate regulations necessary to implement this section.
611 SECTION 16. Section 1 of chapter 12C of the General Laws, as appearing in the 2022 
612Official Edition, is hereby amended by inserting after the definition of “Ambulatory surgical 
613center services” the following 3 definitions:-
614 “Average manufacturer price”, the average price paid to a manufacturer for a drug in the 
615commonwealth by a: (i) wholesaler for drugs distributed to pharmacies; and (ii) pharmacy that 
616purchases drugs directly from the manufacturer.
617 “Biosimilar”, a drug that is produced or distributed pursuant to a biologics license 
618application approved under 42 U.S.C. 262(k)(3).
619 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new 
620drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an 
621application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that  
622is pharmaceutically equivalent, as that term is defined by the United States Food and Drug 
623Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug 
624application that was approved by the United States Secretary of Health and Human Services 
625under section 505(c) of the federal Food, Drug and Cosmetic Act, 21 U.S.C. 355(c), before the 
626date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of 
6271984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 42 
628C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved 
629under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the carrier as a brand name drug based on 
630available data resources such as Medi-Span. 31 of 50
631 SECTION 17. Said section 1 of said chapter 12C, as so appearing, is hereby further 
632amended by inserting after the definition of “Patient-centered medical home” the following 
633definition: -
634 “Pharmacy benefit manager”, a person, business or other entity, however organized, that, 
635directly or through a subsidiary, provides pharmacy benefit management services for prescription 
636drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
637insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit 
638management services shall include, but not be limited to: (i) the processing and payment of 
639claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing 
640of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or 
641grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii) 
642drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x) 
643clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of 
644covered prescription drugs; “provided, however, that “pharmacy benefit manager” shall not 
645include a health benefit plan sponsor that (i) contracts with a pharmacy benefit manager, (ii) 
646manages a subset of pharmacy benefit management functions within its own organization, and 
647(iii) is licensed as a carrier by the division.
648 SECTION 18. The 	first paragraph of section 7 of said chapter 12C, as so appearing, is 
649hereby amended by adding the following sentence: - Each pharmaceutical and biopharmaceutical 
650manufacturing company and pharmacy benefit manager shall pay to the commonwealth an 
651amount for the estimated expenses of the center and for the other purposes described in this 
652chapter. 32 of 50
653 SECTION 19. Said chapter 12C is hereby further amended by striking out section 7, most 
654recently amended by section 21 of Senate Bill 3012, and inserting in place thereof the following 
655section:
656 Section 6. (a) For the purposes of this section, “non-hospital provider organization” shall 
657mean a provider organization required to register under section 11 that is: (i) a non-hospital-
658based physician practice with not less than $500,000,000 in annual gross patient service revenue; 
659(ii) a clinical laboratory; (iii) an imaging facility; or (iv) a network of affiliated urgent care 
660centers. 
661 (b) Each acute hospital, ambulatory surgical center, non-hospital provider organization, 
662pharmaceutical manufacturing company and pharmacy benefit manager shall pay to the 
663commonwealth an amount for the estimated expenses of the commission
664 (c) The assessed amount for acute hospitals, ambulatory surgical centers and non-hospital 
665provider organizations shall be 25 percent of the amount appropriated by the general court for 
666the expenses of the commission minus amounts collected from: (i) filing fees; (ii) fees and 
667charges generated by the commission; and (iii) federal matching revenues received for these 
668expenses or received retroactively for expenses of predecessor agencies; provided, however, that, 
669to the maximum extent permissible under federal law, non hospital provider organizations shall 
670be assessed not less than 3 per cent nor more than 8 per cent of the total assessed amount for 
671acute hospitals, ambulatory surgical centers and non-hospital provider organizations. Each acute 
672hospital, ambulatory surgical center and non-hospital provider organization shall pay such 
673assessed amount multiplied by the ratio of the acute hospital’s, ambulatory surgical center’s or 
674non-hospital provider organization’s gross patient service revenues to the total gross patient  33 of 50
675service revenues of all such hospitals, ambulatory surgical centers and non-hospital provider 
676organizations. Each acute hospital, ambulatory surgical center and non-hospital provider 
677organization shall make a preliminary payment to the commission on October 1 of each year in 
678an amount equal to 1/2 of the previous year’s total assessment. Thereafter, each acute hospital, 
679ambulatory surgical center and non-hospital provider organization shall pay, within 30 days’ 
680notice from the commission, the balance of the total assessment for the current year based upon 
681its most current projected gross patient service revenue. The commission shall subsequently 
682adjust the assessment for any variation in actual and estimated expenses of the commission and 
683for changes in acute hospital, ambulatory surgical center and non-hospital provider organization 
684gross patient service revenue. Such estimated and actual expenses shall include an amount equal 
685to the cost of fringe benefits and indirect expenses, as established by the comptroller under 
686section 5D of chapter 29. In the event of late payment by any such acute hospital, ambulatory 
687surgical center or non-hospital provider organization, the treasurer shall advance the amount of 
688due and unpaid funds to the commission prior to the receipt of such monies in anticipation of 
689such revenues up to the amount authorized in the then current budget attributable to such 
690assessments and the commission shall reimburse the treasurer for such advances upon receipt of 
691such revenues. This section shall not apply to any state institution or to any acute hospital which 
692is operated by a city or town.
693 (d) To the maximum extent permissible under federal law, and provided that such 
694assessment will not result in any reduction of federal financial participation in Medicaid, the 
695assessed amount for pharmaceutical manufacturing companies shall be 25 per cent of the amount 
696appropriated by the general court for the expenses of the commission minus amounts collected 
697from: (i) filing fees; (ii) fees and charges generated by the commission; and (iii) federal matching  34 of 50
698revenues received for these expenses or received retroactively for expenses of predecessor 
699agencies. Each pharmaceutical manufacturing company shall pay such assessed amount 
700multiplied by the ratio of MassHealth’s net spending for the manufacturer’s prescription drugs 
701used in the MassHealth rebate program to MassHealth’s total pharmacy spending.
702 (e) To the maximum extent permissible under federal law, and provided that such 
703assessment will not result in any reduction of federal financial participation in Medicaid, the 
704assessed amount for pharmacy benefit managers shall be 25 per cent of the amount appropriated 
705by the general court for the expenses of the commission minus amounts collected from: (i) filing 
706fees; (ii) fees and charges generated by the commission; and (iii) federal matching revenues 
707received for these expenses or received retroactively for expenses of predecessor agencies. Each 
708pharmacy benefit manager 	shall pay such assessed amount multiplied by the ratio of the claims 
709paid by the pharmacy benefit manager attributed to residents of the commonwealth for whom it 
710manages pharmaceutical benefits on behalf of carriers to the total of all such claims paid by all 
711pharmacy benefit managers attributed to residents of the commonwealth for whom they manage 
712pharmaceutical benefits on behalf of carriers.
713 (f) Each pharmaceutical manufacturing company and each pharmacy benefit manager 
714shall make a preliminary payment to the commission annually on October 1 in an amount equal 
715to 1/2 of the previous year's total assessment. Thereafter, each pharmaceutical manufacturing 
716company and each pharmacy benefit manager shall pay, within 30 days of receiving notice from 
717the commission, the balance of the total assessment for the current year as determined by the 
718commission. 35 of 50
719 SECTION 20. Said chapter 12C is hereby further amended by striking out section 10A, 
720most recently amended by section 22 of Senate Bill 3012, and inserting in place thereof the 
721following section:
722 Section 10A. (a) The center shall promulgate regulations necessary to ensure the uniform 
723reporting of information from pharmaceutical manufacturing companies to enable the center to 
724analyze: (i) year-over-year changes in wholesale acquisition cost and average manufacturer price 
725or prescription drug products; (ii) year-over-year trends in net expenditures; (iii) net expenditures 
726on subsets of biosimilar, brand name and generic drugs identified by the center; (iv) trends in 
727estimated aggregate drug rebates, discounts or other remuneration paid or provided by a 
728pharmaceutical manufacturing company to a pharmacy benefit manager, wholesaler, distributor, 
729health carrier client, health plan sponsor or pharmacy in connection with utilization of the 
730pharmaceutical drug products offered by the pharmaceutical manufacturing company; (v) 
731discounts provided by a pharmaceutical manufacturing company to a consumer in connection 
732with utilization of the pharmaceutical drug products offered by the pharmaceutical  
733manufacturing company, including any discount, rebate, product voucher, coupon or other 
734reduction in a consumer’s out-of-pocket expenses including co-payments and deductibles under 
735section 3 of chapter 175H; (vi) research and development costs as a percentage of revenue; (vii) 
736annual marketing and advertising costs, identifying costs for direct-to-consumer advertising; 
737(viii) annual profits over the most recent 5-year period; (ix) disparities between prices charged to 
738purchasers in the commonwealth and purchasers outside of the United States; and (x) any other 
739information deemed necessary by the center. The center shall require the submission of available 
740data and other information 	from pharmaceutical manufacturing companies including, but not 
741limited to: (i) wholesale acquisition costs and average manufacturer prices for prescription drug  36 of 50
742products as identified by the center; (ii) true net typical prices charged to pharmacy benefits 
743managers by payor type for prescription drug products identified by the center, net of any rebate 
744or other payments from the manufacturer to the pharmacy benefits manager and from the 
745pharmacy benefits manager to the manufacturer; (iii) aggregate, company-level research and 
746development costs to the extent attributable to a specific product and other relevant capital 
747expenditures for the most recent year for which final audited data is available for prescription 
748drug products as identified by the center; (iv) annual marketing and advertising expenditure; (v) 
749the total amount of federal and state tax credits, incentives, grants and other subsidies provided 
750to the manufacturer over the previous 10 calendar years that have been used to assist in the 
751research and development of eligible drugs; and (vi) a description, absent proprietary 
752information and written in plain language, of factors that contributed to reported changes in 
753wholesale acquisition costs, net prices and average manufacturer prices for prescription drug 
754products as identified by the center.
755 (b) The center shall promulgate regulations necessary to ensure the uniform reporting of
756 information from pharmacy benefit managers to enable the center to analyze: (i) trends in 
757estimated aggregate drug rebates and other drug price reductions, if any, provided by a pharmacy 
758benefit manager to a health carrier client or health plan sponsor or passed through from a 
759pharmacy benefit manager 	to a health carrier client or health plan sponsor in connection with 
760utilization of drugs in the commonwealth offered through the pharmacy benefit manager and a 
761measure of lives covered by each health carrier client or health plan sponsor in the 
762commonwealth; (ii) pharmacy benefit manager practices with regard to drug rebates and other 
763drug price reductions, if any, provided by a pharmacy benefit manager to a health carrier client 
764or health plan sponsor or to consumers in the commonwealth or passed through from a pharmacy  37 of 50
765benefit manager to a health carrier client or health plan sponsor or to consumers in the 
766commonwealth; and (iii) any other information deemed necessary by the center. The center shall 
767require the submission of available data and other information from pharmacy benefit managers 
768including, but not limited to: (i) true net typical prices paid by pharmacy benefits managers for 
769prescription drug products identified by the center, net of any rebate or other payments from the 
770manufacturer to the pharmacy benefit manager and from the pharmacy benefit manager to the 
771manufacturer; (ii) the amount of all rebates that the pharmacy benefit manager received from all 
772pharmaceutical manufacturing companies: (A) for all health carrier clients in the aggregate; (B) 
773for each health carrier client or health plan sponsor individually; and (C) by drug, for 30 of the 
774most utilized drugs in the commonwealth as determined by the center; (iii) the administrative 
775fees that the pharmacy benefit manager received from all health carrier clients or health plan 
776sponsors in the aggregate and for each health carrier client or health plans sponsors individually; 
777(iv) the aggregate amount of rebates a pharmacy benefit manager: (A) retains based on its 
778contractual arrangement with each health plan client or health plan sponsor individually; and (B) 
779passes through to each health care client individually; (v) the aggregate amount of all retained 
780rebates that the pharmacy benefit manager received from all pharmaceutical manufacturing 
781companies and did not pass through to each pharmacy benefit manager’s health carrier client or 
782health plan sponsor individually; (vi) the percentage of contracts that a pharmacy benefit 
783manager holds where the pharmacy benefit manager: (A) retains all rebates; (B) passes all 
784rebates through to the client; and (C) shares rebates with the client; and (vii) other information as 
785determined by the center, including, but not limited to, pharmacy benefit manager practices 
786related to spread pricing, administrative fees, claw backs and formulary placement. 38 of 50
787 (c) Except as specifically provided otherwise by the center or under this chapter, data 
788collected by the center pursuant to this section from pharmaceutical manufacturing companies 
789and pharmacy benefit managers shall not be a public record under clause Twenty-sixth of section 
7907 of chapter 4 or under chapter 66.
791 Section 21. Said chapter 12C is hereby further amended by inserting after section 10A the 
792following section:-
793 Section 10B: 
794 (a) Definitions - For the purposes of this section, 
795 (i) Applicable group purchasing organization. The term “applicable group purchasing 
796organization” means a group purchasing organization (as defined by the Center) that purchases, 
797arranges for, or negotiates 	the purchase of a covered drug, device, biological, or medical supply 
798which is operating in the Massachusetts, or in a territory, possession, or commonwealth of the 
799Massachusetts.
800 (ii) Applicable manufacturer. The term “‘applicable manufacturer” means a manufacturer 
801of a covered drug, device, biological, or medical supply which is operating in the Massachusetts, 
802or in a territory, possession, or commonwealth of the Massachusetts.
803 (iii) Clinical investigation. The term “clinical investigation” means any experiment 
804involving 1 or more human subjects, or materials derived from human subjects, in which a drug 
805or device is administered, dispensed, or used.
806 (iv) Covered device. The term “covered device” means any device for which payment is 
807available under title XVIII or a State plan under title XIX or XXI (or a waiver of such a plan). 39 of 50
808 (v) Covered drug, device, biological, or medical supply. The term “covered drug, device, 
809biological, or medical supply” means any drug, biological product, device, or medical supply for 
810which payment is available under title XVIII or a State plan under title XIX or XXI (or a waiver 
811of such a plan).
812 (vi) Covered recipient. The term “covered recipient” means the following, physician; 
813teaching hospital; physician assistant; nurse practitioner, or clinical nurse specialist; certified 
814registered nurse anesthetist; certified nurse-midwife; and Patient Advocacy Organizations. Such 
815term does not include a physician, physician assistant, nurse practitioner, clinical nurse specialist, 
816certified nurse anesthetist, or certified nurse-midwife who is an employee of the applicable 
817manufacturer that is required to submit information under subsection (b).
818 (vii) Manufacturer of a covered drug, device, biological, or medical supply. The term 
819“manufacturer of a covered drug, device, biological, or medical supply” means any entity which 
820is engaged in the production, preparation, propagation, compounding, or conversion of a covered 
821drug, device, biological, or medical supply (or any entity under common ownership with such 
822entity which provides assistance or support to such entity with respect to the production, 
823preparation, propagation, compounding, conversion, marketing, promotion, sale, or distribution 
824of a covered drug, device, biological, or medical supply).
825 (viii) Payment or other transfer of value. The term “payment or other transfer of value” 
826means a transfer of anything of value. Such term does not include a transfer of anything of value 
827that is made indirectly to a covered recipient through a third party in connection with an activity 
828or service in the case where the applicable manufacturer is unaware of the identity of the covered  40 of 50
829recipient. An applicable manufacturer shall not be required to submit information under 
830subsection (b) with respect to the following:
831 (1) A transfer of anything the value of which is less than $$13.07, unless the aggregate 
832amount transferred to, requested by, or designated on behalf of the covered recipient by the 
833applicable manufacturer during the calendar year exceeds $130.66. For calendar years after 
8342025, the dollar amounts specified in the preceding sentence shall be increased by the same 
835percentage as the percentage increase in the consumer price index for all urban consumers (all 
836items; U.S. city average) for the 12-month period ending with June of the previous year.
837 (2) Product samples that are not intended to be sold and are intended for patient use.
838 (3) Educational materials that directly benefit patients or are intended for patient use.
839 (4) The loan of a covered device for a short-term trial period, not to exceed 90 days, to 
840permit evaluation of the covered device by the covered recipient.
841 (5) Items or services provided under a contractual warranty, including the replacement of 
842a covered device, where the terms of the warranty are set forth in the purchase or lease 
843agreement for the covered 	device.
844 (6) A transfer of anything of value to a covered recipient when the covered recipient is a 
845patient and not acting in the professional capacity of a covered recipient.
846 (7) Discounts (including rebates).
847 (8) In-kind items used for the provision of charity care. 41 of 50
848 (9) A dividend or other profit distribution from, or ownership or investment interest in, a 
849publicly traded security and mutual fund 
850 (10) In the case of an applicable manufacturer who offers a self-insured plan, payments 
851for the provision of health care to employees under the plan.
852 (11) In the case of a covered recipient who is a licensed non-medical professional, a 
853transfer of anything of value to the covered recipient if the transfer is payment solely for the non-
854medical professional services of such licensed non-medical professional.
855 (12) In the case of a covered recipient who is a physician, a transfer of anything of value 
856to the covered recipient if the transfer is payment solely for the services of the covered recipient 
857with respect to a civil or criminal action or an administrative proceeding.
858 (b) Payments or other transfers of value
859 (i) On March 31, 2027 and on the 90th day of each calendar year thereafter, any 
860applicable manufacturer that provides a payment or other transfer of value to a covered recipient 
861(or to an entity or individual at the request of or designated on behalf of a covered recipient), 
862shall submit to the Center, 	in such electronic form as the Center shall require, the following 
863information with respect to the preceding calendar year:
864 (1) The name of the covered recipient.
865 (2) The business address of the covered recipient and, in the case of a covered recipient 
866who is a physician, the specialty and National Provider Identifier of the covered recipient.
867 (3) The amount of the payment or other transfer of value. 42 of 50
868 (4) The dates on which the payment or other transfer of value was provided to the 
869covered recipient.
870 (5) A description of the form of the payment or other transfer of value, indicated (as 
871appropriate for all that apply) as—
872 (I) cash or a cash equivalent;
873 (II) in-kind items or services;
874 (III) stock, a stock option, or any other ownership interest, dividend, profit, or other 
875return on investment; or
876 (IV) any other form of payment or other transfer of value (as defined by the Center).
877 (6) A description of the nature of the payment or other transfer of value, indicated (as 
878appropriate for all that apply) as—
879 (I) consulting fees;
880 (II) compensation for services other than consulting;
881 (III) honoraria;
882 (IV) gift;
883 (V) entertainment;
884 (VI) food;
885 (VII) travel (including the specified destinations); 43 of 50
886 (VIII) education;
887 (IX) research;
888 (X) charitable contribution;
889 (XI) royalty or license;
890 (XII) current or prospective ownership or investment interest;
891 (XIII) direct compensation for serving as faculty or as a speaker for a medical education 
892program;
893 (XIV) grant; or
894 (XV) any other nature of the payment or other transfer of value (as defined by the 
895Center).
896 (7) If the payment or other transfer of value is related to marketing, education, or research 
897specific to a covered drug, device, biological, or medical supply, the name of that covered drug, 
898device, biological, or medical supply.
899 (8) Any other categories of information regarding the payment or other transfer of value 
900the Center determines appropriate.
901 (ii) Special rule for certain payments or other transfers of value. —In the case where an 
902applicable manufacturer provides a payment or other transfer of value to an entity or individual 
903at the request of or designated on behalf of a covered recipient, the applicable manufacturer shall 
904disclose that payment or other transfer of value under the name of the covered recipient. 44 of 50
905 (iii) Physician ownership. On March 31, 2027, and on the 90th day of each calendar year 
906beginning thereafter, any applicable manufacturer or applicable group purchasing organization 
907shall submit to the Center, 	in such electronic form as the Center shall require, the following 
908information regarding any ownership or investment interest held by a physician or an immediate 
909family member of such physician in the applicable manufacturer or applicable group purchasing 
910organization during the preceding year:
911 (1) The dollar amount invested by each physician holding such an ownership or 
912investment interest.
913 (2) The value and terms of each such ownership or investment interest.
914 (3) Any payment or other transfer of value provided to a physician holding such an 
915ownership or investment interest (or to an entity or individual at the request of or designated on 
916behalf of a physician holding such an ownership or investment interest), including the 
917information described in clauses (1) through (8) of paragraph (b(i), except that in applying such 
918clauses, “physician” shall be substituted for “covered 	recipient” each place it appears.
919 (4) Any other information regarding the ownership or investment interest the Center 
920determines appropriate.
921 (c) (i) The Center shall establish procedures for applicable manufacturers and applicable 
922group purchasing organizations to submit information to the Center under subsection (b); and for 
923the Center to make such information submitted available to the public.
924 (ii) Except as provided in subparagraph (e ) the procedures established under 
925subparagraph (c)(i) shall ensure that, not later than September 30, 2027, and on June 30 of each  45 of 50
926calendar year beginning thereafter, the information submitted under subsection (b) with respect 
927to the preceding calendar year is made available to public at CHIA website that
928 (1) is searchable and is in a format that is clear and understandable;
929 (2) contains information that is presented by the name of the applicable manufacturer or 
930applicable group purchasing organization, the name of the covered recipient, the business 
931address of the covered recipient, the specialty of the covered recipient, the value of the payment 
932or other transfer of value, the date on which the payment or other transfer of value was provided 
933to the covered recipient, the form of the payment or other transfer of value, indicated (as 
934appropriate), the nature of the payment or other transfer of value, indicated (as appropriate), and 
935the name of the covered drug, device, biological, or medical supply, as applicable;
936 (3) contains information that is able to be easily aggregated and downloaded;
937 (4) contains a description of any enforcement actions taken to carry out this section.
938 (5) contains background information on industry-physician relationships;
939 (6) in the case of information submitted with respect to a payment or other transfer of 
940value described in subparagraph (e)(i), lists such information separately from the other 
941information submitted under subsection (b) and designates such separately listed information as 
942funding for clinical research;
943 (7) contains any other information the Center determines would be helpful to the average 
944consumer;
945 (8) subject to subparagraph (d), provides the applicable manufacturer, applicable group 
946purchasing organization, or covered recipient an opportunity to review and submit corrections to  46 of 50
947the information submitted with respect to the applicable manufacturer, applicable group 
948purchasing organization, or covered recipient, respectively, for a period of not less than 45 days 
949prior to such information being made available to the 	public.
950 (d) Clarification of time period for review and corrections. In no case may the 45-day 
951period for review and submission of corrections to information under subparagraph (c)(ii)(8) 
952prevent such information from being made available to the public.
953 (e) Delayed publication for payments made pursuant to product research or development 
954agreements and clinical investigations.
955 (i) In general.—In the case of information submitted under subsection (b) with respect to 
956a payment or other transfer of value made to a covered recipient by an applicable manufacturer 
957pursuant to a product research or development agreement for services furnished in connection 
958with research on a potential new medical technology or a new application of an existing medical 
959technology or the development of a new drug, device, biological, or medical supply, or by an 
960applicable manufacturer in connection with a clinical investigation regarding a new drug, device, 
961biological, or medical supply, the procedures established under subparagraph (b)(ii) shall provide 
962that such information is made available to the public on the first date described in the matter 
963preceding clause (i) in subparagraph (C) after the earlier of the following:
964 (I) The date of the approval or clearance of the covered drug, device, biological, or 
965medical supply by the Food and Drug Administration.
966 (II) Four calendar years after the date such payment or other transfer of value was made. 47 of 50
967 (ii) Confidentiality of information prior to publication.—Information described in clause 
968(i) shall be considered confidential and shall not be subject to disclosure under section 552 of 
969title 5, United States Code, or any other similar Federal, State, or local law, until on or after the 
970date on which the information is made available to the public under such clause.
971 (2) Consultation. In establishing the procedures under paragraph (1), the Center shall 
972consult with the Secretary of Executive Office of Health and Human Services, affected industry, 
973consumers, consumer advocates, and other interested parties in order to ensure that the 
974information made available to the public under such paragraph is presented in the appropriate 
975overall context.
976 SECTION 22. Said chapter 12C is hereby further amended by striking out section 11, as 
977appearing in the 2022 Official Edition, and inserting in place thereof the following section: - 
978Section 11. The center shall ensure the timely reporting of information required under sections 8, 
9799, 10,10A and 10B. The center shall notify private health care payers, providers, provider 
980organizations, pharmacy benefit managers, pharmaceutical manufacturing companies and their 
981parent organization and other affiliates of any applicable reporting deadlines. The center shall 
982notify, in writing, a private health care payer, provider, provider organization, pharmacy benefit 
983manager or pharmaceutical manufacturing company and their parent organization and other 
984affiliates, that has failed to meet a reporting deadline of such failure and that failure to respond 
985within 2 weeks of the receipt of the notice shall result in penalties. The center shall assess a 
986penalty against a private health care payer, provider, provider organization, pharmacy benefit 
987manager or pharmaceutical manufacturing company and their parent organization and other 
988affiliates, that fails, without just cause, to provide the requested information, including subsets of 
989the requested information, within 2 weeks following receipt of the written notice required under  48 of 50
990this section, of not more than $2,000 per week for each week of delay after the 2-week period 
991following receipt of the notice. Amounts collected under this section shall be deposited in the 
992Healthcare Payment Reform Fund established in section 100 of chapter 194 of the acts of 2011. 
993The center may promulgate regulations to define “just cause” for the purpose of this section.
994 SECTION 23. Section 12 of said chapter 12C, as so appearing, is hereby amended by 
995striking out, in line 2, the words “and 10” and inserting in place thereof the following words:-, 
99610,10A and 10B.
997 SECTION 24. Subsection (a) of section 16 of said chapter 12C, as so appearing, is hereby 
998amended by striking out the first sentence and inserting in place thereof the following sentence: - 
999The center shall publish an annual report based on the information submitted under: (i) sections 
10008, 9, 10,10A and 10B concerning health care provider, provider organization, private and public 
1001health care payer, pharmaceutical manufacturing company and pharmacy benefit manager costs 
1002and cost and price trends; (ii) section 13 of chapter 6D relative to market power reviews; and (iii) 
1003section 15 of said chapter 6D relative to quality data.
1004 SECTION 25. Said section 16 of said chapter 12C, as so appearing, is hereby further 
1005amended by striking out, in line 18, the words: - “in the aggregate”.
1006 SECTION 26. Said section 16 of said chapter 12C, as so appearing, is hereby further 
1007amended by inserting after the second paragraph the following paragraph:- As part of its annual 
1008report, the center shall report on prescription drug utilization and spending for pharmaceutical 
1009drugs provided in an outpatient setting or sold in a retail setting for private and public health care 
1010payers, including, but not limited to, information sufficient to show the: (i) highest utilization 
1011drugs; (ii) drugs with the greatest increases in utilization; (iii) drugs that are most impactful on  49 of 50
1012plan spending, net of rebates; and (iv) drugs with the 	highest year-over-year price increases, net 
1013of rebates. The report shall not contain any data that is likely to compromise the financial, 
1014competitive or proprietary nature of the information contained in the report. The report shall be 
1015published on the website of the center.
1016 SECTION 27. Prohibition on the Use of Utilization Management Criteria in 
1017Supplemental Rebate Negotiations.
1018 Said Sub-section (b) of section 12A of said chapter 118E, as so appearing, is hereby 
1019further amended by inserting after the second paragraph the following paragraph:- The 
1020executive office of health and human services, managed care entities, pharmacy benefit 
1021managers, and any other entities involved in the administration of MassHealth benefits shall not 
1022condition, require, or utilize any form of utilization management criteria, including but not 
1023limited to prior authorization, step therapy, or quantity limits, as a negotiation tactic or 
1024requirement for the provision of supplemental rebates by manufacturers of prescription drugs. 
1025Negotiations for supplemental rebates shall be conducted in good faith, based solely on 
1026considerations of cost-effectiveness, clinical efficacy, and affordability, without tying such 
1027rebates to the imposition or removal of utilization management criteria. Nothing in this section 
1028shall preclude the application of utilization management criteria based solely on clinical 
1029guidelines or best practices aimed at improving patient outcomes, provided that such criteria are 
1030not used as a condition for supplemental rebate negotiations.
1031 SECTION 28. Prohibition on the Use of Utilization Management Criteria in 
1032Supplemental Rebate Negotiations. 50 of 50
1033 Said sub-section 8 of Section 3 of said chapter 176D as so appearing, is hereby further 
1034amended by inserting after the second paragraph the following paragraph:- The health plans, 
1035pharmacy benefit managers, and any other entities involved in the administration of health and 
1036pharmacy benefits shall not condition, require, or utilize any form of utilization management 
1037criteria, including but not limited to prior authorization, step therapy, or quantity limits, as a 
1038negotiation tactic or requirement for the provision of supplemental rebates by manufacturers of 
1039prescription drugs. Negotiations for supplemental rebates shall be conducted in good faith, based 
1040solely on considerations of cost-effectiveness, clinical efficacy, and affordability, without tying 
1041such rebates to the imposition or removal of utilization management criteria. Nothing in this 
1042section shall preclude the application of utilization management criteria based solely on clinical 
1043guidelines or best practices aimed at improving patient outcomes, provided that such criteria are 
1044not used as a condition for supplemental rebate negotiations.
1045 SECTION 29. Section 27 and 28 shall take effect January 1, 2026, and shall apply to all 
1046contracts and negotiations initiated or renewed on or after such date.