Maryland 2025 Regular Session

Maryland Senate Bill SB357 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3		EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4		[Brackets] indicate matter deleted from existing law.
5	5		Underlining indicates amendments to bill.
6	6		Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7	7		amendment.
8		-	Italics indicate opposite chamber/conference committee amendments.
9	8		sb0357
10	9
11	10		SENATE BILL 357
12		-	J1, J5 (5lr2092)
13		-	ENROLLED BILL
14		-	— Finance/Health and Government Operations —
15		-	Introduced by Senators Gile and Feldman, Feldman, and Hester
16		-
17		-	Read and Examined by Proofreaders:
18		-
19		-	_______________________________________________
20		-	Proofreader.
21		-	_______________________________________________
22		-	Proofreader.
23		-
24		-	Sealed with the Great Seal and presented to the Governor, for his approval this
25		-
26		-	_______ day of _______________ at ________________________ o’clock, ________M.
27		-
28		-	______________________________________________
29		-	President.
	11	+	J1, J5 5lr2092
	12	+	CF HB 424
	13	+	By: Senators Gile and Feldman, Feldman, and Hester
	14	+	Introduced and read first time: January 16, 2025
	15	+	Assigned to: Finance
	16	+	Committee Report: Favorable with amendments
	17	+	Senate action: Adopted
	18	+	Read second time: February 22, 2025
30	19
31	20		CHAPTER ______
32	21
33	22		AN ACT concerning 1
34	23
35	24		Prescription Drug Affordability Board – Authority for Upper Payment Limits 2
36	25		and Stakeholder Council Membership 3
37	26		(Lowering Prescription Drug Costs for All Marylanders Now Act) 4
38	27
39	28		FOR the purpose of altering the membership of the Prescription Drug Affordability 5
40	29		Stakeholder Council; requiring the Prescription Drug Affordability Board, under 6
41	30		certain circumstances, to establish a process for setting upper payment limits for all 7
42	31		purchases and payor reimbursements of prescription drug products in the State that 8
43	32		the Board determines have led or will lead to affordability challenges; authorizing 9
44	33		the Board to reconsider an upper payment limit for a drug that becomes a current 10
45	34		shortage; altering requirements related to the setting of upper payment limits by the 11
46	35		Board; requiring the Board to confer with the Maryland Medical Assistance Program 12
47	36		before establishing an upper payment limit that applies to the Program; prohibiting 13
48	37		the Board from taking certain actions related to upper payment limits; and generally 14
49		-	relating to the Prescription Drug Affordability Board. 15 2 SENATE BILL 357
	38	+	relating to the Prescription Drug Affordability Board. 15
	39	+
	40	+	BY repealing and reenacting, with amendments, 16
	41	+	Article – Health – General 17
	42	+	Section 21–2C–01, 21–2C–04, 21–2C–13, and 21–2C–14 18
	43	+	Annotated Code of Maryland 19
	44	+	(2023 Replacement Volume and 2024 Supplement) 20
	45	+
	46	+	BY repealing and reenacting, without amendments, 21
	47	+	Article – Health – General 22
	48	+	Section 21–2C–09(c) and 21–2C–11(a) 23 2 SENATE BILL 357
	49	+
	50	+
	51	+	Annotated Code of Maryland 1
	52	+	(2023 Replacement Volume and 2024 Supplement) 2
	53	+
	54	+	BY adding to 3
	55	+	Article – Health – General 4
	56	+	Section 21–2C–09(d) and (e) and 21–2C–16 5
	57	+	Annotated Code of Maryland 6
	58	+	(2023 Replacement Volume and 2024 Supplement) 7
	59	+
	60	+	BY repealing 8
	61	+	Article – Health – General 9
	62	+	Section 21–2C–11(d) and 21–2C–16 10
	63	+	Annotated Code of Maryland 11
	64	+	(2023 Replacement Volume and 2024 Supplement) 12
	65	+
	66	+	BY adding to 13
	67	+	Article – Health – General 14
	68	+	Section 21–2C–16 15
	69	+	Annotated Code of Maryland 16
	70	+	(2023 Replacement Volume and 2024 Supplement) 17
	71	+
	72	+	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
	73	+	That the Laws of Maryland read as follows: 19
	74	+
	75	+	Article – Health – General 20
	76	+
	77	+	21–2C–01. 21
	78	+
	79	+	(a) In this subtitle the following words have the meanings indicated. 22
	80	+
	81	+	(b) “Biologic” means a drug that is produced or distributed in accordance with a 23
	82	+	biologics license application approved under 42 C.F.R. § 447.502. 24
	83	+
	84	+	(c) “Biosimilar” means a drug that is produced or distributed in accordance with 25
	85	+	a biologics license application approved under 42 U.S.C. § 262(k)(3). 26
	86	+
	87	+	(d) “Board” means the Prescription Drug Affordability Board. 27
	88	+
	89	+	(e) (1) “Brand name drug” means a drug that is produced or distributed in 28
	90	+	accordance with an original new drug application approved under 21 U.S.C. § 355(c). 29
	91	+
	92	+	(2) “Brand name drug” does not include an authorized generic as defined 30
	93	+	by 42 C.F.R. § 447.502. 31
	94	+
	95	+	(F) “CURRENT SHORTAGE ” MEANS A DRUG : 32
	96	+	SENATE BILL 357 3
	97	+
	98	+
	99	+	(1) LISTED AS CURRENT ON THE FEDERAL FOOD AND DRUG 1
	100	+	ADMINISTRATION ’S DRUG SHORTAGE DATABASE; OR 2
	101	+
	102	+	(2) OTHERWISE DETERMINED BY THE BOARD TO BE IN SHORT 3
	103	+	SUPPLY IN THE STATE. 4
	104	+
	105	+	[(f)] (G) “Generic drug” means: 5
	106	+
	107	+	(1) A retail drug that is marketed or distributed in accordance with an 6
	108	+	abbreviated new drug application, approved under 21 U.S.C. § 355(j); 7
	109	+
	110	+	(2) An authorized generic as defined by 42 C.F.R. § 447.502; or 8
	111	+
	112	+	(3) A drug that entered the market before 1962 that was not originally 9
	113	+	marketed under a new drug application. 10
	114	+
	115	+	[(g)] (H) “Manufacturer” means an entity that: 11
	116	+
	117	+	(1) (i) Engages in the manufacture of a prescription drug product; or 12
	118	+
	119	+	(ii) Enters into a lease with another manufacturer to market and 13
	120	+	distribute a prescription drug product under the entity’s own name; and 14
	121	+
	122	+	(2) Sets or changes the wholesale acquisition cost of the prescription drug 15
	123	+	product it manufactures or markets. 16
	124	+
	125	+	[(h)] (I) “Prescription drug product” means a brand name drug, a generic drug, 17
	126	+	a biologic, or a biosimilar. 18
	127	+
	128	+	[(i)] (J) “Stakeholder Council” means the Prescription Drug Affordability 19
	129	+	Stakeholder Council. 20
	130	+
	131	+	21–2C–04. 21
	132	+
	133	+	(a) There is a Prescription Drug Affordability Stakeholder Council. 22
	134	+
	135	+	(b) The purpose of the Stakeholder Council is to provide stakeholder input to 23
	136	+	assist the Board in making decisions as required under this subtitle. 24
	137	+
	138	+	(c) (1) The Stakeholder Council consists of [26] members appointed in 25
	139	+	accordance with this subsection. 26
	140	+
	141	+	(2) The Speaker of the House of Delegates shall appoint: 27
	142	+
	143	+	(i) One representative of generic drug corporations; 28
	144	+	4 SENATE BILL 357
	145	+
	146	+
	147	+	(ii) One representative of nonprofit insurance carriers; 1
	148	+
	149	+	(iii) One representative of a statewide health care advocacy coalition; 2
	150	+
	151	+	(iv) One representative of a statewide advocacy organization for 3
	152	+	seniors; 4
	153	+
	154	+	(v) One representative of a statewide organization for diverse 5
	155	+	communities; 6
	156	+
	157	+	(vi) One representative of a labor union; 7
	158	+
	159	+	(vii) ONE REPRESENTATIVE OF THE RARE DISEASE COM MUNITY; 8
	160	+
	161	+	(VIII) One health services researcher specializing in prescription 9
	162	+	drugs; and 10
	163	+
	164	+	[(viii)] (IX) One public member at the discretion of the Speaker of the 11
	165	+	House of Delegates. 12
	166	+
	167	+	(3) The President of the Senate shall appoint: 13
	168	+
	169	+	(i) One representative of brand name drug corporations; 14
	170	+
	171	+	(ii) One representative of physicians; 15
	172	+
	173	+	(iii) One representative of nurses; 16
	174	+
	175	+	(iv) One representative of hospitals; 17
	176	+
	177	+	(v) One representative of dentists; 18
	178	+
	179	+	(vi) ONE REPRESENTATIVE OF ONCOLOGISTS ; 19
	180	+
	181	+	(VII) One representative of managed care organizations; 20
	182	+
	183	+	[(vii)] (VIII) One representative of the Department of Budget and 21
	184	+	Management; 22
	185	+
	186	+	[(viii)] (IX) One clinical researcher; and 23
	187	+
	188	+	[(ix)] (X) One public member at the discretion of the President of 24
	189	+	the Senate. 25
	190	+
	191	+	(4) The Governor shall appoint: 26
	192	+	SENATE BILL 357 5
	193	+
	194	+
	195	+	(i) One representative of brand name drug corporations; 1
	196	+
	197	+	(ii) One representative of generic drug corporations; 2
	198	+
	199	+	(iii) One representative of biotechnology companies; 3
	200	+
	201	+	(iv) One representative of for–profit health insurance carriers; 4
	202	+
	203	+	(v) One representative of employers; 5
	204	+
	205	+	(vi) One representative of pharmacy benefits managers; 6
	206	+
	207	+	(vii) One representative of pharmacists; 7
	208	+
	209	+	(viii) One pharmacologist; [and] 8
	210	+
	211	+	(ix) ONE REPRESENTATIVE OF A PATIENT ADVOCACY 9
	212	+	ORGANIZATION ; AND 10
	213	+
	214	+	(X) One public member at the discretion of the Governor. 11
	215	+
	216	+	(5) Collectively, the members of the Stakeholder Council shall have 12
	217	+	knowledge of the following: 13
	218	+
	219	+	(i) The pharmaceutical business model; 14
	220	+
	221	+	(ii) Supply chain business models; 15
	222	+
	223	+	(iii) The practice of medicine or clinical training; 16
	224	+
	225	+	(iv) Consumer or patient perspectives; 17
	226	+
	227	+	(v) Health care costs trends and drivers; 18
	228	+
	229	+	(vi) Clinical and health services research; or 19
	230	+
	231	+	(vii) The State’s health care marketplace. 20
	232	+
	233	+	(6) To the extent practicable and consistent with federal and State law, the 21
	234	+	membership of the Stakeholder Council shall reflect the racial, ethnic, and gender diversity 22
	235	+	of the State. 23
	236	+
	237	+	(7) From among the membership of the Stakeholder Council, the Board 24
	238	+	chair shall appoint two members to be cochairs of the Stakeholder Council. 25
	239	+
	240	+	(d) (1) The term of a member is 3 years. 26
	241	+	6 SENATE BILL 357
	242	+
	243	+
	244	+	(2) The initial members of the Stakeholder Council shall serve staggered 1
	245	+	terms as required by the terms provided for members on October 1, 2019. 2
	246	+
	247	+	(e) A member of the Stakeholder Council: 3
	248	+
	249	+	(1) May not receive compensation as a member of the Stakeholder Council; 4
	250	+	but 5
	251	+
	252	+	(2) Is entitled to reimbursement for expenses under the Standard State 6
	253	+	Travel Regulations, as provided in the State budget. 7
	254	+
	255	+	21–2C–09. 8
	256	+
	257	+	(c) On or before December 31, 2020, and each December 31 thereafter, the Board 9
	258	+	shall submit to the Senate Finance Committee and the House Health and Government 10
	259	+	Operations Committee, in accordance with § 2–1257 of the State Government Article, a 11
	260	+	report that includes: 12
	261	+
	262	+	(1) Price trends for prescription drug products; 13
	263	+
	264	+	(2) The number of prescription drug products that were subject to Board 14
	265	+	review and the results of the review; and 15
	266	+
	267	+	(3) Any recommendations the Board may have on further legislation 16
	268	+	needed to make prescription drug products more affordable in the State. 17
	269	+
	270	+	(D) IF THE BOARD SETS A NEW UPPE R PAYMENT LIMIT , THE BOARD SHALL 18
	271	+	INCLUDE IN THE FIRST REPORT THAT IS REQUI RED UNDER SUBSECTION (C) OF THIS 19
	272	+	SECTION AFTER THE UP PER PAYMENT LIMIT HA S BEEN IN EFFECT FOR 1 YEAR 20
	273	+	INFORMATION ON THE E FFECTS OF THE UPPER PAYMENT LIM IT, BASED ON 21
	274	+	AVAILABLE TIMELY DAT A, FOR THE FOLLOWING : 22
	275	+
	276	+	(1) PATIENT OUT–OF–POCKET COSTS INCLUDI NG WHETHER THE 23
	277	+	UPPER PAYMENT LIMIT WAS ASSOCIATED WITH INCREASES OR DECREAS ES IN WHAT 24
	278	+	PATIENTS PAY FOR PRE SCRIPTION DRUG PRODU CTS; 25
	279	+
	280	+	(2) PATIENT HEALTH INSURA NCE PREMIUMS , INCLUDING WHETHER 26
	281	+	THE UPPER PAYMENT LI MIT IS ASSOCIATED WI TH INCREASES OR DECR EASES IN 27
	282	+	HEALTH INSURANCE COS TS FOR PATIENTS; 28
	283	+
	284	+	(3) PHARMACIES OPERATING IN THE STATE, INCLUDING THE IMPACT 29
	285	+	ON REIMBURSEMENT RAT ES AND FINANCIAL VIA BILITY OF RETAI L AND 30
	286	+	INDEPENDENT PHARMACI ES; 31
	287	+	SENATE BILL 357 7
	288	+
	289	+
	290	+	(4) PATIENT HEALTH INSURA NCE FORMULARIES , INCLUDING 1
	291	+	WHETHER THE PRESCRIP TION DRUG PRODUCT SU BJECT TO THE UPPER P AYMENT 2
	292	+	LIMIT REMAINED ON FO RMULARIES; 3
	293	+
	294	+	(5) PROVIDER–ADMINISTERED MEDICAT IONS SUBJECT TO THE 4
	295	+	UPPER PAYMENT LIMIT, INCLUDING WHETHER PR OVIDERS WERE ABLE TO ACQUIRE 5
	296	+	THE PRESCRIPTION DRU G PRODUCT SUBJECT TO THE UPPER PAYMENT LI MIT AT A 6
	297	+	RATE TO ACCOUNT FOR ACQUISITION COSTS AN D WHETHER THERE WAS AN IMPACT 7
	298	+	ON PROVIDER REIMBURS EMENT; 8
	299	+
	300	+	(6) PATIENT ACCESS TO THE PRESCRIPTION DRUG PRODUC T 9
	301	+	SUBJECT TO THE UPPER PAYMENT LIMIT , WHICH MAY INCLUDE : 10
	302	+
	303	+	(I) WHETHER PRESCRIPTION DRUG PRODUCT SHORTAG ES OR 11
	304	+	OTHER SUPPLY DISRUPT IONS OCCURRED AFTER THE UPPER PAYMENT LI MIT TOOK 12
	305	+	EFFECT; 13
	306	+
	307	+	(II) WHETHER FORMULARY PLA CEMENT OR PLAN DESIGN 14
	308	+	CHANGES MADE THE PRE SCRIPTION DRUG PRODU CT SUBJECT TO THE UP PER LIMIT 15
	309	+	MORE DIFFICULT FOR P ATIENTS TO ACCESS , INCLUDING IF INSURAN CE PLANS 16
	310	+	PREFERRED A PRESCRIP TION DRUG PRODUCT WI THOUT AN UPPER PAYME NT LIMIT 17
	311	+	OVER A PRESCRIPTION DRUG PRODUCT SUBJECT TO AN UPPER PAYMENT L IMIT; 18
	312	+
	313	+	(III) WHETHER THE DISTRIBUT ION AND DELIVERY OF 19
	314	+	SPECIALTY OR RARE DI SEASE MEDICATIONS FR OM OUT–OF–STATE PHARMACIES TO 20
	315	+	PROVIDERS, PHARMACIES , OR PATIENTS WAS IMPA CTED; 21
	316	+
	317	+	(IV) WHETHER PATIENTS IN C OMMUNITIES OF COLOR , 22
	318	+	PATIENTS WHO ARE WOMEN , PATIENTS WITH A RARE DISEASE, OR PATIENTS IN 23
	319	+	RURAL AREAS EXPERIEN CED DISPROPORTIONATE ACCESS CHALLENGES ; AND 24
	320	+
	321	+	(V) WHETHER COST DIFFEREN CES AS A RESULT OF T HE UPPER 25
	322	+	PAYMENT LIMIT AFFECT ED PATIENTS, PHARMACIES , OR PROVIDERS AND , IF THE 26
	323	+	COST DIFFERENCE RESULTED IN AN INCREASE IN CO STS, WHO WAS ULTIMATELY 27
	324	+	RESPONSIBLE FOR BEAR ING THE INCREASED CO ST; 28
	325	+
	326	+	(7) COVERED ENTITY PROVID ERS PARTICIPATING IN THE 340B DRUG 29
	327	+	DISCOUNT PROGRAM , INCLUDING THE IMPACT OF THE UPPER PAYMENT LIMIT ON 30
	328	+	THE OPERATIONS OF THE PROVIDERS AND THEIR CONTRACTED PHA RMACIES; AND 31
	329	+
	330	+	(8) THE BIOTECHNOLOGY IND USTRY IN THE STATE, INCLUDING THE 32
	331	+	IMPACT ON PHARMACEUT ICAL RESEARCH AND DE VELOPMENT , INVESTMENT, AND 33
	332	+	JOB GROWTH . 34
	333	+	8 SENATE BILL 357
	334	+
	335	+
	336	+	(E) (1) THE BOARD MAY REQUEST INF ORMATION NECESSARY T O 1
	337	+	COMPLETE THE REPORT REQU IRED UNDER SUBSECTIO NS (C) AND (D) OF THIS 2
	338	+	SECTION FROM AN AFFE CTED ENTITY. 3
	339	+
	340	+	(2) THE ENTITY FROM WHICH INFORMATION WAS REQU ESTED UNDER 4
	341	+	PARAGRAPH (1) OF THIS SUBSECTION S HALL MAKE A GOOD FAI TH EFFORT TO 5
	342	+	PROVIDE THE REQUESTE D INFORMATIO N. 6
	343	+
	344	+	21–2C–11. 7
	345	+
	346	+	(a) In this section, “Fund” means the Prescription Drug Affordability Fund. 8
	347	+
	348	+	[(d) (1) The Board shall be established using special or general funds, which 9
	349	+	shall be repaid to the State with the funds from the Fund. 10
	350	+
	351	+	(2) If the Board receives funding from the Maryland Health Care 11
	352	+	Commission under paragraph (1) of this subsection, the Board shall repay the funds to the 12
	353	+	Commission from the Fund over a 3–year period beginning June 1, 2021.] 13
	354	+
	355	+	21–2C–13. 14
	356	+
	357	+	(a) If, under § 21–2C–07 of this subtitle, the Board finds that it is in the best 15
	358	+	interest of the State to establish a process for setting upper payment limits for prescription 16
	359	+	drug products that it determines have led or will lead to an affordability challenge, the 17
	360	+	Board, in conjunction with the Stakeholder Council, shall draft a plan of action for 18
	361	+	implementing the process [that includes the criteria the Board shall use to set upper 19
	362	+	payment limits] IN ACCORDANCE WITH T HE REQUIREMENTS OF T HIS SECTION. 20
	363	+
	364	+	(b) The criteria for setting upper payment limits shall include consideration of: 21
	365	+
	366	+	(1) The cost of administering the prescription drug product; 22
	367	+
	368	+	(2) The cost of delivering the prescription drug product to consumers; [and] 23
	369	+
	370	+	(3) THE EFFECT THE UPPER PAYMENT LIMIT WILL H AVE ON 24
	371	+	PROVIDERS OF 340B DRUGS; 25
	372	+
	373	+	(4) FOR AN UPPER PAYMENT LIMIT ON A DRUG THAT IS DESIGNATED 26
	374	+	AS A DRUG FOR A RARE DISEASE OR CONDITION , THE IMPACT OF THE UP PER 27
	375	+	PAYMENT LIMIT ON PAT IENTS WITH RARE DISE ASES; AND 28
	376	+
	377	+	[(3)] (4) (5) Other relevant administrative costs related to the prescription 29
	378	+	drug product. 30
	379	+
	380	+	[(c) The process for setting upper payment limits shall: 31 SENATE BILL 357 9
50	381
51	382
52	383
53		-	BY repealing and reenacting, with amendments, 1
54		-	Article – Health – General 2
55		-	Section 21–2C–01, 21–2C–04, 21–2C–13, and 21–2C–14 3
56		-	Annotated Code of Maryland 4
57		-	(2023 Replacement Volume and 2024 Supplement) 5
	384	+	(1) Prohibit the application of an upper payment limit for a prescription 1
	385	+	drug product that is on the federal Food and Drug Administration prescription drug 2
	386	+	shortage list; and 3
58	387
59		-	BY repealing and reenacting, without amendments, 6
60		-	Article – Health – General 7
61		-	Section 21–2C–09(c) and 21–2C–11(a) 8
62		-	Annotated Code of Maryland 9
63		-	(2023 Replacement Volume and 2024 Supplement) 10
	388	+	(2) Require the Board to: 4
64	389
65		-	BY adding to 11
66		-	Article – Health – General 12
67		-	Section 21–2C–09(d) and (e) and 21–2C–16 13
68		-	Annotated Code of Maryland 14
69		-	(2023 Replacement Volume and 2024 Supplement) 15
	390	+	(i) Monitor the availability of any prescription drug product for 5
	391	+	which it sets an upper payment limit; and 6
70	392
71		-	BY repealing 16
72		-	Article – Health – General 17
73		-	Section 21–2C–11(d) and 21–2C–16 18
74		-	Annotated Code of Maryland 19
75		-	(2023 Replacement Volume and 2024 Supplement) 20
	393	+	(ii) If there becomes a shortage of the prescription drug product in 7
	394	+	the State, reconsider or suspend the upper payment limit.] 8
76	395
77		-	BY adding to 21
78		-	Article – Health – General 22
79		-	Section 21–2C–16 23
80		-	Annotated Code of Maryland 24
81		-	(2023 Replacement Volume and 2024 Supplement) 25
	396	+	(C) (1) IF THE BOARD PREVIOUSLY SET AN UPPER PAYMENT LIM IT FOR A 9
	397	+	DRUG THAT BECOMES A CURRENT SHORTAGE , THE BOARD MAY RECONSIDER THE 10
	398	+	PREVIOUSLY SET UPPER PAYMENT LIMIT . 11
82	399
83		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 26
84		-	That the Laws of Maryland read as follows: 27
	400	+	(2) THE BOARD MAY NOT : 12
85	401
86		-	Article – Health – General 28
	402	+	(I) ESTABLISH A NEW UP PER PAYMENT LIMIT FO R A CURRENT 13
	403	+	SHORTAGE; 14
87	404
88		-	21–2C–01. 29
	405	+	(II) ENFORCE AN UPPER PAYM ENT LIMIT AGAINST PR OVIDER 15
	406	+	OR PHARMACY REIMBURS EMENT REQUIREMENTS F OR MEDICARE PART C OR PART 16
	407	+	D PLANS; OR 17
89	408
90		-	(a) In this subtitle the following words have the meanings indicated. 30
	409	+	(III) COUNT A PHARMACY DISP ENSING FEE TOWARD OR 18
	410	+	SUBJECT A PHARMACY DISPENSING FEE TO AN UPPER PAYMENT LIMIT . 19
91	411
92		-	(b) “Biologic” means a drug that is produced or distributed in accordance with a 31
93		-	biologics license application approved under 42 C.F.R. § 447.502. 32
	412	+	(d) (1) If a plan of action is drafted under subsection (a) of this section, the 20
	413	+	Board shall submit the plan of action to the Legislative Policy Committee of the General 21
	414	+	Assembly, in accordance with § 2–1257 of the State Government Article, for its approval. 22
94	415
95		-	(c) ~~“Biosimilar” means a drug that is produced or distributed in accordance with 33~~
96		-	~~a biologics license application approved under 42 U.S.C~~. ~~§ 262(k)(3). 34~~
	416	+	(2) The Legislative Policy Committee shall have 45 days to approve the 23
	417	+	plan of action. 24
97	418
98		-	(d) “Board” means the Prescription Drug Affordability Board. 35 SENATE BILL 357 3
	419	+	(3) If the Legislative Policy Committee does not approve the plan of action, 25
	420	+	the Board shall submit the plan to the Governor and the Attorney General for approval. 26
	421	+
	422	+	(4) The Governor and the Attorney General shall have 45 days to approve 27
	423	+	the plan of action. 28
	424	+
	425	+	(5) The Board may not set upper payment limits unless the plan is 29
	426	+	approved, in accordance with this subsection, by: 30
	427	+
	428	+	(i) The Legislative Policy Committee; or 31 10 SENATE BILL 357
99	429
100	430
101	431
102		-	(e) (1) “Brand name drug” means a drug that is produced or distributed in 1
103		-	accordance with an original new drug application approved under 21 U.S.C. § 355(c). 2
	432	+	(ii) 1. The Governor; and 1
104	433
105		-	(2) “Brand name drug” does not include an authorized generic as defined 3
106		-	by 42 C.F.R. § 447.502. 4
	434	+	2. The Attorney General. 2
107	435
108		-	~~(F) “CURRENT SHORTAGE ” MEANS A DRUG : 5~~
	436	+	21–2C–14. 3
109	437
110		-	(1) LISTED AS CURRENT ON THE FEDERAL FOOD AND DRUG 6
111		-	ADMINISTRATION ’S DRUG SHORTAGE DATABASE; OR 7
	438	+	[(a) If a plan of action is approved under § 21–2C–13(d) of this subtitle] IN 4
	439	+	ACCORDANCE WITH THE PLAN OF ACTION APPRO VED BY THE LEGISLATIVE POLICY 5
	440	+	COMMITTEE ON OCTOBER 22, 2024, the Board may set upper payment limits for 6
	441	+	prescription drug products that are: 7
112	442
113		-	(2) ~~OTHERWISE DETERMINED~~ BY ~~THE BOARD TO BE IN SHORT~~ 8
114		-	~~SUPPLY IN THE~~ STATE. 9
	443	+	(1) Purchased or paid for by a unit of State or local government or an 8
	444	+	organization on behalf of a unit of State or local government, including: 9
115	445
116		-	~~[(f)]~~ (G) ~~“Generic drug”~~ ~~means:~~ 10
	446	+	(i) State or county correctional facilities; 10
117	447
118		-	(1) A retail drug that is marketed or distributed in accordance with an 11
119		-	abbreviated new drug application, approved under 21 U.S.C. § 355(j); 12
	448	+	(ii) State hospitals; and 11
120	449
121		-	(2) ~~An authorized generic as defined by 42 C.F.R. § 447.502~~; ~~or 13~~
	450	+	(iii) Health clinics at State institutions of higher education; 12
122	451
123		-	(3) A drug that entered the market before 1962 that was not originally 14
124		-	marketed under a new drug application. 15
	452	+	(2) Paid for through a health benefit plan on behalf of a unit of State or 13
	453	+	local government, including a county, bicounty, or municipal employee health benefit plan; 14
	454	+	or 15
125	455
126		-	[(g)] (H) “Manufacturer” means an entity that: 16
	456	+	(3) Purchased for or paid for by the Maryland State Medical Assistance 16
	457	+	Program. 17
127	458
128		-	(1) ~~(i) Engages in~~ the ~~manufacture~~ of ~~a prescription drug product;~~ ~~or 17~~
	459	+	[(b) The upper payment limits set under subsection (a) of this section shall: 18
129	460
130		-	(ii) ~~Enters into a lease with another manufacturer~~ to ~~market and 18~~
131		-	~~distribute a prescription drug product under the entity’s own name~~; and 19
	461	+	(1) Be for prescription drug products that have led or will lead to an 19
	462	+	affordability challenge; and 20
132	463
133		-	(2) ~~Sets or changes~~ the ~~wholesale acquisition cost of the prescription drug 20~~
134		-	~~product it manufactures or markets~~. 21
	464	+	(2) Be set in accordance with the criteria established in regulations 21
	465	+	adopted by the Board. 22
135	466
136		-	[(h)] (I) “Prescription drug product” means a brand name drug, a generic drug, 22
137		-	a biologic, or a biosimilar. 23
	467	+	(c) (1) The Board shall: 23
138	468
139		-	[(i)~~] (J) “Stakeholder Council” means~~ the Prescription Drug ~~Affordability~~ 24
140		-	~~Stakeholder Council.~~ 25
	469	+	(i) Monitor the availability of any prescription drug product for 24
	470	+	which it sets an upper payment limit; and 25
141	471
142		-	21–2C–04. 26
143		-
144		-	(a) There is a Prescription Drug Affordability Stakeholder Council. 27
145		-	4 SENATE BILL 357
	472	+	(ii) If there becomes a shortage of the prescription drug product in 26
	473	+	the State, reconsider whether the upper payment limit should be suspended or altered. 27
	474	+	SENATE BILL 357 11
146	475
147	476
148		-	(b) The purpose of the Stakeholder Council is to provide stakeholder input to 1
149		-	assist the Board in making decisions as required under this subtitle. 2
	477	+	(2) An upper payment limit set under subsection (a) of this section may not 1
	478	+	be applied to a prescription drug product while the prescription drug product is on the 2
	479	+	federal Food and Drug Administration prescription drug shortage list.] 3
150	480
151		-	(c) (1) The Stakeholder Council consists of [26] members appointed in 3
152		-	accordance with this subsection. 4
	481	+	[21–2C–16. 4
153	482
154		-	(2) The Speaker of the House of Delegates shall appoint: 5
	483	+	On or before December 1, 2026, the Board, in consultation with the Stakeholder 5
	484	+	Council, shall report to the Senate Finance Committee and the House Health and 6
	485	+	Government Operations Committee, in accordance with § 2–1257 of the State Government 7
	486	+	Article, on: 8
155	487
156		-	(i) One representative of generic drug corporations; 6
	488	+	(1) The legality, obstacles, and benefits of setting upper payment limits on 9
	489	+	all purchases and payor reimbursements of prescription drug products in the State; and 10
157	490
158		-	(ii) One representative of nonprofit insurance carriers; 7
	491	+	(2) Recommendations regarding whether the General Assembly should 11
	492	+	pass legislation to expand the authority of the Board to set upper payment limits to all 12
	493	+	purchases and payor reimbursements of prescription drug products in the State.] 13
159	494
160		-	~~(iii) One representative of a statewide health care advocacy coalition; 8~~
	495	+	21–2C–16. 14
161	496
162		-	(iv) One representative of a statewide advocacy organization for 9
163		-	seniors; 10
	497	+	(A) (1) THE BOARD, IN CONSULTATION WITH THE STAKEHOLDER 15
	498	+	COUNCIL, SHALL DETERMINE WHET HER, IN ADDITION TO SETTI NG UPPER PAY MENT 16
	499	+	LIMITS IN ACCORDANCE WITH § 21–2C–14 OF THIS SUBTITLE , IT IS IN THE BEST 17
	500	+	INTEREST OF THE STATE FOR THE BOARD TO ESTABLISH A PROCESS FOR SETTING 18
	501	+	UPPER PAYMENT LIMITS FOR ALL PURCHASES AND PAYOR REIMBURSEMENTS OF 19
	502	+	PRESCRIPTION DRUG PR ODUCTS IN THE STATE THAT THE BOARD DETERMINES 20
	503	+	HAVE LED OR WILL LEA D TO AN AFFORDABILIT Y CHALLENGE . 21
164	504
165		-	(v) ~~One representative~~ of ~~a statewide organization for diverse 11~~
166		-	~~communities; 12~~
	505	+	(2) WHEN MAKING A DETERMI NATION UNDER PARAGRA PH (1) OF 22
	506	+	THIS SUBSECTION , THE BOARD SHALL CONSIDER , IF APPLICABLE: 23
167	507
168		-	(vi) One representative of a labor union; 13
	508	+	(I) CONTRACT AND BUDGET D ATA PROVIDED TO THE BOARD 24
	509	+	THAT DEMONSTRATES SAVINGS TO THE STATE OR LOCAL GOVERN MENTS AS A 25
	510	+	RESULT OF UPPER PAYM ENT LIMITS SET IN AC CORDANCE WITH § 21–2C–14 OF THIS 26
	511	+	SUBTITLE; 27
169	512
170		-	(vii) ONE REPRESENTATIVE OF THE RARE DISEASE COM MUNITY; 14
	513	+	(II) SUCCESS OF SETTING UP PER PAYMENT LIMITS I N OTHER 28
	514	+	STATES; AND 29
171	515
172		-	(~~VIII~~) ~~One health services researcher specializing in prescription 15~~
173		-	~~drugs;~~ and 16
	516	+	(III) EXPECTED SAVINGS FROM MEDICARE MAXIMUM FAIR 30
	517	+	PRICES SET BY THE CENTERS FOR MEDICARE AND MEDICAID SERVICES. 31
174	518
175		-	[(viii)] (IX) One public member at the discretion of the Speaker of the 17
176		-	House of Delegates. 18
177		-
178		-	(3) The President of the Senate shall appoint: 19
179		-
180		-	(i) One representative of brand name drug corporations; 20
181		-
182		-	(ii) One representative of physicians; 21
183		-
184		-	(iii) One representative of nurses; 22
185		-
186		-	(iv) One representative of hospitals; 23
187		-
188		-	(v) One representative of dentists; 24
189		-
190		-	(vi) ONE REPRESENTATIVE OF ONCOLOGISTS ; 25
191		-
192		-	(VII) One representative of managed care organizations; 26
193		-	SENATE BILL 357 5
	519	+	(B) (1) IF THE BOARD MAKES AN AFFIRM ATIVE DETERMINATION UNDER 32
	520	+	SUBSECTION (A) OF THIS SECTION , THE BOARD, IN CONSULTATION WITH THE 33 12 SENATE BILL 357
194	521
195	522
196		-	[(vii)] (VIII) One representative of the Department of Budget and 1
197		-	Management; 2
	523	+	STAKEHOLDER COUNCIL, SHALL ESTABLISH A PR OCESS FOR SETTING UP PER 1
	524	+	PAYMENT LIMITS FOR ALL PURCHASES AND PAYOR REIMBURSEMENTS OF 2
	525	+	PRESCRIPTION DRUG PRODUCTS I N THE STATE THAT THE BOARD DETERMINES 3
	526	+	HAVE LED OR WILL LEA D TO AN AFFORDABILIT Y CHALLENGE . 4
198	527
199		-	[(viii)] (IX) One clinical researcher; and 3
	528	+	(2) THE PROCESS ESTABLISH ED UNDER PARAGRAPH (1) OF THIS 5
	529	+	SUBSECTION SHALL : 6
200	530
201		-	~~[(ix)]~~ (X) ~~One public member at~~ the ~~discretion~~ of ~~the President of 4~~
202		-	~~the Senate.~~ 5
	531	+	(I) TO THE EXTENT APPROPR IATE, USE THE PLAN OF ACTI ON 7
	532	+	APPROVED U NDER § 21–2C–13(D) OF THIS SUBTITLE; AND 8
203	533
204		-	(4) The Governor shall appoint: 6
	534	+	(II) OTHERWISE COMPLY WITH THE REQUIREMENTS FOR 9
	535	+	SETTING UPPER PAYMEN T LIMITS ESTABLISHED UNDER THIS SUBTITLE . 10
205	536
206		-	(i) One representative of brand name drug corporations; 7
	537	+	(3) BEFORE ESTABLISHING A N UPPER PAYMENT LIMI T THAT APPLIES 11
	538	+	TO THE MARYLAND MEDICAL ASSISTANCE PROGRAM, THE BOARD SHALL CONFER 12
	539	+	WITH THE MARYLAND MEDICAL ASSISTANCE PROGRAM TO APPROVE TH E 13
	540	+	APPLICATION OF THE U PPER PAYMENT LIMIT B Y ASSESSING WHETHER THE 14
	541	+	PROPOSED UPPER PAYME NT LIMIT WILL: 15
207	542
208		-	(ii) One representative of generic drug corporations; 8
	543	+	(I) CONFLICT WITH THE MEDICAID DRUG REBATES 16
	544	+	PROGRAM, THE COVERED OUTPATIENT DRUG RULE (CMS–2345–FC), OR ANY 17
	545	+	OTHER FEDERAL REQUIR EMENTS AS APPLICABLE ; AND 18
209	546
210		-	(iii) One representative of biotechnology companies; 9
	547	+	(II) REQUIRE ADDITIONAL FU NDING TO BE ALLOCATE D TO THE 19
	548	+	MARYLAND MEDICAL ASSISTANCE PROGRAM BUDGET . 20
211	549
212		-	(iv) One representative of for–profit health insurance carriers; 10
	550	+	SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Ma ryland read 21
	551	+	as follows: 22
213	552
214		-	~~(v) One representative of employers;~~ 11
	553	+	Article – Health – General 23
215	554
216		-	~~(vi) One representative of pharmacy benefits managers; 12~~
	555	+	21–2C–16. 24
217	556
218		-	(vii) One representative of pharmacists; 13
	557	+	(C) (1) IF SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IF THE 25
	558	+	BOARD ESTABLISHES A P ROCESS UNDER SUBSECT ION (B) OF THIS SECTION , THE 26
	559	+	BOARD SHALL SET UPPER PAYMENT LIMITS FOR ALL PURCHASES AND PAYOR 27
	560	+	REIMBURSEMENTS OF PR ESCRIPTION DRUG PROD UCTS IN THE STATE IN 28
	561	+	ACCORDANCE WITH THE PROCESS. 29
219	562
220		-	(~~viii~~) ~~One pharmacologist;~~ ~~[and] 14~~
	563	+	(2) THIS SUBSECTION DOES NOT APPLY WITH RESPE CT TO: 30
221	564
222		-	(ix) ONE REPRESENTATIVE OF A PATIENT ADVOCACY 15
223		-	ORGANIZATION ; AND 16
224		-
225		-	(X) One public member at the discretion of the Governor. 17
226		-
227		-	(5) Collectively, the members of the Stakeholder Council shall have 18
228		-	knowledge of the following: 19
229		-
230		-	(i) The pharmaceutical business model; 20
231		-
232		-	(ii) Supply chain business models; 21
233		-
234		-	(iii) The practice of medicine or clinical training; 22
235		-
236		-	(iv) Consumer or patient perspectives; 23
237		-
238		-	(v) Health care costs trends and drivers; 24
239		-
240		-	(vi) Clinical and health services research; or 25
241		-	6 SENATE BILL 357
242		-
243		-
244		-	(vii) The State’s health care marketplace. 1
245		-
246		-	(6) To the extent practicable and consistent with federal and State law, the 2
247		-	membership of the Stakeholder Council shall reflect the racial, ethnic, and gender diversity 3
248		-	of the State. 4
249		-
250		-	(7) From among the membership of the Stakeholder Council, the Board 5
251		-	chair shall appoint two members to be cochairs of the Stakeholder Council. 6
252		-
253		-	(d) (1) The term of a member is 3 years. 7
254		-
255		-	(2) The initial members of the Stakeholder Council shall serve staggered 8
256		-	terms as required by the terms provided for members on October 1, 2019. 9
257		-
258		-	(e) A member of the Stakeholder Council: 10
259		-
260		-	(1) May not receive compensation as a member of the Stakeholder Council; 11
261		-	but 12
262		-
263		-	(2) Is entitled to reimbursement for expenses under the Standard State 13
264		-	Travel Regulations, as provided in the State budget. 14
265		-
266		-	21–2C–09. 15
267		-
268		-	(c) On or before December 31, 2020, and each December 31 thereafter, the Board 16
269		-	shall submit to the Senate Finance Committee and the House Health and Government 17
270		-	Operations Committee, in accordance with § 2–1257 of the State Government Article, a 18
271		-	report that includes: 19
272		-
273		-	(1) Price trends for prescription drug products; 20
274		-
275		-	(2) The number of prescription drug products that were subject to Board 21
276		-	review and the results of the review; and 22
277		-
278		-	(3) Any recommendations the Board may have on further legislation 23
279		-	needed to make prescription drug products more affordable in the State. 24
280		-
281		-	(D) IF THE BOARD SETS A NEW UPPER PAYMENT LI MIT, TO THE EXTENT 25
282		-	PRACTICABLE, THE BOARD SHALL INCLUDE I N THE FIRST REPORT T HAT IS 26
283		-	REQUIRED UNDER SUBSE CTION (C) OF THIS SECTION AFTE R THE UPPER PAYMENT 27
284		-	LIMIT HAS BEEN IN EF FECT FOR 1 YEAR INFORMATION ON THE EFFECTS OF THE 28
285		-	UPPER PAYME NT LIMIT, BASED ON AVAILABLE T IMELY DATA, FOR THE FOLLOWING : 29
286		-
287		-	(1) PATIENT OUT–OF–POCKET COSTS INCLUDI NG WHETHER THE 30
288		-	UPPER PAYMENT LIMIT WAS ASSOCIATED WITH INCREASES OR DECREAS ES IN WHAT 31
289		-	PATIENTS PAY FOR PRE SCRIPTION DRUG PRODU CTS; 32 SENATE BILL 357 7
	565	+	(I) PAYOR REIMBURSEMENTS UNDER MEDICARE PART C AND 31
	566	+	D PLANS; 32 SENATE BILL 357 13
290	567
291	568
292	569
293		-	(2) PATIENT HEALTH INSURANCE PREMIUMS , INCLUDING WHETHER 1
294		-	THE UPPER PAYMENT LI MIT IS ASSOCIATED WI TH INCREASES OR DECR EASES IN 2
295		-	HEALTH INSURANCE COS TS FOR PATIENTS; 3
	570	+	(II) PURCHASES UNDER THE F EDERAL 340B DRUG PRICING 1
	571	+	PROGRAM; AND 2
296	572
297		-	(3) PHARMACIES OPERATING IN THE STATE, INCLUDING THE IMPACT 4
298		-	ON REIMBURSEMENT RAT ES AND FINANCIAL VIA BILITY OF RETAIL AND 5
299		-	INDEPENDENT PHARMACI ES; 6
	573	+	(III) PURCHASES AND PAYOR R EIMBURSEMENTS UNDER 3
	574	+	FEDERAL PROGRAMS THA T ARE PREEMPTED BY F EDERAL LAW INCLUDING : 4
300	575
301		-	(4) PATIENT HEALTH INSURA NCE FORMULARIES , INCLUDING 7
302		-	WHETHER THE PRESCRIP TION DRUG PRODUCT SU BJECT TO THE UPPER P AYMENT 8
303		-	LIMIT REMAINED ON FO RMULARIES; 9
	576	+	1. THE DEPARTMENT OF DEFENSE; 5
304	577
305		-	(5) PROVIDER–ADMINISTERED MEDICAT IONS SUBJECT TO THE 10
306		-	UPPER PAYMENT LIMIT , INCLUDING WHETHER PR OVIDERS WERE ABLE TO ACQUIRE 11
307		-	THE PRESCRIPTION DRU G PRODUCT SUBJECT TO THE UPPER PAYMENT LI MIT AT A 12
308		-	RATE TO ACCOUNT FOR ACQUISITION COSTS AN D WHETHER THERE WAS AN IMPACT 13
309		-	ON PROVIDER REIMBURS EMENT; 14
	578	+	2. THE DEPARTMENT OF VETERANS AFFAIRS; 6
310	579
311		-	(6) PATIENT ACCESS TO THE PRESCRIPTION DRU G PRODUCT 15
312		-	SUBJECT TO THE UPPER PAYMENT LIMIT , WHICH MAY INCLUDE : 16
	580	+	3. THE PUBLIC HEALTH SERVICE; 7
313	581
314		-	(I) WHETHER PRESCRIPTION DRUG PRODUCT SHORTAG ES OR 17
315		-	OTHER SUPPLY DISRUPT IONS OCCURRED AFTER THE UPPER PAYMENT LI MIT TOOK 18
316		-	EFFECT; 19
	582	+	4. THE UNITED STATES COAST GUARD; 8
317	583
318		-	(II) WHETHER FORMULARY PLA CEMENT OR PLAN DESIGN 20
319		-	CHANGES MADE THE PRE SCRIPTION DRUG PRODU CT SUBJECT TO THE UP PER LIMIT 21
320		-	MORE DIFFICULT FOR P ATIENTS TO ACCESS , INCLUDING IF INSURAN CE PLANS 22
321		-	PREFERRED A PRESCRIP TION DRUG PRODUCT WI THOUT AN UPPER PAYME NT LIMIT 23
322		-	OVER A PRESCRIPTION DRUG PRODUCT SUB JECT TO AN UPPER PAY MENT LIMIT; 24
	584	+	5. TRICARE; 9
323	585
324		-	(III) WHETHER THE DISTRIBUT ION AND DELIVERY OF 25
325		-	SPECIALTY OR RARE DI SEASE MEDICATIONS FR OM OUT–OF–STATE PHARMACIES TO 26
326		-	PROVIDERS, PHARMACIES , OR PATIENTS WAS IMPA CTED; 27
	586	+	6. THE FEDERAL EMPLOYEES HEALTH BENEFIT PLAN; 10
	587	+	AND 11
327	588
328		-	(IV) WHETHER PATIENTS IN C OMMUNITIES OF COLOR , 28
329		-	PATIENTS WHO ARE WOMEN , PATIENTS WITH A RARE DISEASE, OR PATIENTS IN 29
330		-	RURAL AREAS EXPERIEN CED DISPROPORTIONATE ACCESS CHALLENGES ; AND 30
	589	+	7. ANY OTHER EXCLUSIVE F EDERAL PROGRAM AS 12
	590	+	APPLICABLE. 13
331	591
332		-	(V) WHETHER COST DIFFEREN CES AS A RESULT OF T HE UPPER 31
333		-	PAYMENT LIMIT AFFECT ED PATIENTS, PHARMACIES , OR PROVIDERS AND , IF THE 32
334		-	COST DIFFERENCE RESU LTED IN AN INCREASE IN COSTS, WHO WAS ULTIMATELY 33
335		-	RESPONSIBLE FOR BEAR ING THE INCREASED CO ST; 34 8 SENATE BILL 357
	592	+	SECTION 3. AND BE IT FURTHER ENACTED, That: 14
336	593
	594	+	(a) Section 2 of this Act is contingent on the Prescription Drug Affordability Board 15
	595	+	setting upper payment limits on two prescription drugs in accordance with § 21–2C–14 of 16
	596	+	the Health – General Article, as enacted by Section 1 of this Act, and each upper payment 17
	597	+	limit being in effect for 1 year. 18
337	598
	599	+	(b) Within 5 days after the conditions described in subsection (a) of this section 19
	600	+	are met, the Prescription Drug Affordability Board shall notify the Department of 20
	601	+	Legislative Services. 21
338	602
339		-	(7) COVERED ENTITY PROVID ERS PARTICIPATING IN THE 340B DRUG 1
340		-	DISCOUNT PROGRAM , INCLUDING THE IMPACT OF THE UPPER PAYMENT LIMIT ON 2
341		-	THE OPERATIONS OF THE PROVI DERS AND THEIR CONTR ACTED PHARMACIES ; AND 3
	603	+	(c) If notice is received by the Department of Legislative Services in accordance 22
	604	+	with subsection (b) of this section on or before September 31 September 30, 2030, Section 2 23
	605	+	of this Act shall take effect on the date the notice is received by the Department of 24
	606	+	Legislative Services. 25
342	607
343		-	(8) THE ~~BIOTECHNOLOGY IND USTRY IN THE STATE,~~ ~~INCLUDING THE 4~~
344		-	~~IMPACT ON PHARMACEUT ICAL RESEARCH AND DE VELOPMENT~~ , ~~INVESTMENT~~, ~~AND 5~~
345		-	~~JOB GROWTH~~ . 6
	608	+	(d) If notice is not received by the Department of Legislative Services on or before 26
	609	+	December 31 September 30, 2030, Section 2 of this Act, with no further action required by 27
	610	+	the General Assembly, shall be null and void. 28
346	611
347		-	(E) (1) THE BOARD MAY REQUEST INF ORMATION NECESSARY TO 7
348		-	COMPLETE THE REPORT REQUIRED UNDER SUBSE CTIONS (C) AND (D) OF THIS 8
349		-	SECTION FROM AN AFFE CTED ENTITY. 9
350		-
351		-	(2) THE ENTITY FROM WHICH INFORMATION WAS REQU ESTED UNDER 10
352		-	PARAGRAPH (1) OF THIS SUBSECTION S HALL MAKE A GOOD FAI TH EFFORT TO 11
353		-	PROVIDE THE REQUESTE D INFORMATION. 12
354		-
355		-	21–2C–11. 13
356		-
357		-	(a) In this section, “Fund” means the Prescription Drug Affordability Fund. 14
358		-
359		-	[(d) (1) The Board shall be established using special or general funds, which 15
360		-	shall be repaid to the State with the funds from the Fund. 16
361		-
362		-	(2) If the Board receives funding from the Maryland Health Care 17
363		-	Commission under paragraph (1) of this subsection, the Board shall repay the funds to the 18
364		-	Commission from the Fund over a 3–year period beginning June 1, 2021.] 19
365		-
366		-	21–2C–13. 20
367		-
368		-	(a) If, under § 21–2C–07 of this subtitle, the Board finds that it is in the best 21
369		-	interest of the State to establish a process for setting upper payment limits for prescription 22
370		-	drug products that it determines have led or will lead to an affordability challenge, the 23
371		-	Board, in conjunction with the Stakeholder Council, shall draft a plan of action for 24
372		-	implementing the process [that includes the criteria the Board shall use to set upper 25
373		-	payment limits] IN ACCORDANCE WITH T HE REQUIREMENTS OF T HIS SECTION. 26
374		-
375		-	(b) The criteria for setting upper payment limits shall include consideration of: 27
376		-
377		-	(1) The cost of administering the prescription drug product; 28
378		-
379		-	(2) The cost of delivering the prescription drug product to consumers; [and] 29
380		-
381		-	(3) THE EFFECT THE UPPER PAYMENT LIMIT WILL H AVE ON 30
382		-	PROVIDERS OF 340B DRUGS; 31 SENATE BILL 357 9
383		-
384		-
385		-
386		-	(4) FOR AN UPPER PAYMENT LIMIT ON A DRUG THAT IS DESIGNATED 1
387		-	AS A DRUG FOR A RARE DISEASE OR CONDITION , THE IMPACT OF THE UP PER 2
388		-	PAYMENT LIMIT ON PAT IENTS WITH RARE DISE ASES; AND 3
389		-
390		-	[(3)] (4) (5) Other relevant administrative costs related to the prescription 4
391		-	drug product. 5
392		-
393		-	[(c) The process for setting upper payment limits shall: 6
394		-
395		-	(1) Prohibit the application of an upper payment limit for a prescription 7
396		-	drug product that is on the federal Food and Drug Administration prescription drug 8
397		-	shortage list; and 9
398		-
399		-	(2) Require the Board to: 10
400		-
401		-	(i) Monitor the availability of any prescription drug product for 11
402		-	which it sets an upper payment limit; and 12
403		-
404		-	(ii) If there becomes a shortage of the prescription drug product in 13
405		-	the State, reconsider or suspend the upper payment limit.] 14
406		-
407		-	(C) (1) IF THE BOARD PREVIOUSLY SET AN UPPER PAYMENT LIM IT FOR A 15
408		-	DRUG THAT BECOMES A CURRENT SHORTAGE , THE BOARD MAY RECONSIDER THE 16
409		-	PREVIOUSLY SET UPPER PAYMENT LIMIT . 17
410		-
411		-	(2) THE BOARD MAY NOT : 18
412		-
413		-	(I) ESTABLISH APPLY A NEW UPPER PAYMENT LIMIT FOR TO A 19
414		-	DRUG IN A CURRENT SHORTAGE ; 20
415		-
416		-	(II) ENFORCE AN UPPER PAYM ENT LIMIT AGAINST PR OVIDER 21
417		-	OR PHARMACY REIMBURS EMENT REQUIREMENTS F OR MEDICARE PART C OR PART 22
418		-	D PLANS; OR 23
419		-
420		-	(III) COUNT A PHARMACY DISP ENSING FE E TOWARD OR 24
421		-	SUBJECT A PHARMACY D ISPENSING FEE TO AN UPPER PAYMENT LIMIT . 25
422		-
423		-	(d) (1) If a plan of action is drafted under subsection (a) of this section, the 26
424		-	Board shall submit the plan of action to the Legislative Policy Committee of the General 27
425		-	Assembly, in accordance with § 2–1257 of the State Government Article, for its approval. 28
426		-
427		-	(2) The Legislative Policy Committee shall have 45 days to approve the 29
428		-	plan of action. 30
429		-	10 SENATE BILL 357
430		-
431		-
432		-	(3) If the Legislative Policy Committee does not approve the plan of action, 1
433		-	the Board shall submit the plan to the Governor and the Attorney General for approval. 2
434		-
435		-	(4) The Governor and the Attorney General shall have 45 days to approve 3
436		-	the plan of action. 4
437		-
438		-	(5) The Board may not set upper payment limits unless the plan is 5
439		-	approved, in accordance with this subsection, by: 6
440		-
441		-	(i) The Legislative Policy Committee; or 7
442		-
443		-	(ii) 1. The Governor; and 8
444		-
445		-	2. The Attorney General. 9
446		-
447		-	21–2C–14. 10
448		-
449		-	[(a) If a plan of action is approved under § 21–2C–13(d) of this subtitle] IN 11
450		-	ACCORDANCE WITH THE PLAN OF ACTION APPRO VED BY THE LEGISLATIVE POLICY 12
451		-	COMMITTEE ON OCTOBER 22, 2024, the Board may set upper payment limits THROUGH 13
452		-	REGULATIONS for prescription drug products that are: 14
453		-
454		-	(1) Purchased or paid for by a unit of State or local government or an 15
455		-	organization on behalf of a unit of State or local government, including: 16
456		-
457		-	(i) State or county correctional facilities; 17
458		-
459		-	(ii) State hospitals; and 18
460		-
461		-	(iii) Health clinics at State institutions of higher education; 19
462		-
463		-	(2) Paid for through a health benefit plan on behalf of a unit of State or 20
464		-	local government, including a county, bicounty, or municipal employee health benefit plan; 21
465		-	or 22
466		-
467		-	(3) Purchased for or paid for by the Maryland State Medical Assistance 23
468		-	Program. 24
469		-
470		-	[(b) The upper payment limits set under subsection (a) of this section shall: 25
471		-
472		-	(1) Be for prescription drug products that have led or will lead to an 26
473		-	affordability challenge; and 27
474		-
475		-	(2) Be set in accordance with the criteria established in regulations 28
476		-	adopted by the Board. 29
477		-	SENATE BILL 357 11
478		-
479		-
480		-	(c) (1) The Board shall: 1
481		-
482		-	(i) Monitor the availability of any prescription drug product for 2
483		-	which it sets an upper payment limit; and 3
484		-
485		-	(ii) If there becomes a shortage of the prescription drug product in 4
486		-	the State, reconsider whether the upper payment limit should be suspended or altered. 5
487		-
488		-	(2) An upper payment limit set under subsection (a) of this section may not 6
489		-	be applied to a prescription drug product while the prescription drug product is on the 7
490		-	federal Food and Drug Administration prescription drug shortage list.] 8
491		-
492		-	[21–2C–16. 9
493		-
494		-	On or before December 1, 2026, the Board, in consultation with the Stakeholder 10
495		-	Council, shall report to the Senate Finance Committee and the House Health and 11
496		-	Government Operations Committee, in accordance with § 2–1257 of the State Government 12
497		-	Article, on: 13
498		-
499		-	(1) The legality, obstacles, and benefits of setting upper payment limits on 14
500		-	all purchases and payor reimbursements of prescription drug products in the State; and 15
501		-
502		-	(2) Recommendations regarding whether the General Assembly should 16
503		-	pass legislation to expand the authority of the Board to set upper payment limits to all 17
504		-	purchases and payor reimbursements of prescription drug products in the State.] 18
505		-
506		-	21–2C–16. 19
507		-
508		-	(A) (1) THE BOARD, IN CONSULTATION WITH THE STAKEHOLDER 20
509		-	COUNCIL, SHALL DETERMINE WHET HER, IN ADDITION TO SETTI NG UPPER PAYMENT 21
510		-	LIMITS IN ACCORDANCE WITH § 21–2C–14 OF THIS SUBTITLE , IT IS IN THE BEST 22
511		-	INTEREST OF THE STATE FOR THE BOARD TO ESTABLISH A PROCESS FOR S ETTING 23
512		-	UPPER PAYMENT LIMITS FOR ALL PURCHASES AND PAYOR REIMBURSEMENTS OF 24
513		-	PRESCRIPTION DRUG PR ODUCTS IN THE STATE THAT THE BOARD DETERMINES 25
514		-	HAVE LED OR WILL LEA D TO AN AFFORDABILIT Y CHALLENGE . 26
515		-
516		-	(2) WHEN MAKING A DETERMI NATION UNDER PARAGRA PH (1) OF 27
517		-	THIS SUBSECTION, THE BOARD SHALL CONSIDER , IF APPLICABLE: 28
518		-
519		-	(I) CONTRACT AND BUDGET D ATA PROVIDED TO THE BOARD 29
520		-	THAT DEMONSTRATES SA VINGS TO THE STATE OR LOCAL GOVERN MENTS AS A 30
521		-	RESULT OF UPPER PAYM ENT LIMITS SET IN AC CORDANCE WITH § 21–2C–14 OF THIS 31
522		-	SUBTITLE; 32
523		-	12 SENATE BILL 357
524		-
525		-
526		-	(II) SUCCESS OF SETTING UP PER PAYMENT LIMITS I N OTHER 1
527		-	STATES; AND 2
528		-
529		-	(III) EXPECTED SAVINGS FROM MEDICARE MAXIMUM FAIR 3
530		-	PRICES SET BY THE CENTERS FOR MEDICARE AND MEDICAID SERVICES. 4
531		-
532		-	(B) (1) IF THE BOARD MAKES AN AFFIRM ATIVE DETERMINATION UNDER 5
533		-	SUBSECTION (A) OF THIS SECTION , THE BOARD, IN CONSULTATION WITH THE 6
534		-	STAKEHOLDER COUNCIL, SHALL ESTABLISH A PR OCESS FOR SETTING UP PER 7
535		-	PAYMENT LIMITS FOR ALL PURCHASES AND PAYOR REIMBURSEMENTS OF 8
536		-	PRESCRIPTION DRUG PR ODUCTS IN THE STATE THAT THE BOARD DETERMINES 9
537		-	HAVE LED OR WILL LEAD TO AN AFFORDABILITY CHALLENGE . 10
538		-
539		-	(2) THE PROCESS ESTABLISH ED UNDER PARAGRAPH (1) OF THIS 11
540		-	SUBSECTION SHALL : 12
541		-
542		-	(I) TO THE EXTENT APPROPR IATE, USE THE PLAN OF ACTI ON 13
543		-	APPROVED UNDER § 21–2C–13(D) OF THIS SUBTITLE; AND 14
544		-
545		-	(II) OTHERWISE COMPLY WITH THE REQU IREMENTS FOR 15
546		-	SETTING UPPER PAYMEN T LIMITS ESTABLISHED UNDER THIS SUBTITLE . 16
547		-
548		-	(3) BEFORE ESTABLISHING A N UPPER PAYMENT LIMI T THAT APPLIES 17
549		-	TO THE MARYLAND MEDICAL ASSISTANCE PROGRAM, THE BOARD SHALL CONFER 18
550		-	WITH THE MARYLAND MEDICAL ASSISTANCE PROGRAM TO APPROVE TH E 19
551		-	APPLICATION OF THE U PPER PAYMENT LIMIT B Y ASSESSING WHETHER THE 20
552		-	PROPOSED UPPER PAYME NT LIMIT WILL: 21
553		-
554		-	(I) CONFLICT WITH THE MEDICAID DRUG REBATES 22
555		-	PROGRAM, THE COVERED OUTPATIENT DRUG RULE (CMS–2345–FC), OR ANY 23
556		-	OTHER FEDERAL REQUIREMENTS AS APPL ICABLE; AND 24
557		-
558		-	(II) REQUIRE ADDITIONAL FU NDING TO BE ALLOCATE D TO THE 25
559		-	MARYLAND MEDICAL ASSISTANCE PROGRAM BUDGET . 26
560		-
561		-	SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 27
562		-	as follows: 28
563		-
564		-	Article – Health – General 29
565		-
566		-	21–2C–16. 30
567		-
568		-	(C) (1) IF SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IF THE 31
569		-	BOARD ESTABLISHES A P ROCESS UNDER SUBSECT ION (B) OF THIS SECTION , THE 32 SENATE BILL 357 13
570		-
571		-
572		-	BOARD SHALL SET UPPER PAYMENT LIMITS FOR ALL PURCHASES AND PAYOR 1
573		-	REIMBURSEMENTS OF PR ESCRIPTION DRUG PROD UCTS IN THE STATE IN 2
574		-	ACCORDANCE WITH THE PROCESS. 3
575		-
576		-	(2) THIS SUBSECTION DOES NOT APPLY WITH RESPE CT TO: 4
577		-
578		-	(I) PAYOR REIMBURSEMENTS UNDER MEDICARE PART C AND 5
579		-	D PLANS; 6
580		-
581		-	(II) PURCHASES UNDER THE F EDERAL 340B DRUG PRICING 7
582		-	PROGRAM; AND 8
583		-
584		-	(III) PURCHASES AND PAYOR R EIMBURSEMENTS UNDER BY 9
585		-	FEDERAL AGENCIES OR FEDERAL PROGRAMS THA T ARE THE STATE IS PREEMPTED 10
586		-	FROM REGULATING BY FEDERAL LAW INCLUDING: 11
587		-
588		-	1. THE DEPARTMENT OF DEFENSE; 12
589		-
590		-	2. THE DEPARTMENT OF VETERANS AFFAIRS; 13
591		-
592		-	3. THE PUBLIC HEALTH SERVICE; 14
593		-
594		-	4. THE UNITED STATES COAST GUARD; 15
595		-
596		-	5. TRICARE; 16
597		-
598		-	6. THE FEDERAL EMPLOYEES HEALTH BENEFIT PLAN; 17
599		-	AND 18
600		-
601		-	7. ANY OTHER EXCLUSIVE F EDERAL PROGRAM AS 19
602		-	APPLICABLE. 20
603		-
604		-	SECTION 3. AND BE IT FURTHER ENACTED, That: 21
605		-
606		-	(a) Section 2 of this Act is contingent on the Prescription Drug Affordability Board 22
607		-	setting upper payment limits on two prescription drugs in accordance with § 21–2C–14 of 23
608		-	the Health – General Article, as enacted by Section 1 of this Act, and each upper payment 24
609		-	limit being in effect for 1 year. 25
610		-
611		-	(b) Within 5 days after the conditions described in subsection (a) of this section 26
612		-	are met, the Prescription Drug Affordability Board shall notify the Department of 27
613		-	Legislative Services. 28
614		-
615		-	(c) If notice is received by the Department of Legislative Services in accordance 29
616		-	with subsection (b) of this section on or before September 31 September 30, 2030, Section 2 30 14 SENATE BILL 357
617		-
618		-
619		-	of this Act shall take effect on the date the notice is received by the Department of 1
620		-	Legislative Services. 2
621		-
622		-	(d) If notice is not received by the Department of Legislative Services on or before 3
623		-	December 31 September 30, 2030, Section 2 of this Act, with no further action required by 4
624		-	the General Assembly, shall be null and void. 5
625		-
626		-	SECTION 4. AND BE IT FURTHER ENACTED, That, subject to Section 3 of this 6
627		-	Act, this Act shall take effect October 1, 2025. 7
628		-
629		-
630		-
631		-	Approved:
632		-	________________________________________________________________________________
633		-	Governor.
634		-	________________________________________________________________________________
635		-	President of the Senate.
636		-	________________________________________________________________________________
637		-	Speaker of the House of Delegates.
	612	+	SECTION 4. AND BE IT FURTHER ENACTED, That, subject to Section 3 of this 29
	613	+	Act, this Act shall take effect October 1, 2025. 30