Bill Text - SB688 (2020)

(New Title) relative to the pricing of generic prescription drugs.


Revision: Jan. 14, 2020, 4:15 p.m.

SB 688-FN - AS INTRODUCED

 

 

2020 SESSION

20-2728

01/10

 

SENATE BILL 688-FN

 

AN ACT prohibiting price gouging in the sale of prescription drugs.

 

SPONSORS: Sen. Fuller Clark, Dist 21; Sen. Rosenwald, Dist 13; Sen. Hennessey, Dist 5; Sen. Sherman, Dist 24; Rep. McMahon, Rock. 7; Rep. Bartlett, Merr. 19

 

COMMITTEE: Commerce

 

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ANALYSIS

 

This bill prohibits price gouging in the sale of prescription drugs.

 

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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

20-2728

01/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT prohibiting price gouging in the sale of prescription drugs.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  New Subparagraph; Medicaid Managed Care.  Amend RSA 126-A:5, XIX by inserting after subparagraph (k) the following new subparagraph:

(l)(1)  In this paragraph, "wholesale acquisition cost" has the same meaning as in 42 U.S.C. section 1395w-3a.

(2)  The commissioner shall notify the attorney general of an increase in the price of an essential off-patent or generic drug, as defined in RSA 126-A:81, I(c), if:

(A)  As of January 1, 2020, the increased price, alone or in combination with other price increases, would result in a price increase of 50 percent or more in the wholesale acquisition cost of the drug as compared with the wholesale acquisition price for the same drug prior to the increase or the price paid by the department for the drug prior to the price increase;

(B)  The cost of a 30-day supply of the maximum recommended dosage of the drug for any indication approved by the United States Food and Drug Administration would cost more than $80 at the wholesale acquisition cost; or

(C)  In cases in which the drug is made available to consumers only in quantities that do not correspond to a 30-day supply, a full course of treatment of the drug would exceed $80.

2  New Subdivision; Prescription Drug Pricing.  Amend RSA 126-A by inserting after section 80 the following new subdivision:

Prescription Drug Pricing

126-A:81  Prescription Drug Pricing.

I.  In this subdivision:

(a)  "Commissioner" means the commissioner of the department of health and human services.

(b)  "Essential off-patent or generic drug" means any prescription drug:

(1)  For which all exclusive marketing rights granted under the federal Food, Drug, and Cosmetic 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 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 or daily living;

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

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

(c)  "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 granted under the federal Food, Drug, and Cosmetic Act, §351 of the federal Public Health Act, and federal patent law have expired.

(d)  "Manufacture" means the production, preparation, propagation, conversion, or processing of any item regulated by this chapter, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, and includes any packaging or repackaging of the substance or labeling or relabeling of its container.  This term does not include compounding.

(e)  "Manufacturer" means every person who manufactures, a manufacturer's co-licensed partner, or a repackager.

(f)  "Price gouging" means an unconscionable increase in the price of a prescription drug.

(g)  "Unconscionable increase" means an increase in the price of a prescription drug that 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 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 the importance of the drug to their health and insufficient competition in the market for the drug.

(h)  "Wholesale distribution" means distribution of prescription drugs to persons other than consumers or patients and delivery of prescription medical devices to the ultimate user or consumer pursuant to, subject to the exemptions set forth in the federal Drug Supply Chain Security Act.

(i)  "Wholesale distributor" means any person other than a manufacturer, a manufacturer's co-licensed partner, a third-party logistics provider, or a repackager that engages in wholesale distribution.

II.(a)  No manufacturer or wholesale distributor shall engage in price gouging in the sale of an essential off-patent or generic drug.

(b)  An increase in the price of an essential off-patent or generic drug charged by a wholesale distributor shall not constitute price gouging if the increase is directly attributable to additional costs for the drug imposed on the wholesale distributor by the manufacturer.

III.  The commissioner may designate a patented drug as an essential drug for the purposes of this subdivision.  Such designation shall be based on a finding of the drug's unique efficacy in treating a life-threatening health condition or a chronic health condition that substantially impairs an individual's ability to engage in activities or daily living.  A list of all drugs identified as essential drugs for the purposes of this subdivision shall be posted on the board's Internet website.

IV.  Upon receipt of notification of suspected price gouging pursuant to this subdivision or in any other case in which the attorney general has reasonable cause to believe that any person has engaged in, is engaging in, or is about to engage in any violation of this subdivision, the attorney general may issue a civil investigative demand.

3  Effective Date.  This act shall take effect January 1, 2021.

 

LBAO

20-2728

1/7/20

 

SB 688-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT prohibiting price gouging in the sale of prescription drugs.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

 

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 Increase

Indeterminable Increase

Indeterminable Increase

Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [    ] Other

 

The Judicial Branch was originally contacted for a fiscal note worksheet on November 18, 2019, which they have not provided as of January 7, 2020.

 

METHODOLOGY:

This bill requires the commissioner of the Department of Health and Human Services to notify the Department of Justice of certain price increases for essential off-patent or generic drugs.  The bill authorizes the Department of Justice to issue a civil investigative demand upon receipt of notification of suspected price gouging or in any other case in which the Department has reasonable cause to believe that unfair price gouging has occurred or is about to occur.  The Department of Justice expects the bill to result in an increased number of investigations, with an indeterminable fiscal impact.  The Department of Health and Human Services likewise expects an indeterminable cost associated with monitoring and reporting on price increases.   

 

AGENCIES CONTACTED:

Department of Health and Human Services, Department of Justice, and Judicial Branch