Revision: Jan. 14, 2020, 4:14 p.m.
SB 687-FN - AS INTRODUCED
2020 SESSION
20-2727
10/05
SENATE BILL 687-FN
SPONSORS: Sen. Sherman, Dist 24; Sen. Morgan, Dist 23; Sen. Dietsch, Dist 9; Sen. Rosenwald, Dist 13; Sen. Fuller Clark, Dist 21; Sen. Hennessey, Dist 5; Rep. Marsh, Carr. 8; Rep. McMahon, Rock. 7; Rep. Bartlett, Merr. 19
COMMITTEE: Commerce
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ANALYSIS
This bill establishes a prescription drug affordability board to determine annual public payor spending targets for prescription drugs, develop and implement policies and procedures for the collection of prescription drug price data, implement a register of drug manufacturers for drug pricing data, and establish funding for the board by reasonable user fees and assessments.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20-2727
10/05
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; Prescription Drug Affordability Board. Amend RSA by inserting after chapter 126-AA the following new chapter:
CHAPTER 126-BB
NEW HAMPSHIRE PRESCRIPTION DRUG AFFORDABILITY BOARD
126-BB:1 Definitions. In this chapter:
I. "Board" means the New Hampshire prescription drug affordability board.
II. "Brand-name drug" means a prescription drug marketed under a proprietary name or registered trademark name, including a biological product.
III. "Generic drug" means a prescription drug, whether identified by its chemical, proprietary, or nonproprietary name, that is not a brand-name drug and is therapeutically equivalent to a brand-name drug in dosage, safety, strength, method of consumption, quality, performance, and intended use. "Generic drug" includes a biosimilar product.
IV. "Manufacturer" means a manufacturer of prescription drugs that are distributed in the state.
V. "Pricing component data" means data unique to each manufacturer, wholesale drug distributor, or pharmacy benefits manager subject to this chapter that evidences the cost to each manufacturer, wholesale drug distributor, or pharmacy benefits manager to make a prescription drug available to consumers and the payments received by each manufacturer, wholesale drug distributor, or pharmacy benefits manager to make a prescription drug available to consumers, taking into account any price concessions, and that is measured uniformly among the entities, as determined by rules adopted by the board.
VI. "Pricing unit" means the smallest dispensable amount of a prescription drug that could be dispensed.
VII. "Public payor" means any division of state, county, or municipal government that administers a health plan for its employees or an association of state, county, or municipal employers that administers a health plan for its employees.
VIII. "Wholesale acquisition cost" means a manufacturer's listed price for sale to a wholesale drug distributor or other entity that purchases a prescription drug directly from the manufacturer, not including any price concessions.
126-BB:2 New Hampshire Prescription Drug Affordability Board Established. There is established the New Hampshire prescription drug affordability board to carry out the purposes of this chapter.
I. The board shall consist of 5 members with expertise in health care economics or clinical
medicine, who shall not be, or be directly related to, anyone affiliated with, employed by, or representing the interests of a public payor, pharmaceutical or pharmacy company, pharmacy benefits management company, or health insurance provider and who have completed a conflict of interest statement. They shall be appointed as follows:
(a) Two members by the president of the senate. The president of the senate shall also appoint one alternate board member who will participate in deliberations of the board in the event a member appointed by the president of the senate elects to be recused as provided in RSA 126-BB:3.
(b) Two members by the speaker of the house of representatives. The speaker of the house of representatives shall also appoint one alternate board member who will participate in deliberations of the board in the event a member appointed by the speaker of the house of representatives elects to be recused as provided in RSA 126-BB:3.
(c) One member by the governor. The governor shall also appoint one alternate board member who shall participate in deliberations of the board in the event the member appointed by the governor elects to be recused as provided in RSA 126-BB:3.
II. Members shall be appointed to 5-year terms. Of the initial appointees, the member appointed by the governor shall serve an initial term of 5 years, one member appointed by the president of the senate and one member appointed by the speaker of the house of representatives shall serve an initial term of 4 years and one member appointed by the president of the senate and one member appointed by the speaker of the house of representatives shall serve an initial term of 3 years.
III. A majority of board members shall constitute a quorum.
IV. The chair of the board shall be elected by an affirmative vote of at least 4 of the 5 members of the board.
V. Beginning no later than March 1, 2021, the board shall meet in public session at least every 12 weeks to review prescription drug information and to make recommendations pursuant to RSA 126-BB:5. The first meeting shall be called by the first-named appointee of the senate president.
(a) Each public meeting shall be announced 2 weeks in advance, and materials for the meeting shall be made public at least one week in advance.
(b) Each public meeting shall provide opportunity for comment from the public in attendance at the meeting, and the board shall provide the opportunity for the public to submit written comments on pending decisions.
(c) The board may allow expert testimony at public meetings and any meeting conducted in executive session as permitted by subparagraph (d).
(d) Notwithstanding requirements of RSA 91-A, the board may meet in executive session, except that any decision of the board shall be made in public.
VI. The board shall be administratively attached to the department of health and human services. The board may employ an executive director who shall be a classified employee.
126-BB:3 Conflicts of Interest. The following provisions govern any conflict of interest for a member of the board, a member of the advisory council established in RSA 126-BB:4 or any staff member or contractor of the board.
I. When appointing a member of the board or the advisory council, the appointing authority shall consider any conflict of interest disclosed by the prospective member. A member shall elect to be recused from any board activity in the case in which the member or an immediate family member of the member has a conflict of interest. For the purposes of this paragraph, "conflict of interest" means an association, including a financial or personal association, that has the potential to bias or have the appearance of biasing an individual's decisions in matters related to the board or the conduct of the board's activities.
II. A board member or staff or contractor of the board with a conflict of interest shall elect to be recused. For purposes of this paragraph, "conflict of interest" means any instance in which a member of the board or an immediate family member of the member has received or could receive either of the following:
(a) A direct financial benefit of any amount deriving from the results or findings of a study or determination by or for the board; or
(b) A financial benefit from individuals or companies that own or manufacture prescription drugs, services, or items to be studied by the board that in the aggregate exceeds $5,000 per year. For purposes of this subparagraph, “financial benefit" includes honoraria, fees, stock, or other financial benefit and the current value of the member's or immediate family member's already existing stock holdings, in addition to any direct financial benefit deriving from the results or findings conducted under this section.
(c) A conflict of interest shall be disclosed in the following manner:
(1) By the board in the employment of board senior staff.
(2) By the governor, president of the senate, or speaker of the house of representatives when appointing members to the board and advisory council.
(3) By the board in describing any recusals as part of any final decision relating to a prescription drug.
(4) By the 5th day after a conflict is identified or, if a public meeting of the board will occur within that 5-day period, in advance of the public meeting.
(d) Conflicts of interest shall be publicly posted on the website of the board. The information disclosed shall include the type, nature, and magnitude of the interests of the individual involved, except to the extent that the individual elects to be recused from participation in any activity with respect to which the potential conflict exists.
(e) The board, the advisory council, a member of the board or staff, or a contractor of the board may not accept gifts, bequests, or donations of services or property that suggest a conflict of interest or have the appearance of creating bias in the work of the board or advisory council.
(f) A member of the advisory council who accepts a gift, bequest, or donation of services or property that suggests a conflict of interest or has the appearance of creating bias in the work of the advisory council shall disclose the gift, bequest, or donation publicly.
126-BB:4 Advisory Council. A 12-member advisory council is established to advise the board on establishing annual spending targets pursuant to RSA 126-BB:5, I and determining methods for meeting those spending targets pursuant to RSA 126-BB:5, III. The advisory council shall consist of the following members:
I. The governor, or designee.
II. The commissioner of the department of administrative services, or designee.
III. The commissioner of the department of corrections, or designee.
IV. The commissioner of department of health and human services, or designee.
V. The attorney general, or designee.
VI. The director of the division of risk and benefits, department of administrative services, or designee.
VII. The president of the New Hampshire State Employees Association, or designee.
VIII. The president of the New Hampshire Education Association, or designee.
IX. The executive director of the New Hampshire Municipal Association or designee.
X. The chancellor of the university system of New Hampshire, or designee.
XI. The chancellor of the New Hampshire community college system, or designee.
XII. A representative of consumer interests, appointed by the governor, who shall serve a 3-year term.
126-BB:5 Powers and Duties of the Board. The board has the following powers and duties:
I.(a) Beginning for the year 2022 and in consultation with the advisory council the board shall determine annual spending targets for prescription drugs purchased by public payors based upon a 10-year rolling average of the medical care services component of the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index, medical care services index, plus a reasonable percentage for inflation and minus a spending target for pharmacy savings as determined by the board.
(b) The board shall determine spending targets on specific prescription drugs that may cause affordability challenges to enrollees in a public payor health plan.
(c) The board shall determine which public payors are likely to exceed the spending targets determined under subparagraph (a).
II. The board may consider the following data to accomplish its duties under this section:
(a) A public payor's prescription drug spending data, which the 3rd-party administrator or insurer for the public payor's health plan shall provide to the board on behalf of the public payor upon request notwithstanding any provision of law to the contrary, including:
(1) Expenditures and utilization data for prescription drugs for each plan offered by a public payor.
(2) The formulary for each plan offered by a public payor and prescription drugs common to each formulary.
(3) Pharmacy benefit management services and other administrative expenses of the prescription drug benefit for each plan offered by a public payor.
(4) Enrollee cost sharing for each plan offered by a public payor.
(b) Data compiled by the department of health and human services. Prescription drug spending data provided to the board under this subparagraph is confidential to the same extent it is confidential while in the custody of the entity that provided the data to the board.
III. Based upon the prescription drug spending data received under paragraph II, the board, in consultation with a representative of each public payor shall determine methods for the public payor to meet the spending targets established under paragraph I. The board shall determine whether the following methods reduce costs to individuals purchasing prescription drugs through a public payor and allow public payors to meet the spending targets established under paragraph I:
(a) Negotiating specific rebate amounts on the prescription drugs that contribute most to spending that exceeds the spending targets.
(b) Changing a formulary when sufficient rebates cannot be secured under subparagraph (a).
(c) Changing a formulary with respect to all of the prescription drugs of a manufacturer within a formulary when sufficient rebates cannot be secured under subparagraph (a).
(d) Establishing a common prescription drug formulary for all public payors.
(e) Prohibiting health insurance carriers in the state from offering on their formularies a prescription drug or any of the prescription drugs manufactured by a particular manufacturer when the methods described in subparagraph (b) or (c) are implemented.
(f) Purchasing prescription drugs in bulk or through a single purchasing agreement for use among public payors.
(g) Collaborating with other states and state prescription drug purchasing consortia to purchase prescription drugs in bulk or to jointly negotiate rebates.
(h) Allowing health insurance carriers providing coverage to small businesses and individuals in the state to participate in the public payor prescription drug benefit for a fee.
(i) Procuring common expert services for public payor, including but not limited to pharmacy benefit management services and actuarial services.
(j) Any other method the board may determine.
IV. The board shall report its recommendations, including prescription drug spending targets, and the progress of implementing those recommendations, to the standing committees of the general court with jurisdiction over health coverage and insurance matters and to the governor no later than October 1, 2020 and each January 30 thereafter.
V. By December 1, 2020 and annually thereafter, the board shall provide a report to the standing committees of the general court with jurisdiction over health coverage and insurance matters and to the governor containing the following information about prescription drugs, both brand name and generic:
(a) The 25 most frequently prescribed drugs in the state;
(b) The 25 costliest drugs as determined by the total amount spent on those drugs in the state; and
(c) The 25 drugs with the highest year-over-year cost increases as determined by the total amount spent on those drugs in the state.
VI. The board may apply for and receive funds, grants, or contracts from public and private sources.
126-BB:6 Rulemaking. The board shall adopt rules under RSA 541-A for the following:
I. Procedures for drug price transparency as required under RSA 126-BB:7.
II. The adoption of all fees under RSA 126-BB:9.
III. Any other matter required to implement this chapter.
126-BB:7 Drug Price Transparency.
I. The board shall develop and implement policies and procedures for the collection, processing, storage, and analysis of clinical, financial, quality restructuring and prescription drug price data for the following purposes:
(a) To use, build, and improve upon and coordinate existing data sources and measurement efforts through the integration of data systems and standardization of concepts.
(b) To coordinate the development of a linked public and private sector information system.
(c) To emphasize data that is useful, relevant, and not duplicative of existing data.
(d) To minimize the burden on those providing data.
(e) To preserve the reliability, accuracy, and integrity of collected data while ensuring that the data is available in the public domain.
II. The board shall adopt rules to ensure that:
(a) Payors, providers, prescription drug manufacturers, wholesale drug distributors, and pharmacy benefits managers file data as required by paragraph I.
(b) Users that obtain health data and information from the board safeguard the identification of patients and health care practitioners.
(c) Payors, providers, prescription drug manufacturers, wholesale drug distributors, and pharmacy benefits managers pay all assessments as required by RSA 126-BB:8.
126-BB:8 Funding; Assessment of Fees.
I. The expenses and cost of operation of the board shall be funded by reasonable user fees and assessments determined in rules adopted by the board.
(a) Fees may be charged for the reasonable costs of duplicating, mailing, publishing, and supplies.
(b) Reasonable user fees shall be charged on a sliding scale for the right to access and use the health data and information available from the board. Fees may be charged for services provided to the department on a contractual basis. Fees may be reduced or waived for users that demonstrate a plan to use the data or information in research of general value to the public health or inability to pay the scheduled fees, as provided by rules adopted by the board.
(c) Annual assessments of not less than $100 assessed against the following entities:
(1) Nonprofit hospital and medical service organizations.
(2) Health insurance carriers and health maintenance organizations on the basis of the total annual health care premium.
(3) Third-party administrators.
(4) Health carriers that provide only administrative services for a plan sponsor.
(5) Pharmacy benefits managers that process and pay claims on the basis of claims processed or paid for each plan sponsor.
(d) Health care policies issued for specified disease, accident, injury, hospital indemnity, disability, long-term care or other limited benefit health insurance policies are not subject to assessment under subparagraph (c). For purposes of this paragraph, policies issued for dental services are not considered to be limited benefit health insurance policies. The total dollar amount of assessments under this subparagraph shall equal the assessments under subparagraph (e).
(e) Annual assessments of not less than $100 assessed by the board against providers. The assessments are to be determined on an annual basis by the board. The total dollar amount of assessments under this subparagraph shall equal the assessments under subparagraph (d).
(f) Annual assessments of $500 assessed by the board against prescription drug manufacturers, wholesale drug distributors, and pharmacy benefits managers.
II. The aggregate level of annual assessments under subparagraphs (c), (e) and (f) shall be an amount sufficient to meet the board's expenditures authorized. The board may waive assessments otherwise due under subparagraphs (c), (d) and (f) when a waiver is determined to be in the interests of the board and the parties to be assessed.
126-BB:9 Drug Price Notifications and Disclosures; Confidentiality; Registration.
I. No later than January 30, 2021 and annually thereafter, a manufacturer shall notify the board when the manufacturer has during the prior calendar year:
(a) Increased the wholesale acquisition cost of a brand-name drug by more than 20 percent per pricing unit;
(b) Increased the wholesale acquisition cost of a generic drug that costs at least $10 per pricing unit by more than 20 percent per pricing unit; or
(c) Introduced a new drug for distribution in this state when the wholesale acquisition cost is greater than the amount that would cause the drug to be considered a specialty drug under the Medicare Part D program. For the purposes of this section, "Medicare Part D" means prescription drug benefit in accordance with the requirements of the federal Medicare Prescription Drug Improvement and Modernization Act of 2003.
II. Within 60 days of a request from the board relating to a specific prescription drug, a manufacturer, wholesale drug distributor, or pharmacy benefits manager shall notify the board of pricing component data per pricing unit of a drug.
III. Information provided to the board as required by this section by a manufacturer, wholesale drug distributor, or pharmacy benefits manager is confidential and not a public record under RSA 91-A, except that the board may share information:
(a) With the insurance department, to the extent necessary for the department to enforce insurance laws, as long as any information shared is kept confidential; and
(b) In the aggregate, as long as it is not released in a manner that allows the identification of an individual drug or manufacturer, wholesale drug distributor, or pharmacy benefits manager.
IV. Beginning January 1, 2021, a manufacturer and wholesale drug distributor subject to this section shall register annually with the board in a manner prescribed by the board.
V. A manufacturer, wholesale drug distributor, or pharmacy benefits manager that submits a notification or report to the board pursuant to this section shall submit with the notification or report a signed written certification of the notification's or report's accuracy.
VI.(a) The board may audit the data submitted by a manufacturer, wholesale drug distributor, or pharmacy benefits manager pursuant to this section. The manufacturer, wholesale drug distributor, or pharmacy benefits manager shall pay for the costs of the audit.
(b) The board may require a manufacturer, wholesale drug distributor, or pharmacy benefits manager subject to this section to develop a corrective action plan to correct any deficiencies the board finds with the manufacturer's, wholesale drug distributor's, or pharmacy benefits manager's compliance with this section.
(c) A manufacturer, wholesale drug distributor, or pharmacy benefits manager that violates this section commits a civil violation for which a fine of up to $30,000 may be imposed for each day of the violation.
VII. Beginning November 1, 2021 and annually thereafter, the board shall produce and post on its publicly accessible website an annual report, including information developed from the notifications and disclosures received pursuant to this section on trends in the cost of prescription drugs, analysis of manufacturer prices and price increases, the major components of prescription drug pricing along the supply chain and the impacts on insurance premiums and cost sharing, and any other information the board determines is relevant to providing greater consumer awareness of the factors contributing to the cost of prescription drugs in the state. The report may not disclose information attributable to any particular manufacturer, wholesale drug distributor, or pharmacy benefits manager subject to this section and may not make public any information that is confidential. The board shall submit the report required by this section to the standing committees of the general court with jurisdiction over health data reporting and prescription drug matters and the governor.
126-BB:10 Civil Penalties. When a person or entity that is a health care facility payor, prescription drug manufacturer, wholesale drug distributor, or pharmacy benefits manager violates any requirement of this chapter, that person or entity commits a civil violation for which a fine of not more than $1,000 per day may be imposed. A fine imposed under this paragraph may not exceed $25,000 for any one occurrence.
2 Effective Date. This act shall take effect July 1, 2020.
20-2727
1/7/20
SB 687-FN- FISCAL NOTE
AS INTRODUCED
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 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Funding Source: | [ ] General [ ] Education [ ] Highway [ X ] Other - User fees and assessments. | |||
METHODOLOGY:
This bill establishes a new chapter, RSA 126-BB, creating the New Hampshire Prescription Drug Affordability Board, to be administratively attached to the Department of Health and Human Services. Among other things, the bill:
In addition, the bill allows the Board to retain an executive director, and establishes that the Board shall be funded by user fees and assessments. With respect to staffing costs, the bill does not specify a labor grade or salary range for the executive director position. If it is assumed that the position is established as an unclassified grade EE (as is, for example, the executive director of the Governor's Commission on Disability, salary and benefits will range from $100,000 at the low end of the pay scale to $132,000 at the high end, to be funded by user fees and assessments. The Department of Health and Human Services states that the Board's proposed responsibilities will have no fiscal impact on the Department. However, to the extent that the Department is subject to user fees imposed by the Board, it may incur an indeterminable increase in expenditures.
AGENCIES CONTACTED:
Department of Health and Human Services