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Minnesota Legislature

Office of the Revisor of Statutes

SF 1640

as introduced - 91st Legislature (2019 - 2020) Posted on 03/25/2019 04:28pm

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

Current Version - as introduced

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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.

new text begin [151.80] PRESCRIPTION DRUG PRICE TRANSPARENCY ACT.
new text end

new text begin Sections 151.80 to 151.83 shall be known as the "Prescription Drug Price Transparency
Act."
new text end

Sec. 2.

new text begin [151.81] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin Only for purposes of sections 151.80 to 151.83, the terms
defined in this section have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

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

new text begin Subd. 3. new text end

new text begin New prescription drug. new text end

new text begin "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.
new text end

new text begin Subd. 4. new text end

new text begin Patient assistance program or program. new text end

new text begin "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.
new text end

new text begin Subd. 5. new text end

new text begin Prescription drug. new text end

new text begin "Prescription drug" has the meaning provided in section
151.44, paragraph (d).
new text end

new text begin Subd. 6. new text end

new text begin Price. new text end

new text begin "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. 7. new text end

new text begin Profit. new text end

new text begin "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.
new text end

Sec. 3.

new text begin [151.83] REPORTING PRESCRIPTION DRUG PRICES.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin 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.
new text end

new text begin Subd. 2. new text end

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

new text begin 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:
new text end

new text begin (1) the wholesale acquisition cost of the drug for each of the last five calendar years, as
applicable;
new text end

new text begin (2) the price increase as a percentage of the drug's price for each of the last five calendar
years, as applicable;
new text end

new text begin (3) the price of the drug at its initial launch;
new text end

new text begin (4) the factors that contributed to the price increase;
new text end

new text begin (5) the introductory price of the prescription drug when it was approved for marketing
by the FDA;
new text end

new text begin (6) the direct costs incurred by the manufacturer that are associated with the 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;
new text end

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

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

new text begin (v) other administrative costs; and
new text end

new text begin (vi) profit;
new text end

new text begin (7) the percentage of the price spent on developing, manufacturing, and distributing the
drug;
new text end

new text begin (8) a description of the change or improvement in the drug, if any, that necessitates the
price increase;
new text end

new text begin (9) the total amount of financial assistance that the manufacturer has provided through
any patient prescription assistance program;
new text end

new text begin (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;
new text end

new text begin (11) the patent expiration date of the drug if it is under patent;
new text end

new text begin (12) the research and development costs associated with the prescription drug that were
paid using public funds;
new text end

new text begin (13) any other information that the manufacturer deems relevant to the price increase
described in this subdivision; and
new text end

new text begin (14) the documentation necessary to support the information reported under this
subdivision.
new text end

new text begin Subd. 3. new text end

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

new text begin 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:
new text end

new text begin (1) the wholesale acquisition cost of the drug;
new text end

new text begin (2) the price of the drug at its initial launch;
new text end

new text begin (3) the factors that contributed to the price;
new text end

new text begin (4) the direct costs incurred by the manufacturer that are associated with that 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;
new text end

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

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

new text begin (v) other administrative costs; and
new text end

new text begin (vi) profit;
new text end

new text begin (5) the percentage of the price spent on developing, manufacturing, and distributing the
drug;
new text end

new text begin (6) the total amount of financial assistance that the manufacturer has provided through
any patient prescription assistance program;
new text end

new text begin (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;
new text end

new text begin (8) the patent expiration date of the drug if it is under patent;
new text end

new text begin (9) the research and development costs associated with the prescription drug that were
paid using public funds;
new text end

new text begin (10) any other information that the manufacturer deems relevant to the price described
in this subdivision; and
new text end

new text begin (11) the documentation necessary to support the information reported under this
subdivision.
new text end

new text begin Subd. 4. new text end

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

new text begin 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:
new text end

new text begin (1) the wholesale acquisition cost 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 drug was acquired, the date acquired, and
the purchase price;
new text end

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

new text begin (4) the previous five calendar years' wholesale acquisition cost of the newly acquired
brand name drug or newly acquired generic name drug;
new text end

new text begin (5) the direct costs incurred by the manufacturer that are associated with the 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;
new text end

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

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

new text begin (v) other administrative costs; and
new text end

new text begin (vi) profit;
new text end

new text begin (6) the percentage of the price projected to be spent on developing, manufacturing, and
distributing the drug;
new text end

new text begin (7) the total amount of financial assistance that the manufacturer has provided through
any patient prescription assistance program;
new text end

new text begin (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;
new text end

new text begin (9) the patent expiration date of the drug if it is under patent;
new text end

new text begin (10) the research and development costs associated with the prescription drug that were
paid using public funds; and
new text end

new text begin (11) if available, the price as determined reasonable through effectiveness measures.
new text end

new text begin Subd. 5. new text end

new text begin Comparison data. new text end

new text begin 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.
new text end

new text begin Subd. 6. new text end

new text begin Additional information requested. new text end

new text begin 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.
new text end

new text begin Subd. 7. new text end

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

new text begin (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:
new text end

new text begin (1) a list of the prescription drugs reported under subdivisions 2, 3, and 4 and the
manufacturers of those prescription drugs; and
new text end

new text begin (2) information reported to the commissioner under subdivisions 2 to 6.
new text end

new text begin 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.
new text end

new text begin (b) The commissioner may not post to the department's website any information described
in this section if:
new text end

new text begin (1) the information is not public data under section 13.02, subdivision 8a; and
new text end

new text begin (2) the commissioner determines that public interest does not require disclosure of the
information that is unrelated to the price of a prescription drug.
new text end

new text begin (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.
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. 8. new text end

new text begin Consultation. new text end

new text begin 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.
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, 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:
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 understanding about pharmaceutical spending trends; and
new text end

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

new text begin (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.
new text end

new text begin (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.
new text end

Sec. 4.

new text begin [151.84] ENFORCEMENT AND PENALTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Civil monetary penalties. new text end

new text begin A manufacturer may be subject to a civil
penalty, as provided in subdivision 2, for:
new text end

new text begin (1) failing to submit timely reports or notices as required by section 151.83;
new text end

new text begin (2) failing to provide information required under section 151.83;
new text end

new text begin (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
new text end

new text begin (4) providing inaccurate or incomplete information under section 151.83.
new text end

new text begin Subd. 2. new text end

new text begin Enforcement. new text end

new text begin (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.
new text end

new text begin (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.
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 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.
new text end