Minnesota Legislature
SF 1098
as introduced - 91st Legislature (2019 - 2020) Posted on 03/27/2019 10:51am
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A bill for an act
relating to health; establishing the Prescription Drug Price Transparency Act;
requiring a report; proposing coding for new law in Minnesota Statutes, chapter
151.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[151.80] PRESCRIPTION DRUG PRICE TRANSPARENCY ACT.
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Sections 151.80 to 151.83 shall be known as the "Prescription Drug Price Transparency
Act."
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Sec. 2.
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[151.81] DEFINITIONS.
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new text begin Subdivision 1. new text end
new text begin Applicability. new text end
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Only for purposes of sections 151.80 to 151.83, the terms
defined in this section have the meanings given.
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new text begin Subd. 2. new text end
new text begin Commissioner. new text end
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"Commissioner" means the commissioner of health.
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new text begin Subd. 3. new text end
new text begin New prescription drug. new text end
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"New prescription drug" means a prescription drug
approved for marketing by the United States Food and Drug Administration (FDA) for
which no previous wholesale acquisition cost has been established for comparison.
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new text begin Subd. 4. new text end
new text begin Patient assistance program or program. new text end
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"Patient assistance program" or
"program" means a program that a manufacturer offers to the general public in which a
consumer may reduce the out-of-pocket costs for prescription drugs paid by the consumer
by using coupons, discount cards, prepaid gift cards, manufacturer debit cards, or other
reduction in out-of-pocket costs by other means.
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new text begin Subd. 5. new text end
new text begin Prescription drug. new text end
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"Prescription drug" has the meaning provided in section
151.44, paragraph (d).
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new text begin Subd. 6. new text end
new text begin Price. new text end
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"Price" means the wholesale acquisition cost as defined in United States
Code, title 42, section 1395w-3a(c)(6)(B).
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new text begin Subd. 7. new text end
new text begin Profit. new text end
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"Profit" means the total sales revenue for a prescription drug during the
previous calendar year and the manufacturer's profit attributable to the same prescription
drug during the previous calendar year.
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Sec. 3.
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[151.83] REPORTING PRESCRIPTION DRUG PRICES.
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new text begin Subdivision 1. new text end
new text begin Applicability. new text end
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No later than October 1, 2019, a manufacturer shall report
the information described in subdivisions 2, 3, and 4 to the commissioner according to the
requirements in subdivision 2, 3, or 4 as applicable.
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new text begin Subd. 2. new text end
new text begin Prescription drug price increases reporting. new text end
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For every prescription drug
priced more than $40 for a course of therapy, whose price increases by more than ten percent
in a 12-month period or more than 16 percent in a 24-month period, the manufacturer shall
report to the commissioner at least 60 days in advance of the increase, in the form and
manner prescribed by the commissioner, the following information in a form and format
the commissioner has determined is appropriate for public display:
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(1) the wholesale acquisition cost of the drug for each of the last five calendar years, as
applicable;
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(2) the price increase as a percentage of the drug's price for each of the last five calendar
years, as applicable;
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(3) the price of the drug at its initial launch;
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(4) the factors that contributed to the price increase;
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(5) the introductory price of the prescription drug when it was approved for marketing
by the FDA;
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(6) the direct costs incurred by the manufacturer that are associated with the drug, listed
separately:
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(i) to manufacture the prescription drug;
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(ii) to market the prescription drug, including advertising costs;
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(iii) to research and develop the prescription drug;
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(iv) to distribute the prescription drug;
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(v) other administrative costs; and
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(vi) profit;
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(7) the percentage of the price spent on developing, manufacturing, and distributing the
drug;
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(8) a description of the change or improvement in the drug, if any, that necessitates the
price increase;
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(9) the total amount of financial assistance that the manufacturer has provided through
any patient prescription assistance program;
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(10) any agreement between a manufacturer and another party contingent upon any delay
in offering to market a generic version of the manufacturer's drug;
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(11) the patent expiration date of the drug if it is under patent;
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(12) the research and development costs associated with the prescription drug that were
paid using public funds;
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(13) any other information that the manufacturer deems relevant to the price increase
described in this subdivision; and
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(14) the documentation necessary to support the information reported under this
subdivision.
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new text begin Subd. 3. new text end
new text begin New prescription drug price reporting. new text end
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For every new prescription drug that
is a brand name drug that is priced over $500 for a 30-day supply or a generic name drug
that is priced over $200 for a 30-day supply, 60 days or less after a manufacturer introduces
a new prescription drug for sale in the United States, the manufacturer shall notify the
commissioner, in the form and manner prescribed by the commissioner, of all the following
information in a form and format the commissioner has determined is appropriate for public
display:
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(1) the wholesale acquisition cost of the drug;
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(2) the price of the drug at its initial launch;
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(3) the factors that contributed to the price;
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(4) the direct costs incurred by the manufacturer that are associated with that drug, listed
separately:
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(i) to manufacture the prescription drug;
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(ii) to market the prescription drug, including advertising costs;
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(iii) to research and develop the prescription drug;
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(iv) to distribute the prescription drug;
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(v) other administrative costs; and
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(vi) profit;
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(5) the percentage of the price spent on developing, manufacturing, and distributing the
drug;
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(6) the total amount of financial assistance that the manufacturer has provided through
any patient prescription assistance program;
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(7) any agreement between a manufacturer and another party contingent upon any delay
in offering to market a generic version of the manufacturer's drug;
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(8) the patent expiration date of the drug if it is under patent;
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(9) the research and development costs associated with the prescription drug that were
paid using public funds;
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(10) any other information that the manufacturer deems relevant to the price described
in this subdivision; and
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(11) the documentation necessary to support the information reported under this
subdivision.
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new text begin Subd. 4. new text end
new text begin Newly acquired prescription drug price reporting. new text end
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For every newly acquired
prescription drug that is a brand name drug that is priced over $100 for a 30-day supply or
a generic name drug that is priced over $50 for a 30-day supply, the acquiring manufacturer
shall report to the commissioner at least 60 days in advance of the acquisition, in the form
and manner prescribed by the commissioner, the following information in a form and format
the commissioner has determined is appropriate for public display:
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(1) the wholesale acquisition cost at the time of acquisition and in the calendar year prior
to acquisition;
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(2) the name of the company from which the drug was acquired, the date acquired, and
the purchase price;
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(3) the year the drug was introduced to market and the wholesale acquisition cost of the
drug at the time of introduction;
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(4) the previous five calendar years' wholesale acquisition cost of the newly acquired
brand name drug or newly acquired generic name drug;
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(5) the direct costs incurred by the manufacturer that are associated with the drug, listed
separately:
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(i) to manufacture the prescription drug;
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(ii) to market the prescription drug, including advertising costs;
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(iii) to research and develop the prescription drug;
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(iv) to distribute the prescription drug;
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(v) other administrative costs; and
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(vi) profit;
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(6) the percentage of the price projected to be spent on developing, manufacturing, and
distributing the drug;
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(7) the total amount of financial assistance that the manufacturer has provided through
any patient prescription assistance program;
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(8) any agreement between a manufacturer and another party contingent upon any delay
in offering to market a generic version of the manufacturer's drug;
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(9) the patent expiration date of the drug if it is under patent;
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(10) the research and development costs associated with the prescription drug that were
paid using public funds; and
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(11) if available, the price as determined reasonable through effectiveness measures.
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new text begin Subd. 5. new text end
new text begin Comparison data. new text end
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The commissioner may use any publicly available
prescription drug price information the commissioner deems appropriate to verify that
manufacturers have properly reported price increases as required by subdivision 2 of this
section.
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new text begin Subd. 6. new text end
new text begin Additional information requested. new text end
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After receiving the report or information
described in subdivision 2, 3, 4, or 5, the commissioner may make a written request to the
manufacturer for supporting documentation or additional information concerning the report.
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new text begin Subd. 7. new text end
new text begin Public posting of prescription drug price information. new text end
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(a) Except as provided
in paragraph (c), the commissioner shall post to the department's website 30 days before a
price change is effective the information from the manufacturer, in an easy-to-read format,
that includes all of the following information:
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(1) a list of the prescription drugs reported under subdivisions 2, 3, and 4 and the
manufacturers of those prescription drugs; and
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(2) information reported to the commissioner under subdivisions 2 to 6.
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The information shall be published in a manner that identifies the information that is disclosed
on a per-drug basis and shall not be aggregated in a manner that would not allow for
identification of the drug.
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(b) The commissioner may not post to the department's website any information described
in this section if:
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(1) the information is not public data under section 13.02, subdivision 8a; and
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(2) the commissioner determines that public interest does not require disclosure of the
information that is unrelated to the price of a prescription drug.
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(c) The commissioner shall publicly announce the posting of information required under
paragraph (a) and shall allow the public to comment on the posted information for a minimum
of 30 calendar days.
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(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.
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new text begin Subd. 8. new text end
new text begin Consultation. new text end
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The commissioner may consult with a nonprofit dedicated to
collecting and reporting health care data and the commissioner of commerce, as appropriate,
in issuing the form and format of the information reported under this section in posting
information on the department's website pursuant to subdivision 7, and in taking any other
action for the purpose of implementing this section.
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new text begin Subd. 9. new text end
new text begin Legislative report. new text end
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(a) No later than January 15, 2021, and annually on January
15 every year thereafter, the commissioner shall report to the chairs and ranking members
of the committees with jurisdiction over commerce, health and human services, and state
finance and operations on the implementation of the Prescription Drug Price Transparency
Act, including but not limited to the effectiveness in addressing the following goals:
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(1) promoting transparency in pharmaceutical pricing for the state and other payers;
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(2) enhancing understanding about pharmaceutical spending trends; and
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(3) assisting the state and other payers in management of pharmaceutical costs.
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(b) The report shall include a summary of the information reported to the commissioner
under subdivisions 2 to 7 as well as a summary of any public comments received.
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(c) The report shall include recommendations for legislative changes, if any, to reduce
the cost of prescription drugs and reduce the impact of price increases on consumers, the
Department of Corrections, the State Employee Group Insurance Program, the Department
of Human Services, and health insurance premiums in the fully insured markets.
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Sec. 4.
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[151.84] ENFORCEMENT AND PENALTIES.
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new text begin Subdivision 1. new text end
new text begin Civil monetary penalties. new text end
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A manufacturer may be subject to a civil
penalty, as provided in subdivision 2, for:
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(1) failing to submit timely reports or notices as required by section 151.83;
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(2) failing to provide information required under section 151.83;
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(3) failing to respond in a timely manner to a written request by the commissioner for
additional information under section 151.83, subdivision 6; or
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(4) providing inaccurate or incomplete information under section 151.83.
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new text begin Subd. 2. new text end
new text begin Enforcement. new text end
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(a) A manufacturer that fails to report or provide information
as required by section 151.83 may be subject to a civil penalty as provided in this section.
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(b) The commissioner shall adopt a schedule of penalties, not to exceed $10,000 per day
of violation, based on the severity of each violation.
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(c) The commissioner shall impose civil penalties under this section as provided in
section 144.99, subdivision 4.
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(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.
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(e) Civil penalties collected under this section shall be paid to the commissioner of
management and budget and deposited in the health care access fund to be made available
for people served by state public health care programs.
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