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Minnesota Legislature

Office of the Revisor of Statutes

HF 4

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 02/07/2019 04:29pm

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

Bill Text Versions

Engrossments
Introduction Posted on 02/14/2019
1st Engrossment Posted on 02/07/2019

Current Version - 1st Engrossment

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A bill for an act
relating to health; prohibiting a manufacturer or wholesale drug distributor from
charging unconscionable prices for prescription drugs; requiring the Board of
Pharmacy, the commissioner of human services, and health plan companies to
notify the attorney general of certain prescription drug price increases; authorizing
the attorney general to take action against drug manufacturers and wholesalers
related to certain price increases; imposing civil penalties;amending Minnesota
Statutes 2018, sections 8.31, subdivision 1; 151.071, subdivisions 1, 2; proposing
coding for new law in Minnesota Statutes, chapter 151.

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

Section 1.

Minnesota Statutes 2018, section 8.31, subdivision 1, is amended to read:


Subdivision 1.

Investigate offenses against provisions of certain designated sections;
assist in enforcement.

The attorney general shall investigate violations of the law of this
state respecting unfair, discriminatory, and other unlawful practices in business, commerce,
or trade, and specifically, but not exclusively,new text begin the Prohibition Against Charging
Unconscionable Prices for Prescription Drugs (section 151.462),
new text end the Nonprofit Corporation
Act (sections 317A.001 to 317A.909), the Act Against Unfair Discrimination and
Competition (sections 325D.01 to 325D.07), the Unlawful Trade Practices Act (sections
325D.09 to 325D.16), the Antitrust Act (sections 325D.49 to 325D.66), section 325F.67
and other laws against false or fraudulent advertising, the antidiscrimination acts contained
in section 325D.67, the act against monopolization of food products (section 325D.68), the
act regulating telephone advertising services (section 325E.39), the Prevention of Consumer
Fraud Act (sections 325F.68 to 325F.70), and chapter 53A regulating currency exchanges
and assist in the enforcement of those laws as in this section provided.

Sec. 2.

Minnesota Statutes 2018, section 151.071, subdivision 1, is amended to read:


Subdivision 1.

Forms of disciplinary action.

When the board finds that a licensee,
registrant, or applicant has engaged in conduct prohibited under subdivision 2, it may do
one or more of the following:

(1) deny the issuance of a license or registration;

(2) refuse to renew a license or registration;

(3) revoke the license or registration;

(4) suspend the license or registration;

(5) impose limitations, conditions, or both on the license or registration, including but
not limited to: the limitation of practice to designated settings; the limitation of the scope
of practice within designated settings; the imposition of retraining or rehabilitation
requirements; the requirement of practice under supervision; the requirement of participation
in a diversion program such as that established pursuant to section 214.31 or the conditioning
of continued practice on demonstration of knowledge or skills by appropriate examination
or other review of skill and competence;

(6) impose a civil penalty not exceeding $10,000 for each separate violation,new text begin except that
a civil penalty not exceeding $25,000 may be imposed for each separate violation of section
151.462,
new text end the amount of the civil penalty to be fixed so as to deprive a licensee or registrant
of any economic advantage gained by reason of the violation, to discourage similar violations
by the licensee or registrant or any other licensee or registrant, or to reimburse the board
for the cost of the investigation and proceeding, including but not limited to, fees paid for
services provided by the Office of Administrative Hearings, legal and investigative services
provided by the Office of the Attorney General, court reporters, witnesses, reproduction of
records, board members' per diem compensation, board staff time, and travel costs and
expenses incurred by board staff and board members; and

(7) reprimand the licensee or registrant.

Sec. 3.

Minnesota Statutes 2018, section 151.071, subdivision 2, is amended to read:


Subd. 2.

Grounds for disciplinary action.

The following conduct is prohibited and is
grounds for disciplinary action:

(1) failure to demonstrate the qualifications or satisfy the requirements for a license or
registration contained in this chapter or the rules of the board. The burden of proof is on
the applicant to demonstrate such qualifications or satisfaction of such requirements;

(2) obtaining a license by fraud or by misleading the board in any way during the
application process or obtaining a license by cheating, or attempting to subvert the licensing
examination process. Conduct that subverts or attempts to subvert the licensing examination
process includes, but is not limited to: (i) conduct that violates the security of the examination
materials, such as removing examination materials from the examination room or having
unauthorized possession of any portion of a future, current, or previously administered
licensing examination; (ii) conduct that violates the standard of test administration, such as
communicating with another examinee during administration of the examination, copying
another examinee's answers, permitting another examinee to copy one's answers, or
possessing unauthorized materials; or (iii) impersonating an examinee or permitting an
impersonator to take the examination on one's own behalf;

(3) for a pharmacist, pharmacy technician, pharmacist intern, applicant for a pharmacist
or pharmacy license, or applicant for a pharmacy technician or pharmacist intern registration,
conviction of a felony reasonably related to the practice of pharmacy. Conviction as used
in this subdivision includes a conviction of an offense that if committed in this state would
be deemed a felony without regard to its designation elsewhere, or a criminal proceeding
where a finding or verdict of guilt is made or returned but the adjudication of guilt is either
withheld or not entered thereon. The board may delay the issuance of a new license or
registration if the applicant has been charged with a felony until the matter has been
adjudicated;

(4) for a facility, other than a pharmacy, licensed or registered by the board, if an owner
or applicant is convicted of a felony reasonably related to the operation of the facility. The
board may delay the issuance of a new license or registration if the owner or applicant has
been charged with a felony until the matter has been adjudicated;

(5) for a controlled substance researcher, conviction of a felony reasonably related to
controlled substances or to the practice of the researcher's profession. The board may delay
the issuance of a registration if the applicant has been charged with a felony until the matter
has been adjudicated;

(6) disciplinary action taken by another state or by one of this state's health licensing
agencies:

(i) revocation, suspension, restriction, limitation, or other disciplinary action against a
license or registration in another state or jurisdiction, failure to report to the board that
charges or allegations regarding the person's license or registration have been brought in
another state or jurisdiction, or having been refused a license or registration by any other
state or jurisdiction. The board may delay the issuance of a new license or registration if an
investigation or disciplinary action is pending in another state or jurisdiction until the
investigation or action has been dismissed or otherwise resolved; and

(ii) revocation, suspension, restriction, limitation, or other disciplinary action against a
license or registration issued by another of this state's health licensing agencies, failure to
report to the board that charges regarding the person's license or registration have been
brought by another of this state's health licensing agencies, or having been refused a license
or registration by another of this state's health licensing agencies. The board may delay the
issuance of a new license or registration if a disciplinary action is pending before another
of this state's health licensing agencies until the action has been dismissed or otherwise
resolved;

(7) for a pharmacist, pharmacy, pharmacy technician, or pharmacist intern, violation of
any order of the board, of any of the provisions of this chapter or any rules of the board or
violation of any federal, state, or local law or rule reasonably pertaining to the practice of
pharmacy;

(8) for a facility, other than a pharmacy, licensed by the board, violations of any order
of the board, of any of the provisions of this chapter or the rules of the board or violation
of any federal, state, or local law relating to the operation of the facility;

(9) engaging in any unethical conduct; conduct likely to deceive, defraud, or harm the
public, or demonstrating a willful or careless disregard for the health, welfare, or safety of
a patient; or pharmacy practice that is professionally incompetent, in that it may create
unnecessary danger to any patient's life, health, or safety, in any of which cases, proof of
actual injury need not be established;

(10) aiding or abetting an unlicensed person in the practice of pharmacy, except that it
is not a violation of this clause for a pharmacist to supervise a properly registered pharmacy
technician or pharmacist intern if that person is performing duties allowed by this chapter
or the rules of the board;

(11) for an individual licensed or registered by the board, adjudication as mentally ill
or developmentally disabled, or as a chemically dependent person, a person dangerous to
the public, a sexually dangerous person, or a person who has a sexual psychopathic
personality, by a court of competent jurisdiction, within or without this state. Such
adjudication shall automatically suspend a license for the duration thereof unless the board
orders otherwise;

(12) for a pharmacist or pharmacy intern, engaging in unprofessional conduct as specified
in the board's rules. In the case of a pharmacy technician, engaging in conduct specified in
board rules that would be unprofessional if it were engaged in by a pharmacist or pharmacist
intern or performing duties specifically reserved for pharmacists under this chapter or the
rules of the board;

(13) for a pharmacy, operation of the pharmacy without a pharmacist present and on
duty except as allowed by a variance approved by the board;

(14) for a pharmacist, the inability to practice pharmacy with reasonable skill and safety
to patients by reason of illness, drunkenness, use of drugs, narcotics, chemicals, or any other
type of material or as a result of any mental or physical condition, including deterioration
through the aging process or loss of motor skills. In the case of registered pharmacy
technicians, pharmacist interns, or controlled substance researchers, the inability to carry
out duties allowed under this chapter or the rules of the board with reasonable skill and
safety to patients by reason of illness, drunkenness, use of drugs, narcotics, chemicals, or
any other type of material or as a result of any mental or physical condition, including
deterioration through the aging process or loss of motor skills;

(15) for a pharmacist, pharmacy, pharmacist intern, pharmacy technician, medical gas
distributor, or controlled substance researcher, revealing a privileged communication from
or relating to a patient except when otherwise required or permitted by law;

(16) for a pharmacist or pharmacy, improper management of patient records, including
failure to maintain adequate patient records, to comply with a patient's request made pursuant
to sections 144.291 to 144.298, or to furnish a patient record or report required by law;

(17) fee splitting, including without limitation:

(i) paying, offering to pay, receiving, or agreeing to receive, a commission, rebate,
kickback, or other form of remuneration, directly or indirectly, for the referral of patients;
and

(ii) referring a patient to any health care provider as defined in sections 144.291 to
144.298 in which the licensee or registrant has a financial or economic interest as defined
in section 144.6521, subdivision 3, unless the licensee or registrant has disclosed the
licensee's or registrant's financial or economic interest in accordance with section 144.6521;

(18) engaging in abusive or fraudulent billing practices, including violations of the
federal Medicare and Medicaid laws or state medical assistance laws or rules;

(19) engaging in conduct with a patient that is sexual or may reasonably be interpreted
by the patient as sexual, or in any verbal behavior that is seductive or sexually demeaning
to a patient;

(20) failure to make reports as required by section 151.072 or to cooperate with an
investigation of the board as required by section 151.074;

(21) knowingly providing false or misleading information that is directly related to the
care of a patient unless done for an accepted therapeutic purpose such as the dispensing and
administration of a placebo;

(22) aiding suicide or aiding attempted suicide in violation of section 609.215 as
established by any of the following:

(i) a copy of the record of criminal conviction or plea of guilty for a felony in violation
of section 609.215, subdivision 1 or 2;

(ii) a copy of the record of a judgment of contempt of court for violating an injunction
issued under section 609.215, subdivision 4;

(iii) a copy of the record of a judgment assessing damages under section 609.215,
subdivision 5; or

(iv) a finding by the board that the person violated section 609.215, subdivision 1 or 2.
The board shall investigate any complaint of a violation of section 609.215, subdivision 1
or 2;

(23) for a pharmacist, practice of pharmacy under a lapsed or nonrenewed license. For
a pharmacist intern, pharmacy technician, or controlled substance researcher, performing
duties permitted to such individuals by this chapter or the rules of the board under a lapsed
or nonrenewed registration. For a facility required to be licensed under this chapter, operation
of the facility under a lapsed or nonrenewed license or registration; deleted text beginand
deleted text end

(24) for a pharmacist, pharmacist intern, or pharmacy technician, termination or discharge
from the health professionals services program for reasons other than the satisfactory
completion of the programdeleted text begin.deleted text endnew text begin; and
new text end

new text begin (25) for a manufacturer or wholesale drug distributor, a violation of section 151.462.
new text end

Sec. 4.

new text begin [151.462] PROHIBITION AGAINST CHARGING UNCONSCIONABLE
PRICES FOR PRESCRIPTION DRUGS.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin The purpose of this section is to promote public health in
Minnesota by preventing unconscionable price gouging with respect to the price of essential
prescription drugs sold in Minnesota. Essential prescription drugs are a necessity. These
drugs, which are made available in this state by drug manufacturers and wholesale
distributors, provide critically important benefits to the health and well-being of Minnesota
citizens. Abuses in the pricing of various essential prescription drugs are well-documented,
jeopardize the health and welfare of the public, and have caused the death of patients who
could not afford to pay an unconscionable price for these drugs. For example, these price
gouging practices have created a public health catastrophe in Minnesota regarding the sale
of insulin, an essential prescription drug for the treatment of more than 320,000 people
residing in Minnesota who are diabetic. This section is intended to address such abuses, but
allow drug manufacturers and wholesale drug distributors a fair rate of return with respect
to their sale of essential prescription drugs in the state of Minnesota.
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 following definitions apply.
new text end

new text begin (b) "Essential prescription drug" means a patented (including an exclusivity-protected
drug), off-patent, or generic drug prescribed by a practitioner that:
new text end

new text begin (1) is covered under the medical assistance program or by any Medicare Part D plan
offered in the state of Minnesota; or
new text end

new text begin (2) has been designated by the commissioner of human services under subdivision 4 as
an essential medicine due to its efficacy in treating a life-threatening health condition or a
chronic health condition that substantially impairs an individual's ability to engage in
activities of daily living, and for which:
new text end

new text begin (i) a 30-day supply of the maximum recommended dosage of the drug for any indication,
according to the label for the drug approved under the Federal Food, Drug, and Cosmetic
Act, would cost more than $80 at the drug's wholesale acquisition cost;
new text end

new text begin (ii) a full course of treatment with the drug, according to the label for the drug approved
under the Federal Food, Drug, and Cosmetic Act, would cost more than $80 at the drug's
wholesale acquisition cost; or
new text end

new text begin (iii) if the drug is made available to consumers only in quantities that do not correspond
to a 30-day supply, a full course of treatment, or a single dose, it would cost more than $80
at the drug's wholesale acquisition cost to obtain a 30-day supply or a full course of treatment.
new text end

new text begin Essential prescription drug also includes a patented or off-patent drug-device combination
product, whose wholesale acquisition cost is more than $80, and which is used at least in
part for delivery of a drug described in this paragraph.
new text end

new text begin (c) "Health plan company" has the meaning provided in section 62Q.01, subdivision 4.
new text end

new text begin (d) "Unconscionable price" means a price that:
new text end

new text begin (1) is not reasonably justified by the actual cost of inventing, producing, selling, and
distributing the prescription drug, and any actual cost of an appropriate expansion of access
to the drug to promote public health; and
new text end

new text begin (2) applies to a prescription drug for which Minnesota consumers for whom the drug
has been or will be prescribed, the commissioner of human services, and health plan
companies providing medical care to Minnesota consumers, have no meaningful choice
about whether to purchase, because there is no other comparable drug sold in Minnesota at
a price that is reasonably justified by the actual cost of inventing, producing, selling, and
distributing the prescription drug, and any actual cost of an appropriate expansion of access
to the drug to promote public health.
new text end

new text begin (e) "Wholesale acquisition cost" has the meaning given in United States Code, title 42,
section 1395w-3a.
new text end

new text begin Subd. 3. new text end

new text begin Prohibition. new text end

new text begin No drug manufacturer or wholesale drug distributor shall charge
or cause to be charged in Minnesota an unconscionable price for an essential prescription
drug sold in Minnesota. It is not a violation of this section for a wholesale drug distributor
to charge a price for an essential prescription drug to be sold in Minnesota that is directly
and substantially attributable to the cost of the drug charged by the manufacturer.
new text end

new text begin Subd. 4. new text end

new text begin Commissioner of human services; list of essential prescription drugs. new text end

new text begin The
commissioner of human services, in consultation with the Formulary Committee established
under section 256B.0625, subdivision 13c, may designate essential prescription drugs beyond
those described in subdivision 2, paragraph (b), clause (1). The commissioner is exempt
from the rulemaking requirements of chapter 14 in making these designations, and section
14.386 does not apply. The commissioner shall make a list of all essential prescription drugs
available to the public on the agency website.
new text end

new text begin Subd. 5. new text end

new text begin Notification of attorney general. new text end

new text begin The Minnesota Board of Pharmacy, the
commissioner of human services, and health plan companies shall notify the attorney general
of any increase of 15 percent or more during a one-year period in the price of any essential
prescription drug sold in Minnesota.
new text end

new text begin Subd. 6. new text end

new text begin Attorney general's office to confer with drug manufacturer or distributor. new text end

new text begin In
order for the attorney general to bring an action for an alleged violation of subdivision 3
against a drug manufacturer or wholesale distributor, the attorney general must have provided
the manufacturer or wholesale distributor an opportunity to meet with the attorney general
to present any justification for the price of the essential prescription drug. This meeting
shall be in addition to any response or responses that the drug manufacturer or wholesale
distributor may make to prelitigation investigation or discovery conducted by the attorney
general pursuant to section 8.31.
new text end

new text begin Subd. 7. new text end

new text begin Private right of action. new text end

new text begin Any action brought pursuant to section 8.31, subdivision
3a, by a person injured by a violation of this section is for the benefit of the public.
new text end

new text begin Subd. 8. new text end

new text begin Severability. new text end

new text begin In accordance with section 645.20, it is the intent of the legislature
that the provisions, or any part of a provision, of this section are severable in the event any
provision, or any part of a provision, of this section is found by a court to be unconstitutional.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and,
notwithstanding any statutory or common law to the contrary, applies retroactively to any
prices charged by a drug manufacturer or drug wholesaler for essential prescription drugs
sold or distributed in Minnesota on or after July 1, 2014.
new text end