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SF 1098

4th Engrossment - 91st Legislature (2019 - 2020) Posted on 05/16/2020 07:44am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 4th Engrossment

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A bill for an act
relating to health; establishing the Prescription Drug Price Transparency Act;
requiring drug manufacturers to submit drug price information to the commissioner
of health; providing civil penalties; requiring a report; modifying appropriations;
proposing coding for new law in Minnesota Statutes, chapter 62J.

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

Section 1.

new text begin [62J.84] PRESCRIPTION DRUG PRICE TRANSPARENCY.
new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This section may be cited as the "Prescription Drug Price
Transparency Act."
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

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

new text begin (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).
new text end

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

new text begin (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
new text end

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

new text begin (d) "Commissioner" means the commissioner of health.
new text end

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

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

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

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

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

new text begin (g) "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.
new text end

new text begin (h) "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.
new text end

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

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

new text begin Subd. 3. new text end

new text begin Prescription drug price increases reporting. new text end

new text begin (a) Beginning October 1, 2021,
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:
new text end

new text begin (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
new text end

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

new text begin (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:
new text end

new text begin (1) the name and price of the drug and the net increase, expressed as a percentage;
new text end

new text begin (2) the factors that contributed to the price increase;
new text end

new text begin (3) the name of any generic version of the prescription drug available on the market;
new text end

new text begin (4) the introductory price of the prescription drug 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;
new text end

new text begin (5) the direct costs incurred by the manufacturer that are associated with the prescription
drug, listed separately:
new text end

new text begin (i) to manufacture the prescription drug;
new text end

new text begin (ii) to market the prescription drug, including advertising costs; and
new text end

new text begin (iii) to distribute the prescription drug;
new text end

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

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

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

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

new text begin (10) the patent expiration date of the prescription drug if it is under patent;
new text end

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

new text begin (12) if a brand name prescription drug, the ten highest prices paid for the prescription
drug during the previous calendar year in any country other than the United States.
new text end

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

new text begin Subd. 4. new text end

new text begin New prescription drug price reporting. new text end

new text begin (a) Beginning October 1, 2021, 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 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
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 end

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

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

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

new text begin (i) to manufacture the prescription drug;
new text end

new text begin (ii) to market the prescription drug, including advertising costs; and
new text end

new text begin (iii) to distribute the prescription drug; and
new text end

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

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

new text begin Subd. 5. new text end

new text begin Newly acquired prescription drug price reporting. new text end

new text begin (a) Beginning October
1, 2021, 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:
new text end

new text begin (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
new text end

new text begin (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.
new text end

new text begin (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 end

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

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

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

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

new text begin (5) 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
new text end

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

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

new text begin Subd. 6. new text end

new text begin Public posting of prescription drug price information. new text end

new text begin (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:
new text end

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

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

new text begin (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.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin Subd. 7. new text end

new text begin Consultation. new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin Subd. 8. new text end

new text begin Enforcement and penalties. new text end

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

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

new text begin (2) failing to provide information required under this section; or
new text end

new text begin (3) providing inaccurate or incomplete information under this section.
new text end

new text begin (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.
new text end

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

new text begin (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.
new text end

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

new text begin Subd. 9. new text end

new text begin Legislative report. new text end

new text begin (a) No later than January 15 of each year, beginning January
15, 2022, 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:
new text end

new text begin (1) promoting transparency in pharmaceutical pricing for the state and other payers;
new text end

new text begin (2) enhancing the understanding on pharmaceutical spending trends; and
new text end

new text begin (3) assisting the state and other payers in the management of pharmaceutical costs.
new text end

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

Sec. 2. new text beginAPPROPRIATION.
new text end

new text begin (a) In fiscal year 2021, the total appropriation and the general fund appropriation to the
commissioner of health in Laws 2019, First Special Session chapter 9, article 14, section
3, subdivision 1, are reduced by $655,000.
new text end

new text begin (b) In fiscal year 2021, the general fund appropriation to the commissioner of health for
health improvement in Laws 2019, First Special Session chapter 9, article 14, section 3,
subdivision 2, is reduced by $655,000.
new text end

new text begin (c) The general fund base level adjustment for the commissioner of health for health
improvement in Laws 2019, First Special Session chapter 9, article 14, section 3, subdivision
2, paragraph (j), is increased by $98,000 in fiscal year 2022 and increased by $68,000 in
fiscal year 2023.
new text end