HF 4504

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/23/2022 10:39am

A bill for an act
relating to health; modifying provisions for prescription drug price transparency;
amending Minnesota Statutes 2020, section 62J.84, as amended.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 62J.84, as amended by Laws 2021, chapter
30, article 3, sections 5 to 9, is amended to read:

62J.84 PRESCRIPTION DRUG PRICE TRANSPARENCY.

Subdivision 1.

Short title.

This section may be cited as the "Prescription Drug Price
Transparency Act."

Subd. 2.

Definitions.

(a) For purposes of this section, the terms defined in this subdivision
have the meanings given.

(b) "Biosimilar" means a drug that is produced or distributed pursuant to a biologics
license application approved under United States Code, title 42, section 262(K)(3).

(c) "Brand name drug" means a drug that is produced or distributed pursuant to:

(1) an original, new drug application approved under United States Code, title 21, section
355(c), except for a generic drug as defined under Code of Federal Regulations, title 42,
section 447.502; or

(2) a biologics license application approved under United States Code, title deleted text begin 45 deleted text end new text begin 42 new text end , section
262(a)(c).

(d) "Commissioner" means the commissioner of health.

new text begin (e) "Course of treatment" means the total dosage of a single prescription for a prescription
drug recommended by the Food and Drug Administration (FDA)-approved prescribing
label. If the FDA-approved prescribing label includes more than one recommended dosage
for a single course of treatment, the course of treatment is the maximum recommended
dosage on the FDA-approved prescribing label.
new text end

deleted text begin (e) deleted text end new text begin (f) new text end "Generic drug" means a drug that is marketed or distributed pursuant to:

(1) an abbreviated new drug application approved under United States Code, title 21,
section 355(j);

(2) an authorized generic as defined under Code of Federal Regulations, title deleted text begin 45 deleted text end new text begin 42 new text end ,
section 447.502; or

(3) a drug that entered the market the year before 1962 and was not originally marketed
under a new drug application.

deleted text begin (f) deleted text end new text begin (g) new text end "Manufacturer" means a drug manufacturer licensed under section 151.252.

new text begin (h) "National Drug Code" means the three-segment code maintained by the FDA that
includes a labeler code, a product code, and a package code for a drug product and that has
been converted to an 11-digit format consisting of five digits in the first segment, four digits
in the second segment, and two digits in the third segment. A three-segment code shall be
considered converted to an 11-digit format when, as necessary, at least one "0" has been
added to the front of each segment containing less than the specified number of digits so
that each segment contains the specified number of digits.
new text end

deleted text begin (g) deleted text end new text begin (i) new text end "New prescription drug" or "new drug" means a prescription drug approved for
marketing by the United States Food and Drug Administration for which no previous
wholesale acquisition cost has been established for comparison.

deleted text begin (h) deleted text end new text begin (j) new text end "Patient assistance program" means a program that a manufacturer offers to the
public in which a consumer may reduce the consumer's out-of-pocket costs for prescription
drugs by using coupons, discount cards, prepaid gift cards, manufacturer debit cards, or by
other means.

deleted text begin (i) deleted text end new text begin (k) new text end "Prescription drug" or "drug" has the meaning provided in section 151.441,
subdivision 8.

deleted text begin (j) deleted text end new text begin (l) new text end "Price" means the wholesale acquisition cost as defined in United States Code,
title 42, section 1395w-3a(c)(6)(B).

new text begin (m) "30-day supply" means the total daily dosage units of a prescription drug
recommended by the prescribing label approved by the FDA for 30 days. If the
FDA-approved prescribing label includes more than one recommended daily dosage, the
30-day supply is based on the maximum recommended daily dosage on the FDA-approved
prescribing label.
new text end

Subd. 3.

Prescription drug price increases reporting.

(a) Beginning January 1, 2022,
a drug manufacturer must submit to the commissioner the information described in paragraph
(b) for each prescription drug for which the price was $100 or greater for a 30-day supply
or for a course of treatment lasting less than 30 days and:

(1) for brand name drugs where there is an increase of ten percent or greater in the price
over the previous 12-month period or an increase of 16 percent or greater in the price over
the previous 24-month period; and

(2) for generic new text begin or biosimilar new text end drugs where there is an increase of 50 percent or greater in
the price over the previous 12-month period.

(b) For each of the drugs described in paragraph (a), the manufacturer shall submit to
the commissioner no later than 60 days after the price increase goes into effect, in the form
and manner prescribed by the commissioner, the following information, if applicable:

(1) the name new text begin , description, new text end and price of the drug and the net increase, expressed as a
percentage deleted text begin ; deleted text end new text begin , with the following listed separately:
new text end

new text begin (i) National Drug Code;
new text end

new text begin (ii) product name;
new text end

new text begin (iii) dosage form;
new text end

new text begin (iv) strength; and
new text end

new text begin (v) package size;
new text end

(2) the factors that contributed to the price increase;

(3) the name of any generic version of the prescription drug available on the market;

(4) the introductory price of the prescription drug new text begin when it was introduced for sale in the
United States and the price of the drug on the last day of each of the five calendar years
preceding the price increase new text end when it was approved for marketing by the Food and Drug
Administration and the net yearly increase, by calendar year, in the price of the prescription
drug during the previous five years;

(5) the direct costs incurred new text begin during the previous 12-month period new text end by the manufacturer
that are associated with the prescription drug, listed separately:

(i) to manufacture the prescription drug;

(ii) to market the prescription drug, including advertising costs; and

(iii) to distribute the prescription drug;

(6) the total sales revenue for the prescription drug during the previous 12-month period;

(7) the manufacturer's net profit attributable to the prescription drug during the previous
12-month period;

(8) the total amount of financial assistance the manufacturer has provided through patient
prescription assistance programs new text begin during the previous 12-month period new text end , if applicable;

(9) any agreement between a manufacturer and another entity contingent upon any delay
in offering to market a generic version of the prescription drug;

(10) the patent expiration date of the prescription drug if it is under patent;

(11) the name and location of the company that manufactured the drug; deleted text begin and
deleted text end

(12) if a brand name prescription drug, the ten highest prices paid for the prescription
drug during the previous calendar year in deleted text begin any country other than deleted text end new text begin the ten countries, excluding new text end
the United States deleted text begin . deleted text end new text begin , that charged the highest single price for the prescription drug; and
new text end

new text begin (13) if the prescription drug was acquired by the manufacturer during the previous
12-month period, all of the following information:
new text end

new text begin (i) price at acquisition;
new text end

new text begin (ii) price in the calendar year prior to acquisition;
new text end

new text begin (iii) name of the company from which the drug was acquired;
new text end

new text begin (iv) date of acquisition; and
new text end

new text begin (v) acquisition price.
new text end

(c) The manufacturer may submit any documentation necessary to support the information
reported under this subdivision.

Subd. 4.

New prescription drug price reporting.

(a) Beginning January 1, 2022, no
later than 60 days after a manufacturer introduces a new prescription drug for sale in the
United States that is a new brand name drug with a price that is greater than the tier threshold
established by the Centers for Medicare and Medicaid Services for specialty drugs in the
Medicare Part D program for a 30-day supply new text begin or for a course of treatment lasting less than
30 days new text end or a new generic or biosimilar drug with a price that is greater than the tier threshold
established by the Centers for Medicare and Medicaid Services for specialty drugs in the
Medicare Part D program for a 30-day supply new text begin or for a course of treatment lasting less than
30 days new text end and is not at least 15 percent lower than the referenced brand name drug when the
generic or biosimilar drug is launched, the manufacturer must submit to the commissioner,
in the form and manner prescribed by the commissioner, the following information, if
applicable:

new text begin (1) the description of the drug, with the following listed separately:
new text end

new text begin (i) National Drug Code;
new text end

new text begin (ii) product name;
new text end

new text begin (iii) dosage form;
new text end

new text begin (iv) strength; and
new text end

new text begin (v) package size
new text end

deleted text begin (1) deleted text end new text begin (2) new text end the price of the prescription drug;

deleted text begin (2) deleted text end new text begin (3) new text end whether the Food and Drug Administration granted the new prescription drug a
breakthrough therapy designation or a priority review;

deleted text begin (3) deleted text end new text begin (4) new text end the direct costs incurred by the manufacturer that are associated with the
prescription drug, listed separately:

(i) to manufacture the prescription drug;

(ii) to market the prescription drug, including advertising costs; and

(iii) to distribute the prescription drug; and

deleted text begin (4) deleted text end new text begin (5) new text end the patent expiration date of the drug if it is under patent.

(b) The manufacturer may submit documentation necessary to support the information
reported under this subdivision.

Subd. 5.

Newly acquired prescription drug price reporting.

(a) Beginning January
1, 2022, the acquiring drug manufacturer must submit to the commissioner the information
described in paragraph (b) for each newly acquired prescription drug for which the price
was $100 or greater for a 30-day supply or for a course of treatment lasting less than 30
days and:

(1) for a newly acquired brand name drug where there is an increase of ten percent or
greater in the price over the previous 12-month period or an increase of 16 percent or greater
in price over the previous 24-month period; and

(2) for a newly acquired generic drug where there is an increase of 50 percent or greater
in the price over the previous 12-month period.

(b) For each of the drugs described in paragraph (a), the acquiring manufacturer shall
submit to the commissioner no later than 60 days after the acquiring manufacturer begins
to sell the newly acquired drug, in the form and manner prescribed by the commissioner,
the following information, if applicable:

new text begin (1) the description of the drug, with the following listed separately:
new text end

new text begin (i) National Drug Code;
new text end

new text begin (ii) product name;
new text end

new text begin (iii) dosage form;
new text end

new text begin (iv) strength; and
new text end

new text begin (v) package size
new text end

deleted text begin (1) deleted text end new text begin (2) new text end the price of the prescription drug at the time of acquisition and in the calendar
year prior to acquisition;

deleted text begin (2) deleted text end new text begin (3) new text end the name of the company from which the prescription drug was acquired, the
date acquired, and the purchase price;

deleted text begin (3) deleted text end new text begin (4) new text end the year the prescription drug was introduced to market and the price of the
prescription drug at the time of introduction;

deleted text begin (4) deleted text end new text begin (5) new text end the price of the prescription drug for the previous five years;

deleted text begin (5) deleted text end new text begin (6) new text end any agreement between a manufacturer and another entity contingent upon any
delay in offering to market a generic version of the manufacturer's drug; and

deleted text begin (6) deleted text end new text begin (7) new text end the patent expiration date of the drug if it is under patent.

(c) The manufacturer may submit any documentation necessary to support the information
reported under this subdivision.

Subd. 6.

Public posting of prescription drug price information.

(a) The commissioner
shall post on the department's website, or may contract with a private entity or consortium
that satisfies the standards of section 62U.04, subdivision 6, to meet this requirement, the
following information:

(1) a list of the prescription drugs reported under subdivisions 3, 4, and 5, and the
manufacturers of those prescription drugs; and

(2) information reported to the commissioner under subdivisions 3, 4, and 5.

(b) The information must be published in an easy-to-read format and in a manner that
identifies the information that is disclosed on a per-drug basis and must not be aggregated
in a manner that prevents the identification of the prescription drug.

(c) The commissioner shall not post to the department's website or a private entity
contracting with the commissioner shall not post any information described in this section
if the information is not public data under section 13.02, subdivision 8a; or is trade secret
information under section 13.37, subdivision 1, paragraph (b); or is trade secret information
pursuant to the Defend Trade Secrets Act of 2016, United States Code, title 18, section
1836, as amended. If a manufacturer believes information should be withheld from public
disclosure pursuant to this paragraph, the manufacturer must clearly and specifically identify
that information and describe the legal basis in writing when the manufacturer submits the
information under this section. If the commissioner disagrees with the manufacturer's request
to withhold information from public disclosure, the commissioner shall provide the
manufacturer written notice that the information will be publicly posted 30 days after the
date of the notice.

(d) If the commissioner withholds any information from public disclosure pursuant to
this subdivision, the commissioner shall post to the department's website a report describing
the nature of the information and the commissioner's basis for withholding the information
from disclosure.

(e) To the extent the information required to be posted under this subdivision is collected
and made available to the public by another state, by the University of Minnesota, or through
an online drug pricing reference and analytical tool, the commissioner may reference the
availability of this drug price data from another source including, within existing
appropriations, creating the ability of the public to access the data from the source for
purposes of meeting the reporting requirements of this subdivision.

Subd. 7.

Consultation.

(a) The commissioner may consult with a private entity or
consortium that satisfies the standards of section 62U.04, subdivision 6, the University of
Minnesota, or the commissioner of commerce, as appropriate, in issuing the form and format
of the information reported under this section; in posting information pursuant to subdivision
6; and in taking any other action for the purpose of implementing this section.

(b) The commissioner may consult with representatives of the manufacturers to establish
a standard format for reporting information under this section and may use existing reporting
methodologies to establish a standard format to minimize administrative burdens to the state
and manufacturers.

Subd. 8.

Enforcement and penalties.

(a) A manufacturer may be subject to a civil
penalty, as provided in paragraph (b), for:

(1) failing to submit timely reports or notices as required by this section;

(2) failing to provide information required under this section; or

(3) providing inaccurate or incomplete information under this section.

(b) The commissioner shall adopt a schedule of civil penalties, not to exceed $10,000
per day of violation, based on the severity of each violation.

(c) The commissioner shall impose civil penalties under this section as provided in
section 144.99, subdivision 4.

(d) The commissioner may remit or mitigate civil penalties under this section upon terms
and conditions the commissioner considers proper and consistent with public health and
safety.

(e) Civil penalties collected under this section shall be deposited in the health care access
fund.

Subd. 9.

Legislative report.

(a) No later than May 15, 2022, and by January 15 of each
year thereafter, the commissioner shall report to the chairs and ranking minority members
of the legislative committees with jurisdiction over commerce and health and human services
policy and finance on the implementation of this section, including but not limited to the
effectiveness in addressing the following goals:

(1) promoting transparency in pharmaceutical pricing for the state and other payers;

(2) enhancing the understanding on pharmaceutical spending trends; and

(3) assisting the state and other payers in the management of pharmaceutical costs.

(b) The report must include a summary of the information submitted to the commissioner
under subdivisions 3, 4, and 5.