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SENATE DOCKET, NO. 2517 FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 895
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Mark C. Montigny
_________________
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 and prevent price gouging of pharmaceutical drug prices.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :Mark C. MontignySecond Bristol and Plymouth 1 of 16
SENATE DOCKET, NO. 2517 FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 895
By Mr. Montigny, a petition (accompanied by bill, Senate, No. 895) of Mark C. Montigny for
legislation to promote transparency and prevent price gouging of pharmaceutical drug prices.
Health Care Financing.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 783 OF 2023-2024.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Fourth General Court
(2025-2026)
_______________
An Act to promote transparency and prevent price gouging of pharmaceutical 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, as most recently amended by
2chapter 342 of the acts of 2024, is hereby amended by inserting after the definition of
3“Alternative payment methodologies or methods” the following 2 definitions:-
4 “Biosimilar”, a drug that is produced or distributed under a biologics license application
5approved under 42 U.S.C. 262(k)(3).
6 “Brand name drug”, a drug that is: (i) produced or distributed pursuant to an original new
7drug application approved under 21 U.S.C. 355(c) except for: (a) any drug approved through an
8application submitted under section 505(b)(2) of the federal Food, Drug, and Cosmetic Act that
9is pharmaceutically equivalent, as that term is defined by the United States Food and Drug 2 of 16
10Administration, to a drug approved under 21 U.S.C. 355(c); (b) an abbreviated new drug
11application that was approved by the United States Secretary of Health and Human Services
12under section 505(c) of the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(c), before the
13date of the enactment of the federal Drug Price Competition and Patent Term Restoration Act of
141984, Public Law 98-417, 98 Stat. 1585; or (c) an authorized generic drug as defined by 42
15C.F.R. 447.502; (ii) produced or distributed pursuant to a biologics license application approved
16under 42 U.S.C. 262(a)(2)(C); or (iii) identified by the carrier as a brand name drug based on
17available data resources such as Medi-Span.
18 SECTION 2. Said section 1 of chapter 6D is hereby amended by inserting after the
19definition of “Physician” the following definition:-
20 “Pipeline drug”, a prescription drug product containing a new molecular entity for which
21the sponsor has submitted a new drug application or biologics license application and received an
22action date from the United States Food and Drug Administration.
23 SECTION 2. Said chapter 6D is hereby amended by inserting after section 15 the
24following section:-
25 Section 15A. (a) A pharmaceutical manufacturing company shall provide early notice to
26the commission in a manner described in this section for a: (i) pipeline drug; (ii) generic drug; or
27(iii) biosimilar drug. The commission shall provide nonconfidential information received under
28this section to the office of Medicaid, the division of insurance and the group insurance
29commission.
30 Early notice under this subsection shall be submitted to the commission in writing not
31later than 30 days after receipt of the United States Food and Drug Administration approval date. 3 of 16
32 For each pipeline drug, early notice shall include a brief description of the: (i) primary
33disease, health condition or therapeutic area being studied and the indication; (ii) route of
34administration being studied; (iii) clinical trial comparators; and (iv) estimated date of market
35entry. To the extent possible, information shall be collected using data fields consistent with
36those used by the federal National Institutes of Health for clinical trials.
37 For each pipeline drug, early notice shall include whether the drug has been designated
38by the United States Food and Drug Administration: (i) as an orphan drug; (ii) for fast track; (iii)
39as a breakthrough therapy; (iv) for accelerated approval; or (v) for priority review for a new
40molecular entity; provided, however, that notwithstanding clause (v), submissions for drugs in
41development that are designated as new molecular entities by the United States Food and Drug
42Administration shall be provided as soon as practical upon receipt of the relevant designations.
43For each generic drug, early notice shall include a copy of the drug label approved by the United
44States Food and Drug Administration.
45 (b) A pharmaceutical manufacturing company shall provide early notice to the
46commission if it plans to increase the wholesale acquisition cost of a: (i) brand-name drug by
47more than 15 per cent per wholesale acquisition cost unit during any 12-month period; or (ii)
48generic drug or biosimilar drug with a significant price increase as determined by the
49commission during any 12-month period. The commission shall provide non-confidential
50information received under this section to the office of Medicaid, the division of insurance and
51the group insurance commission.
52 Early notice under this subsection shall be submitted to the commission in writing not
53less than 60 days before the planned effective date of the increase. 4 of 16
54 A pharmaceutical manufacturing company required to notify the commission of a price
55increase under this subsection shall, not less than 30 days before the planned effective date of the
56increase, report to the commission any information regarding the price increase that is relevant to
57the commission including, but not limited to: (i) drug identification information; (ii) drug sales
58volume information; (iii) wholesale price and related information for the drug; (iv) net price and
59related information for the drug; (v) drug acquisition information, if applicable; (vi) revenue
60from the sale of the drug; and (vii) manufacturer costs.
61 (c) The commission shall conduct an annual study of pharmaceutical manufacturing
62companies subject to the requirements in subsections (a) and (b). The commission may contract
63with a third-party entity to implement this section.
64 (d) If a pharmaceutical manufacturing company fails to timely comply with the
65requirements under subsection (a) or subsection (b), or otherwise knowingly obstructs the
66commission’s ability to receive early notice under this section, including, but not limited to,
67providing incomplete, false or misleading information, the commission shall impose appropriate
68sanctions against the manufacturer, including reasonable monetary penalties not to exceed
69$1,000,000, in each instance. The commission shall seek to promote compliance with this section
70and shall only impose a civil penalty on the manufacturer as a last resort. Amounts collected
71under this section shall be deposited into the Prescription Drug Cost Assistance Trust Fund
72established in section 2EEEEEE of chapter 29.
73 SECTION 3. Said chapter 6D is hereby further amended by adding the following 2
74sections:- 5 of 16
75 Section 24. (a) As used in this section, the following words shall have the following
76meanings unless the context clearly requires otherwise:
77 “Eligible drug”, (i) a brand name drug or biologic, not including a biosimilar, that has a
78launch wholesale acquisition cost of $50,000 or more for a 1-year supply or full course of
79treatment; (ii) a biosimilar drug that has a launch wholesale acquisition cost that is not at least 15
80per cent lower than the referenced brand biologic at the time the biosimilar is launched; (iii) a
81public health essential drug, as defined in subsection (f) of section 13 of chapter 17, with a
82significant price increase over a defined period of time as determined by the commission by
83regulation or with a wholesale acquisition cost of $25,000 or more for a 1-year supply or full
84course of treatment; (iv) all drugs, continuous glucose monitoring system components, all
85components of the continuous glucose monitoring system of which the component is a part and,
86when applicable, delivery devices selected pursuant to section 17T of chapter 32A, section 10R
87of chapter 118E, section 47UU of chapter 175, section 8VV of chapter 176A, section 4VV of
88chapter 176B and section 4NN of chapter 176G; or (v) other prescription drug products that may
89have a direct and significant impact and create affordability challenges for the state’s health care
90system and patients, as determined by the commission; provided, however, that the commission
91shall promulgate regulations to establish the type of prescription drug products classified under
92clause (v) prior to classification of any such prescription drug product under said clause (v).
93 “Public health essential drug”, shall have the same meaning as defined in subsection (f)
94of section 13 of chapter 17. 6 of 16
95 (b) The commission shall review the impact of eligible drug costs on patient access;
96provided, however, that the commission may prioritize the review of eligible drugs based on
97potential impact to consumers.
98 In conducting a review of eligible drugs, the commission may request information
99relating to the pricing of an eligible drug from the pharmaceutical manufacturing company of
100said eligible drug. Upon receiving a request for information from the commission, a
101pharmaceutical manufacturing company shall disclose to the commission, within a reasonable
102time period, as determined by the commission, applicable information relating to the
103manufacturer’s pricing of an eligible drug.
104 The disclosed information shall be on a standard reporting form developed by the
105commission and shall include, but not be limited to:
106 (i) a schedule of the drug’s wholesale acquisition cost increases over the previous 5
107calendar years;
108 (ii) the total amount of federal and state tax credits, incentives, grants and other subsidies
109provided to the pharmaceutical manufacturing company over the previous 10 calendar years that
110have been used to assist in the research and development of eligible drugs;
111 (iii) the pharmaceutical manufacturing company’s aggregate, company-level research and
112development and other relevant capital expenditures, including facility construction, for the most
113recent year for which final audited data are available; 7 of 16
114 (iv) a narrative description, absent proprietary information and written in plain language,
115of factors that contributed to reported changes in wholesale acquisition cost during the previous 5
116calendar years; and
117 (v) any other information that the pharmaceutical manufacturing company wishes to
118provide to the commission or that the commission requests.
119 (c) Based on the records provided under subsection (b) and available information from
120the center for health information and analysis or an outside third party, the commission shall
121identify a proposed value for the eligible drug. The commission may request additional relevant
122information that it deems necessary from the pharmaceutical manufacturing company and from
123other entities, including, but not limited to, payers and pharmacy benefit managers.
124 Any information, analyses or reports regarding an eligible drug review shall be provided
125to the pharmaceutical manufacturing company. The commission shall consider any clarifications
126or data provided by the pharmaceutical manufacturing company with respect to the eligible drug.
127The commission shall not base its determination on the proposed value of the eligible drug solely
128on the analysis or research of an outside third party and shall not employ a measure or metric that
129assigns a reduced value to the life extension provided by a treatment based on a pre-existing
130disability or chronic health condition of the individuals whom the treatment would benefit. If the
131commission relies upon a third party to provide cost-effectiveness analysis or research related to
132the proposed value of the eligible drug, such analysis or research shall also include, but not be
133limited to: (i) a description of the methodologies and models used in its analysis; (ii) any
134assumptions and potential limitations of research findings in the context of the results; and (iii)
135outcomes for affected subpopulations that utilize the drug, including, but not limited to, potential 8 of 16
136impacts on individuals of marginalized racial or ethnic groups and on individuals with specific
137disabilities or health conditions who regularly utilize the eligible drug.
138 (d) If, after review of an eligible drug and after receiving information from the
139pharmaceutical manufacturing company under subsection (b) or subsection (e), the commission
140determines that the pharmaceutical manufacturing company’s pricing of the eligible drug does
141not substantially exceed the proposed value of the drug, the commission shall notify the
142pharmaceutical manufacturing company, in writing, of its determination and shall evaluate other
143ways to mitigate the eligible drug’s cost in order to improve patient access to the eligible drug.
144The commission may engage with the pharmaceutical manufacturing company and other
145relevant stakeholders, including, but not limited to, patients, patient advocacy organizations,
146consumer advocacy organizations, providers, provider organizations and payers, to explore
147options for mitigating the cost of the eligible drug. Upon the conclusion of a stakeholder
148engagement process under this subsection, the commission shall issue recommendations on ways
149to reduce the cost of the eligible drug for the purpose of improving patient access to the eligible
150drug. Recommendations may include but shall not be limited to: (i) an alternative payment plan
151or methodology; (ii) a bulk purchasing program; (iii) co-payment, deductible, co-insurance or
152other cost-sharing restrictions; and (iv) a reinsurance program to subsidize the cost of the eligible
153drug. The recommendations shall be publicly posted on the commission’s website and provided
154to the clerks of the house of representatives and senate, the joint committee on health care
155financing and the house and senate committees on ways and means; provided, however, that the
156report shall be published on the website of the commission.
157 (e) If, after review of an eligible drug, the commission determines that the pharmaceutical
158manufacturing company’s pricing of the eligible drug substantially exceeds the proposed value 9 of 16
159of the drug, the commission shall request that the pharmaceutical manufacturing company
160provide further information related to the pricing of the eligible drug and the pharmaceutical
161manufacturing company’s reasons for the pricing not later than 30 days after receiving the
162request.
163 (f) Not later than 60 days after receiving information from the pharmaceutical
164manufacturing company under subsection (b) or subsection (e), the commission shall
165confidentially issue a determination on whether the pharmaceutical manufacturing company’s
166pricing of an eligible drug substantially exceeds the commission’s proposed value of the drug. If
167the commission determines that the pharmaceutical manufacturing company’s pricing of an
168eligible drug substantially exceeds the proposed value of the drug, the commission shall
169confidentially notify the manufacturer, in writing, of its determination and may require the
170manufacturer to enter into an access and affordability improvement plan under section 25.
171 (g) Records disclosed by a pharmaceutical manufacturing company under this section
172shall: (i) be accompanied by an attestation that all information provided is true and correct; (ii)
173not be public records under clause Twenty-sixth of section 7 of chapter 4 or under chapter 66;
174and (iii) remain confidential; provided, however, that the commission may produce reports
175summarizing any findings; provided further, that any such report shall not be in a form that
176identifies specific prices charged for or rebate amounts associated with drugs by a manufacturer
177or in a manner that is likely to compromise the financial, competitive or proprietary nature of the
178information.
179 Any request for further information made by the commission under subsection (e) or any
180determination issued or written notification made by the commission under subsection (f) shall 10 of 16
181not be public records under said clause Twenty-sixth of said section 7 of said chapter 4 or under
182said chapter 66.
183 (h) The commission’s proposed value of an eligible drug and the commission’s
184underlying analysis of the eligible drug is not intended to be used to determine whether any
185individual patient meets prior authorization or utilization management criteria for the eligible
186drug. The proposed value and underlying analysis shall not be the sole factor in determining
187whether a drug is included in a formulary or whether the drug is subject to step therapy.
188 (i) If the pharmaceutical manufacturing company fails to timely comply with the
189commission’s request for records under subsection (b) or subsection (e), or otherwise knowingly
190obstructs the commission’s ability to issue its determination under subsection (f), including, but
191not limited to, by providing incomplete, false or misleading information, the commission shall
192impose appropriate sanctions against the pharmaceutical manufacturing company, including
193reasonable monetary penalties not to exceed $1,000,000, in each instance. The commission shall
194seek to promote compliance with this section and shall only impose a civil penalty on the
195manufacturer as a last resort. Penalties collected under this subsection shall be deposited into the
196Prescription Drug Cost Assistance Trust Fund established in section 2EEEEEE of chapter 29.
197 (j) The commission shall adopt any written policies, procedures or regulations that the
198commission determines are necessary to effectuate the purpose of this section.
199 Section 25. (a) The commission shall establish procedures to assist manufacturers in
200filing and implementing an access and affordability improvement plan.
201 Upon providing written notice provided under subsection (f) of section 24, the
202commission may require that a pharmaceutical manufacturing company whose pricing of an 11 of 16
203eligible drug substantially exceeds the commission’s proposed value of the drug file an access
204and affordability improvement plan with the commission. Not later than 45 days after receipt of a
205notice under said subsection (f) of said section 24, a pharmaceutical manufacturing company
206shall: (i) file an access and affordability improvement plan; or (ii) provide written notice
207declining participation in the access and affordability improvement plan.
208 (b) An access and affordability improvement plan shall: (i) be generated by the
209pharmaceutical manufacturing company; (ii) identify the reasons for the pharmaceutical
210manufacturing company’s drug price; and (iii) include, but not be limited to, specific strategies,
211adjustments and action steps the pharmaceutical manufacturing company proposes to implement
212to address the cost of the eligible drug in order to improve the accessibility and affordability of
213the eligible drug for patients and the state’s health system. The proposed access and affordability
214improvement plan shall include specific identifiable and measurable expected outcomes and a
215timetable for implementation. The timetable for an access and affordability improvement plan
216shall not exceed 18 months.
217 (c) The commission shall approve any access and affordability improvement plan that it
218determines: (i) is reasonably likely to address the cost of an eligible drug in order to substantially
219improve the accessibility and affordability of the eligible drug for patients and the state’s health
220system; and (ii) has a reasonable expectation for successful implementation.
221 (d) If the commission determines that the proposed access and affordability improvement
222plan is unacceptable or incomplete, the commission may provide consultation on the criteria that
223have not been met and may allow an additional time period of not more than 30 calendar days for
224resubmission; provided, however, that all aspects of the access plan shall be proposed by the 12 of 16
225pharmaceutical manufacturing company and the commission shall not require specific elements
226for approval.
227 (e) Upon approval of the proposed access and affordability improvement plan, the
228commission shall notify the pharmaceutical manufacturing company to begin immediate
229implementation of the access and affordability improvement plan. Public notice shall be
230provided by the commission on its website, identifying that the pharmaceutical manufacturing
231company is implementing an access and affordability improvement plan; provided, however, that
232upon the successful completion of the access and affordability improvement plan, the identity of
233the pharmaceutical manufacturing company shall be removed from the commission's website.
234All pharmaceutical manufacturing companies implementing an approved access improvement
235plan shall be subject to additional reporting requirements and compliance monitoring as
236determined by the commission. The commission shall provide assistance to the pharmaceutical
237manufacturing company in the successful implementation of the access and affordability
238improvement plan.
239 (f) All pharmaceutical manufacturing companies shall work in good faith to implement
240the access and affordability improvement plan. At any point during the implementation of the
241access and affordability improvement plan, the pharmaceutical manufacturing company may file
242amendments to the access improvement plan, subject to approval of the commission.
243 (g) At the conclusion of the timetable established in the access and affordability
244improvement plan, the pharmaceutical manufacturing company shall report to the commission
245regarding the outcome of the access and affordability improvement plan. If the commission
246determines that the access and affordability improvement plan was unsuccessful, the commission 13 of 16
247shall: (i) extend the implementation timetable of the existing access and affordability
248improvement plan; (ii) approve amendments to the access and affordability improvement plan as
249proposed by the pharmaceutical manufacturing company; (iii) require the pharmaceutical
250manufacturing company to submit a new access and affordability improvement plan; or (iv)
251waive or delay the requirement to file any additional access and affordability improvement plans.
252 (h) The commission shall submit a recommendation for proposed legislation to the joint
253committee on health care financing if the commission determines that further legislative
254authority is needed to assist pharmaceutical manufacturing company with the implementation of
255access and affordability improvement plans or to otherwise ensure compliance with this section.
256 (i) An access and affordability improvement plan under this section shall remain
257confidential in accordance with section 2A.
258 (j) The commission shall assess a civil penalty to a pharmaceutical manufacturing
259company of not more than $1,000,000, in each instance, if the commission determines that the
260pharmaceutical manufacturing company: (i) declined or willfully neglected to file an access and
261affordability improvement plan with the commission under subsection (a); (ii) failed to file an
262acceptable access and affordability improvement plan in good faith with the commission; (iii)
263failed to implement the access and affordability improvement plan in good faith; or (iv)
264knowingly failed to provide information required by this section to the commission or knowingly
265falsified the information. The commission shall seek to promote compliance with this section and
266shall only impose a civil penalty as a last resort. Penalties collected under this subsection shall be
267deposited into the Prescription Drug Cost Assistance Trust Fund established in section 2EEEEEE
268of chapter 29. 14 of 16
269 (k) If a pharmaceutical manufacturing company declines to enter into an access and
270affordability improvement plan under this section, the commission may publicly post the
271proposed value of the eligible drug, hold a public hearing on the proposed value of the eligible
272drug and solicit public comment. The pharmaceutical manufacturing company shall appear and
273testify at the public hearing held on the eligible drug’s proposed value. Upon the conclusion of a
274public hearing under this subsection, the commission shall issue recommendations on ways to
275reduce the cost of an eligible drug for the purpose of improving patient access to the eligible
276drug. The recommendations shall be publicly posted on the commission’s website and provided
277to the clerks of the house of representatives and senate, the joint committee on health care
278financing and the house and senate committees on ways and means.
279 If a pharmaceutical manufacturing company is deemed to not be acting in good faith to
280develop an acceptable or complete access and affordability improvement plan, the commission
281may publicly post the proposed value of the eligible drug, hold a public hearing on the proposed
282value of the eligible drug and solicit public comment. The pharmaceutical manufacturing
283company shall appear and testify at any hearing held on the eligible drug’s proposed value. Upon
284the conclusion of a public hearing under this subsection, the commission shall issue
285recommendations on ways to reduce the cost of an eligible drug for the purpose of improving
286patient access to the eligible drug. The recommendations shall be publicly posted on the
287commission’s website and provided to the clerks of the house of representatives and senate, the
288joint committee on health care financing and the house and senate committees on ways and
289means.
290 Before making a determination that the pharmaceutical manufacturing company is not
291acting in good faith, the commission shall send a written notice to the pharmaceutical 15 of 16
292manufacturing company that the commission shall deem the pharmaceutical manufacturing
293company to not be acting in good faith if the pharmaceutical manufacturing company does not
294submit an acceptable access and affordability improvement plan within 30 days of receipt of
295notice; provided, however, that the commission shall not send a notice under this paragraph
296within 120 calendar days from the date that the commission notified the pharmaceutical
297manufacturing company of its requirement to enter into the access and affordability improvement
298plan.
299 (l) The commission shall promulgate regulations necessary to implement this section.
300 SECTION 4. Section 13 of chapter 17 of the General Laws is hereby amended by adding
301the following subsection:-
302 (f) As used in this subsection, the following words shall have the following meanings
303unless the context clearly requires otherwise:
304 “Public health essential drug”, a prescription drug, biologic or biosimilar approved by the
305United States Food and Drug Administration that: (i) appears on the Model List of Essential
306Medicines most recently adopted by the World Health Organization; or (ii) is deemed an
307essential medicine by the commission due to its efficacy in treating a life-threatening health
308condition or a chronic health condition that substantially impairs an individual’s ability to engage
309in activities of daily living or because limited access to a certain population would pose a public
310health challenge.
311 The commission shall identify and publish a list of public health essential drugs. The list
312shall be updated not less than annually and be made publicly available on the department’s
313website; provided, however, that the commission may provide an interim listing of a public 16 of 16
314health essential drug prior to an annual update. The commission shall notify and forward a copy
315of the list to the health policy commission established under chapter 6D.