1 New Chapter; Prohibition Against Price Gouging for Essential Off-Patent or Generic Drugs. Amend RSA by inserting after chapter 318-E the following new chapter:

CHAPTER 318-F

PROHIBITION AGAINST PRICE GOUGING FOR ESSENTIAL OFF-PATENT OR GENERIC DRUGS

318-F:1 Definitions: In this chapter:

I. "Commissioner" means the commissioner of the department of health and human services.

II.(a) "Essential off-patent or generic drug" means any prescription drug:

(1) For which all exclusive marketing rights, if any, granted under the Federal Food, Drug, and Cosmetic Act, section 351 of the federal Public Health Service Act, and federal patent law have expired;

(2) That appears on the model list of essential medicines most recently adopted by the World Health Organization; or

(3) That has been designated by the secretary of the United States Department of Health and Human Services 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;

(4) That is actively manufactured and marketed for sale in the United States by 3 or fewer manufacturers; and

(5) That is made available for sale in New Hampshire.

(b) "Essential off-patent or generic drug" includes any drug-device combination product used for the delivery of a drug for which all exclusive marketing rights, if any, granted under the Federal Food, Drug, And Cosmetic Act, of the federal Public Health Service Act, and federal patent law have expired.

III. "Price gouging" means an unconscionable increase in the price of a prescription drug.

IV. "State health plan" means the state employees group health insurance plan under RSA 21-I.

V. "Unconscionable increase" means an increase in the price of a prescription drug that:

(a) Is excessive and not justified by the cost of producing the drug or the cost of appropriate expansion of access to the drug to promote public health; and

(b) Results in consumers for whom the drug has been prescribed having no meaningful choice about whether to purchase the drug at an excessive price because of:

(1) The importance of the drug to their health; and

(2) Insufficient competition in the market for the drug.

VI. "Wholesale acquisition cost" has the meaning stated in 42 U.S.C. section 1395W-3a.

318-F:2 Price Gouging Prohibited.

I. A manufacturer or wholesale distributor shall not engage in price gouging in the sale of an essential off-patent or generic drug.

II. It shall not be a violation of paragraph I for a wholesale distributor to increase the price of an essential off-patent or generic drug if the price increase is directly attributable to additional costs for the drug imposed on the wholesale distributor by the manufacturer of the drug.

318-F:3 Medicaid Managed Care Program. The commissioner shall notify the attorney general of any increase in the price of any essential off-patent or generic drug under the Medicaid managed care program when the price increase, by itself or in combination with other price increases:

I. Would result in an increase of 50 percent or more in the wholesale acquisition cost of the drug within the preceding one-year period; or

II. Would result in an increase of 50 percent or more in the price paid by the Medicaid managed care program for the drug within the preceding a one-year period; and

(a) 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;

(b) 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

(c) 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.

318-F:4 Statement Required; Order.

I. Upon request of the attorney general, the manufacturer of an essential off-patent or generic drug identified in a notice under RSA 318-F:2, within 45 days after the request, shall submit a statement to the attorney general:

(a)(1) Itemizing the components of the cost of producing the drug; and

(2) Identifying the circumstances and timing of any increase in materials or manufacturing costs that caused any increase in the price of the drug within the one-year period preceding the date of the price increase;

(b)(1) Identifying the circumstances and timing of any expenditures made by the manufacturer to expand access to the drug; and

(2) Explaining any improvement in public health associated with those expenditures; and

(c) Providing any other information that the manufacturer believes to be relevant to a determination of whether a violation of this chapter has occurred.

II. The attorney general may require a manufacturer or a wholesale distributor to produce any records or other documents that may be relevant to a determination of whether a violation of this chapter has occurred.

III. Upon petition of the attorney general and subject to paragraph IV, a circuit court may issue an order:

(a) Compelling a manufacturer or a wholesale distributor;

(1) To provide the statement required under paragraph I of this section; and

(2) To produce specific records or other documents requested by the attorney general under paragraph II that may be relevant to a determination of whether a violation of this chapter has occurred;

(b) Restraining or enjoining a violation of this chapter;

(c) Restoring to any consumer, including a third party payor, any money acquired as a result of a price increase that violates this chapter;

(d) Requiring a manufacturer that has engaged in price gouging in the sale of an essential off-patent or generic drug to make the drug available to participants in the state health plan or Medicaid managed care program for a period of up to one year at the price at which the drug was made available to participants in New Hampshire; and

(e) Imposing a civil penalty of up to $10,000 for each violation of this chapter.

IV. The attorney general shall not bring an action for a remedy under subparagraph III(b)-(e) unless the attorney general has provided the manufacturer or wholesale distributor an opportunity to meet with the attorney general to offer a justification for the increase in the price of the essential off-patent or generic drug.

318-F:5 Confidentiality. Any information provided by a manufacturer or a wholesale distributor to the attorney general under RSA 318-F:4 shall be considered confidential commercial information and shall not be subject to RSA 91-A unless the confidentiality of the information is waived by the manufacturer or wholesale distributor. In any action brought by the attorney general under 318-F:4 of this section, a person who is alleged to have violated this chapter shall not assert as a defense that the person did not deal directly with a consumer residing in New Hampshire.

2 Effective Date. This act shall take effect January 1, 2019.

1 New Chapter; Prohibition Against Price Gouging for Essential Off-Patent or Generic Drugs. Amend RSA by inserting after chapter 318-E the following new chapter:

CHAPTER 318-F

PROHIBITION AGAINST PRICE GOUGING FOR ESSENTIAL OFF-PATENT OR GENERIC DRUGS

318-F:1 Definitions: In this chapter:

I. "Commissioner" means the commissioner of the department of health and human services.

II.(a) "Essential off-patent or generic drug" means any prescription drug:

(1) For which all exclusive marketing rights, if any, granted under the Federal Food, Drug, and Cosmetic Act, section 351 of the federal Public Health Service Act, and federal patent law have expired;

(2) That appears on the model list of essential medicines most recently adopted by the World Health Organization; or

(3) That has been designated by the secretary of the United States Department of Health and Human Services 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;

(4) That is actively manufactured and marketed for sale in the United States by 3 or fewer manufacturers; and

(5) That is made available for sale in New Hampshire.

(b) "Essential off-patent or generic drug" includes any drug-device combination product used for the delivery of a drug for which all exclusive marketing rights, if any, granted under the Federal Food, Drug, And Cosmetic Act, of the federal Public Health Service Act, and federal patent law have expired.

III. "Price gouging" means an unconscionable increase in the price of a prescription drug.

IV. "State health plan" means the state employees group health insurance plan under RSA 21-I.

V. "Unconscionable increase" means an increase in the price of a prescription drug that:

(a) Is excessive and not justified by the cost of producing the drug or the cost of appropriate expansion of access to the drug to promote public health; and

(b) Results in consumers for whom the drug has been prescribed having no meaningful choice about whether to purchase the drug at an excessive price because of:

(1) The importance of the drug to their health; and

(2) Insufficient competition in the market for the drug.

VI. "Wholesale acquisition cost" has the meaning stated in 42 U.S.C. section 1395W-3a.

318-F:2 Price Gouging Prohibited.

I. A manufacturer or wholesale distributor shall not engage in price gouging in the sale of an essential off-patent or generic drug.

II. It shall not be a violation of paragraph I for a wholesale distributor to increase the price of an essential off-patent or generic drug if the price increase is directly attributable to additional costs for the drug imposed on the wholesale distributor by the manufacturer of the drug.

318-F:3 Medicaid Managed Care Program. The commissioner shall notify the attorney general of any increase in the price of any essential off-patent or generic drug under the Medicaid managed care program when the price increase, by itself or in combination with other price increases:

I. Would result in an increase of 50 percent or more in the wholesale acquisition cost of the drug within the preceding one-year period; or

II. Would result in an increase of 50 percent or more in the price paid by the Medicaid managed care program for the drug within the preceding a one-year period; and

(a) 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;

(b) 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

(c) 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.

318-F:4 Statement Required; Order.

I. Upon request of the attorney general, the manufacturer of an essential off-patent or generic drug identified in a notice under RSA 318-F:2, within 45 days after the request, shall submit a statement to the attorney general:

(a)(1) Itemizing the components of the cost of producing the drug; and

(2) Identifying the circumstances and timing of any increase in materials or manufacturing costs that caused any increase in the price of the drug within the one-year period preceding the date of the price increase;

(b)(1) Identifying the circumstances and timing of any expenditures made by the manufacturer to expand access to the drug; and

(2) Explaining any improvement in public health associated with those expenditures; and

(c) Providing any other information that the manufacturer believes to be relevant to a determination of whether a violation of this chapter has occurred.

II. The attorney general may require a manufacturer or a wholesale distributor to produce any records or other documents that may be relevant to a determination of whether a violation of this chapter has occurred.

III. Upon petition of the attorney general and subject to paragraph IV, a circuit court may issue an order:

(a) Compelling a manufacturer or a wholesale distributor;

(1) To provide the statement required under paragraph I of this section; and

(2) To produce specific records or other documents requested by the attorney general under paragraph II that may be relevant to a determination of whether a violation of this chapter has occurred;

(b) Restraining or enjoining a violation of this chapter;

(c) Restoring to any consumer, including a third party payor, any money acquired as a result of a price increase that violates this chapter;

(d) Requiring a manufacturer that has engaged in price gouging in the sale of an essential off-patent or generic drug to make the drug available to participants in the state health plan or Medicaid managed care program for a period of up to one year at the price at which the drug was made available to participants in New Hampshire; and

(e) Imposing a civil penalty of up to $10,000 for each violation of this chapter.

IV. The attorney general shall not bring an action for a remedy under subparagraph III(b)-(e) unless the attorney general has provided the manufacturer or wholesale distributor an opportunity to meet with the attorney general to offer a justification for the increase in the price of the essential off-patent or generic drug.

318-F:5 Confidentiality. Any information provided by a manufacturer or a wholesale distributor to the attorney general under RSA 318-F:4 shall be considered confidential commercial information and shall not be subject to RSA 91-A unless the confidentiality of the information is waived by the manufacturer or wholesale distributor. In any action brought by the attorney general under 318-F:4 of this section, a person who is alleged to have violated this chapter shall not assert as a defense that the person did not deal directly with a consumer residing in New Hampshire.

2 Effective Date. This act shall take effect January 1, 2019.