Revision: May 22, 2020, 8:29 a.m.
SB 685-FN - AS AMENDED BY THE SENATE
03/12/2020 1074s
2020 SESSION
20-2725
01/04
SENATE BILL 685-FN
SPONSORS: Sen. Feltes, Dist 15; Sen. Levesque, Dist 12; Sen. Rosenwald, Dist 13; Sen. Bradley, Dist 3; Sen. Chandley, Dist 11; Sen. Morgan, Dist 23; Sen. Watters, Dist 4; Sen. Cavanaugh, Dist 16; Sen. Fuller Clark, Dist 21; Sen. Sherman, Dist 24; Sen. Hennessey, Dist 5; Rep. Bartlett, Merr. 19; Rep. McMahon, Rock. 7; Rep. Marsh, Carr. 8; Rep. Campion, Graf. 12; Rep. Wall, Straf. 6
COMMITTEE: Commerce
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AMENDED ANALYSIS
This bill establishes a wholesale importation program for prescription drugs from Canada by or on behalf of the state. This bill requires the department of health and human services to design the program and obtain federal approval for the program. This bill also establishes the New Hampshire prescription drug competitive marketplace.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/12/2020 1074s 20-2725
01/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Wholesale Prescription Drug Importation Program. Amend RSA by inserting after chapter 126-AA the following new chapter:
CHAPTER 126-BB
WHOLESALE PRESCRIPTION DRUG IMPORTATION PROGRAM
126-BB:1 Definitions. In this chapter:
I. "Commissioner" means the commissioner of the department of health and human services.
II. "Department" means the department of health and human services.
III. "Program" means the wholesale prescription drug importation program.
126-BB:2 Design of Program: Rulemaking.
I. There is hereby established the wholesale prescription drug importation program, referred to in this chapter as the "program," to provide for the wholesale importation of prescription drugs from Canada by or on behalf of the state.
II. The department, in consultation with appropriate federal and other state agencies and interested parties, shall design the program to comply with the applicable requirements of 21 U.S.C. section 384, including requirements regarding safety and cost savings. The program design shall:
(a) Designate a state agency to become a licensed drug wholesaler or to contract with a licensed drug wholesaler in order to seek federal certification and approval, pursuant to RSA 126-BB:3, to import safe prescription drugs and provide cost savings to consumers in the state.
(b) Use prescription drug suppliers in Canada regulated under the laws of Canada or of one or more Canadian provinces, or both.
(c) Ensure that only prescription drugs that can meet the federal Food and Drug Administration's safety, effectiveness and other standards are imported by or on behalf of the state.
(d) Import only those prescription drugs expected to generate substantial cost savings for consumers in the state.
(e) Ensure that the program complies with the transaction and tracing requirements of 21 U.S.C. sections 360eee and 360eee-1 to the extent feasible and practical prior to imported prescription drugs coming into the possession of the licensed United States drug wholesaler and that the program complies fully with those federal requirements after imported prescription drugs are in the possession of the licensed drug wholesaler.
(f) Prohibit the distribution, dispensing or sale of imported prescription drugs outside of the state.
(g) Recommend a method to finance the program which will not jeopardize consumer cost savings.
(h) Include an audit function.
III. The commissioner shall adopt rules pursuant to RSA 541-A, to design the program in accordance with this chapter.
IV. The department shall submit a request for approval and certification of the program to the United States Department of Health and Human Services on or before February 1, 2021.
126-BB:3 Requirements of Program. Prior to operating the program, the state agency designated to oversee the program pursuant to this chapter shall:
I. Become a licensed drug wholesaler or enter into a contract with a licensed drug wholesaler in the state.
II. Contract with one or more distributors licensed in the state.
III. Contract with one or more licensed and regulated prescription drug suppliers in Canada.
IV. Seek the appropriate federal approvals, exemptions, or agreements, or a combination thereof, as needed to enable all covered entities enrolled in or eligible for the federal 340B Drug Pricing Program to participate in the program to the fullest extent possible without jeopardizing their eligibility for the 340B Program.
V. Consult with health insurance carriers, employers, pharmacies, pharmacists, health care providers and consumers.
VI. Develop a registration process for health insurance carriers, pharmacies and health care providers authorized to prescribe and administer prescription drugs that are willing to participate in the program.
VII. Create a publicly accessible website for listing the prices of prescription drugs to be imported under the program.
VIII. Create an outreach and marketing plan to work with health carriers, provider associations to generate public awareness of the program.
IX. Develop a 2-year audit work plan.
X. Conduct any other activity determined necessary to successfully implement and operate the program.
126-BB:4 Annual Report. Beginning November 1, 2021, and each November 1 thereafter, the department or other designated state agency shall submit an annual report to the chairperson of the health, human services and elderly affairs committee, the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the governor, and the state library relative to:
I. The prescription drugs included in the program.
II. The number of participating pharmacies, health care providers, and health insurance carriers.
III. The number of prescription drugs dispensed through the program.
IV. The estimated cost savings to consumers, health insurance carriers, employers, and the state during the previous calendar year and to date.
V. Information regarding implementation of the audit work plan and audit findings.
VI. Any other information the department, or other state agency designated to oversee the program pursuant to this chapter, deems relevant.
2 New Subdivision; New Hampshire Prescription Drug Competitive Marketplace. Amend RSA 21-I by inserting after section 95 the following new subdivision:
New Hampshire Prescription Drug Competitive Marketplace
21-I:96 Purpose and Intent. The purpose and intent of this subdivision is to authorize the commissioner of the department of administrative services, with the approval of the governor and the executive council, to establish the New Hampshire prescription drug competitive marketplace in accordance with this subdivision. The objective of this subdivision is to optimize prescription drug savings by the state of New Hampshire through the following:
I. Adoption of a dynamically competitive reverse auction process for the state health plan selection of pharmacy benefit managers (PBM).
II. Ongoing, real-time electronic review and validation of PBM claims invoices as the foundation for reconciling pharmacy bills.
III. Conduct of market checks using technology driven evaluation of the incumbent PBM’s prescription drug pricing based on benchmark comparators.
21-I:97 Definitions. In this subdivision:
I. "Department" means the department of administrative services.
II. "Pharmacy benefits manager" means a person, business, or other entity, including a wholly or partially owned or controlled subsidiary of a pharmacy benefits manager, that, pursuant to a contract with the health carrier or self-funded health benefit plan, manages the prescription drug coverage provided by the health carrier or self-funded health benefit plan, including, but not limited to, providing claims processing services for prescription drugs, performing drug utilization review, processing drug prior authorization requests, adjudication of grievances or appeals related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.
III. “PBM reverse auction” means an automated, transparent, and dynamically competitive bidding process conducted online that starts with an opening round of bids and allows qualified PBM bidders to counter-offer a lower price for as many rounds of bidding as determined by the department of administrative services or its authorized representative conducting the reverse auction for a multiple health plan prescription drug purchasing group.
IV. “Price” means the projected cost of a PBM proposal or “bid” for providing prescription drug benefits pursuant to this part, to enable “apples-to-apples” comparison of the costs of competing PBM proposals over the duration of the PBM services contract.
V. “Real-time” means within no more than 12 hours.
VI. "PBA” means a participant bidding agreement entered into by all participants in the PBM reverse auction prior to participation therein.
21-I:98 New Hampshire Prescription Drug Competitive Marketplace.
I. Notwithstanding any provision of law to the contrary, a contract for the services of a PBM for the administration of benefits under this subdivision may be procured by the department, at its sole discretion, in a transparent, online competitive process, or “PBM reverse auction” as set forth in this subdivision. If the department, acting in its discretion, opts to conduct such a process, it shall procure, through the solicitation of proposals from qualified professional services vendors, the following products and services based upon price, capabilities, and other factors as determined by the department:
(a) Technical assistance from a technology operator with respect to all of the following:
(1) Evaluating the qualifications of PBM bidders.
(2) Conducting online-automated reverse auction services to support the department or its authorized representatives in comparing the pricing for the PBM procurement.
(3) Providing related professional services.
(b) Technology platform with the required capabilities for conducting a PBM reverse auction, along with the related services of a technology operator, as described in subparagraph (a). The technology platform shall, at a minimum, possess the capacity to do the following:
(1) Conduct an automated, online, reverse auction of PBM services.
(2) Automate repricing of diverse and complex PBM prescription drug pricing proposals to enable "apples-to-apples" comparisons of the price of PBM bids utilizing 100 percent of annual prescription drug claims data available for state-funded health plans or a multiple health plan prescription drug purchasing group and using code-based classification of drugs from nationally accepted drug sources.
(3) Produce an automated report and analysis of PBM bids, including the ranking of PBM bids based on the comparative costs and qualitative aspects thereof within a 48-hour time period following the close of each round of reverse auction bidding.
(4) Perform real-time, electronic, line-by-line, claim-by-claim review of 100 percent of invoiced PBM prescription drug claims, and identify all deviations from the specific terms of the PBM services contract resulting from the reverse auction process.
(c) The contract for procurement of the technology platform and technology operator services shall not be awarded to any of the following:
(1) A vendor that is a PBM.
(2) A vendor that is a subsidiary or affiliate of a PBM.
(3) A vendor that is managed by a PBM or receives remuneration from a PBM for aggregating clients into a contractual relationship with a PBM.
(d) The vendor shall not outsource any part of the PBM reverse auction or the automated, real-time, electronic, line-by-line, claim-by-claim review of invoiced PBM prescription drug claims.
(e) With technical assistance and support provided by the technology operator, the department or its authorized representative shall specify the terms of the PBA. The terms of the PBA shall not be modified except by specific consent of the department of administrative services or its authorized representatives.
II. When and if procured, the technology platform used to conduct the reverse auction shall be repurposed over the duration of the PBM services contract as an automated pharmacy claims adjudication engine to perform real-time, electronic, line-by-line, claim-by-claim review of 100 percent of invoiced PBM prescription drug claims, and identify all deviations from the specific terms of PBM services contracts.
III. An entity may request in writing and subject to the approval of the commissioner to participate in a joint purchasing group with the state employee and retiree group insurance program for procuring for PBM services through a PBM reverse auction or otherwise. All entities participating in a joint purchasing group shall share proportionally in the cost of procurement including all support services.
IV. If the department opts, at its discretion, to conduct a transparent, online competitive PBM selection process, as set forth in this subdivision, the processes and procedures set forth in this section shall apply to prescription drug coverage in connection with the state employee health plan for benefits under this part including for state employees, retirees, spouses, and eligible dependents in accordance with the provisions of RSA 21-I:30 and any applicable collective bargaining agreements. Any other state-funded health plan or self-funded municipal employee or other local government employee health plan, public school employee health plans, operating individually or collectively, and the health plans of the university system of New Hampshire and the community college system of New Hampshire may utilize the processes and procedures set forth in this section individually or collectively or as a joint purchasing group with the state employee health plan.
V. After completion of a first PBM reverse auction by the department for the administration of benefits under the state employee health plan, and at the discretion of the department, self-funded private sector employer or multi-employer health plans with substantial participation by New Hampshire employees and their dependents may be permitted to participate in a joint purchasing pool with state employees for conduct of subsequent PBM reverse auctions provided that such participation shall comply with and shall be consistent with all applicable state and federal law and requirements of ERISA.
VI. The state employee health plan and any self-funded public or private sector health plans that may be permitted to participate with the state in a joint PBM reverse auction purchasing pool shall retain full autonomy over determination of their respective prescription drug formularies and pharmacy benefit designs and shall not be required to adopt a common drug formulary or common prescription pharmacy benefit design. Any such entity or purchasing group shall agree, before participating in the PBM reverse auction, to accept the prescription drug pricing plan that is selected through the PBM reverse auction process.
VII. Any PBM providing services to the department or a self-funded health plan as described in paragraphs IV and V, shall provide the department and the plan the complete pharmacy claims data necessary to conduct the reverse auction and carry out their administrative and management duties.
VIII. The department may adopt rules, pursuant to RSA 541-A, to implement the provisions of this subdivision.
I. Section 1 of this act shall take effect 60 days after its passage.
II. The remainder of this act shall take effect upon its passage.
20-2725
Amended 5/20/20
SB 685-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2020-1074s)
AN ACT establishing a wholesale prescription drug importation program and establishing the New Hampshire prescription drug competitive marketplace.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | Indeterminable | Indeterminable | Indeterminable |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ ] Other | |||
As of May 19, 2020, the Department of Administrative Services has not responded to a request for a fiscal note worksheet. The Department was originally contacted on March 24, 2020.
METHODOLOGY:
This bill establishes a new program to provide for the importation of prescription drugs from Canada by or on behalf of the State. The program includes various components, of which the Department of Health and Human Services assumes the following will have a fiscal impact:
The Department states that the cost of the above items is indeterminable. The Department further states that it is unable to estimate the extent to which some or all of the costs may be offset by the anticipated reduction in prescription drug prices.
In addition to the above, the bill establishes the New Hampshire Prescription Drug Competitive Marketplace, to be overseen by the Department of Administrative Services. As of May 19, 2020, the Department had not responded to a request for a fiscal note worksheet.
AGENCIES CONTACTED:
Department of Health and Human Services and Department of Administrative Services