SF 2942

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 03/31/2016 08:46am

A bill for an act
relating to health; requiring cost disclosure for qualifying prescription drugs;
proposing coding for new law in Minnesota Statutes, chapter 144.

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

Section 1.

[144.7031] PRESCRIPTION DRUG COST TRANSPARENCY.

Subdivision 1.

Intent and findings.

It is the intent of the legislature to make
pharmaceutical pricing as transparent as possible. To fulfill this goal, the legislature finds
that there should be annual cost reporting on the most expensive drugs that would allow
policymakers, government agencies, and others to understand costs for these important
products.

Subd. 2.

Definitions.

(a) For purposes of this section, the following definitions apply.

(b) "Manufacturer" has the meaning provided in section 151.01, subdivision 14a.

(c) "Wholesale acquisition cost" or "WAC" means the manufacturer's list price
for a drug or biological to wholesalers or direct purchasers in the United States, not
including prompt pay or other discounts, rebates, or reductions in price, for the most
recent month for which information is available, as reported in wholesale price guides
or other publications of drug or biological pricing data.

Subd. 3.

Cost reporting for qualifying drugs.

(a) Each manufacturer of a
prescription drug, made available in Minnesota, that has a wholesale acquisition cost
(WAC) of $1,000 or more per month or per course of treatment, shall file a report with the
commissioner as provided in this subdivision on the cost for each qualifying drug.

(b) The report shall include all of the following for each qualifying drug:

(1) the total cost for the production of the drug, including all of the following:

(i) the total research and development cost paid by the manufacturer, and separately,
the total research and development cost paid by any predecessor in the development of
the drug;

(ii) the total cost of clinical trials and other regulatory costs paid by the manufacturer,
and separately, the total cost of clinical trials and other regulatory costs paid by any
predecessor in the development of the drug;

(iii) the total cost for materials, manufacturing, and administration attributable to
the drug;

(iv) the total cost paid by any entity other than the manufacturer or predecessor
for research and development, including any amount from federal, state, or other
governmental programs or any form of subsidies, grants, or other support;

(v) any other cost to acquire the drug, including the cost for the purchase of patents,
licensing, or acquisition of any corporate entity owning any rights to the drug while in
development, or all of these; and

(vi) the total marketing and advertising cost for the promotion of the drug directly
to consumers including, but not limited to, the cost associated with direct-to-consumer
coupons and the amount redeemed, total marketing and advertising cost for promotion of
the drug directly or indirectly to prescribers, and any other advertising for the drug;

(2) a cumulative annual history of average wholesale price (AWP) and WAC
increases for the drug, expressed as percentages, including the month each increase in
each category, AWP and WAC, took effect;

(3) the total profit attributable to the drug as represented in total dollars and as a
percentage of the total company profits that were derived from the sale of the drug; and

(4) the total amount of financial assistance the manufacturer has provided through
patient prescription assistance programs, if available.

(c) All of the information in paragraph (b) shall be itemized and documented by the
manufacturer and audited by a fully independent third-party auditor prior to filing.

(d) Manufacturers shall file the information required by this subdivision annually
with the commissioner on a form prescribed by the commissioner, no later than May 1,
2017, and each May 1 thereafter.

Subd. 4.

Report to the legislature.

The commissioner shall issue a report annually
to the legislature, no later than August 1, 2017, and each August 1 thereafter, summarizing
the information submitted under this section. The commissioner shall also make the report
available to the public on the agency Web site.

Subd. 5.

Advisory committee.

The commissioner shall develop the form required
by this section, and shall consult with representatives of the pharmaceutical industry,
health carriers, pharmacy benefit managers, state agencies, consumer advocates,
pharmacists, and physicians.

EFFECTIVE DATE.

This section is effective the day following final enactment.