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7 LONG TITLE
8 General Description:
9 This bill creates a program and reporting requirements relating to prescription drugs
10 and the importation of prescription drugs.
11 Highlighted Provisions:
12 This bill:
13 ▸ defines terms;
14 ▸ requires the Department of Health to:
15 • design a prescription drug importation program;
16 • apply for approval of the prescription drug importation program;
17 • if the program is approved, implement the provisions of the program; and
18 • if approval is denied, study how the state can obtain approval for the program;
19 ▸ describes the requirements of the prescription drug importation program;
20 ▸ requires pharmaceutical manufacturers to provide information to the state about
21 certain price increases for prescription drugs;
22 ▸ modifies the Utah Antitrust Act to make certain anticompetitive activities illegal;
23 and
24 ▸ creates a sunset date for the provisions of this bill.
25 Money Appropriated in this Bill:
26 None
27 Other Special Clauses:
28 None
29 Utah Code Sections Affected:
30 AMENDS:
31 63I-1-226, as last amended by Laws of Utah 2017, Chapters 177 and 443
32 63I-1-276, as enacted by Laws of Utah 2014, Chapter 226
33 76-10-3104, as renumbered and amended by Laws of Utah 2013, Chapter 187
34 ENACTS:
35 26-62-101, Utah Code Annotated 1953
36 26-62-102, Utah Code Annotated 1953
37 26-62-201, Utah Code Annotated 1953
38 26-62-202, Utah Code Annotated 1953
39 26-62-301, Utah Code Annotated 1953
40 26-62-302, Utah Code Annotated 1953
41 26-62-303, Utah Code Annotated 1953
42 26-62-304, Utah Code Annotated 1953
43 26-62-305, Utah Code Annotated 1953
44 26-62-401, Utah Code Annotated 1953
45 26-62-402, Utah Code Annotated 1953
46
47 Be it enacted by the Legislature of the state of Utah:
48 Section 1. Section 26-62-101 is enacted to read:
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51 26-62-101. Title.
52 This chapter is known as the "Prescription Drug Affordability Act."
53 Section 2. Section 26-62-102 is enacted to read:
54 26-62-102. Definitions.
55 As used in this chapter:
56 (1) "Drug" means the same as that term is defined in Section 58-17b-102.
57 (2) "Health insurer" means:
58 (a) an insurer who offers health care insurance as that term is defined in Section
59 31A-1-301;
60 (b) for health benefits offered to state employees under Section 49-20-202, the Public
61 Employees' Benefit and Insurance Program created in Section 49-20-103; or
62 (c) a workers' compensation insurer:
63 (i) authorized to provide workers' compensation insurance in the state; or
64 (ii) that is a self-insured employer as defined in Section 34A-2-201.5.
65 (3) "Pharmaceutical manufacturer" means:
66 (a) a person that is engaged in the manufacturing of drugs or pharmaceutical devices
67 that are available for purchase by residents of the state; or
68 (b) a person that is responsible for setting the price of a drug or device that is available
69 for purchase by residents of the state on behalf of a person described in this Subsection (3).
70 (4) "Prescription drug importation program" means the Canadian Prescription Drug
71 Importation Program established under Section 26-62-301.
72 (5) "Secretary" means the secretary of the United States Department of Health and
73 Human Services.
74 Section 3. Section 26-62-201 is enacted to read:
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76 26-62-201. Application for approval of prescription drug importation program
77 and certification of Canadian drug importation.
78 (1) The department shall submit to the secretary:
79 (a) no later than July 31, 2018, a brief letter of intent to seek approval for a program to
80 allow for the importation of prescription drugs from Canada into the state under the provisions
81 of 21 U.S.C. Sec. 384(l); and
82 (b) no later than December 31, 2018, an application for:
83 (i) the approval of a program to allow for the importation of prescription drugs from
84 Canada into the state under the provisions of 21 U.S.C. Sec. 384(l); and
85 (ii) certification by the secretary to the United States Congress, in accordance with 21
86 U.S.C. Sec. 384(l), that importation of Canadian prescription drugs will:
87 (A) pose no additional risk to the public's health and safety; and
88 (B) result in a significant reduction in the cost of covered products to the American
89 consumer.
90 (2) The application described in Subsection (1)(b) shall contain:
91 (a) the findings of the prescription drug importation study described in Section
92 26-62-202;
93 (b) a description of the prescription drug importation program designed by the
94 department in accordance with the provisions of this chapter, including measures that will be
95 taken to:
96 (i) comply with existing state and federal law; and
97 (ii) reduce the risk to the public's health and safety; and
98 (c) an estimate of the reduction in the cost of covered products and health insurance
99 premiums to Utah consumers.
100 (3) If the department does not believe that the department will be able to submit the
101 application described in Subsection (1)(b) before December 31, 2018, the department shall
102 report to the Health and Human Services Interim Committee before December 31, 2018, on:
103 (a) the reason for the delay in submitting the application;
104 (b) any steps that the department has taken to prepare the application; and
105 (c) when the department believes that the application will be ready for submission.
106 (4) If the application for the prescription drug importation program is not approved by
107 the secretary, the department shall submit a new application in accordance with the
108 requirements in Subsection (2) on or before December 1 of each year until the earlier of:
109 (a) approval of the prescription drug importation program by the secretary; or
110 (b) January 1, 2023.
111 (5) On or before December 1 of each year that the department submits an application
112 under Subsection (2) or (4), the department shall submit a written report to the Health and
113 Human Services Interim Committee regarding the results of the application and any updated
114 findings and recommendations.
115 Section 4. Section 26-62-202 is enacted to read:
116 26-62-202. Prescription drug importation study.
117 (1) As funding is available, the department shall study how to gain approval by the
118 secretary for the state to import certain prescription drugs from Canada for eventual use by
119 Utah consumers.
120 (2) The study described in Subsection (1) shall include:
121 (a) a plan for operating the prescription drug importation program;
122 (b) a plan to ensure that prescription drugs imported into the state under the
123 prescription drug importation program meet applicable United States federal and state
124 standards for safety and effectiveness;
125 (c) examples of prescription drugs with the highest potential for consumer savings
126 through importation at the time of the study;
127 (d) an estimate of the total potential consumer savings attributable to importation of
128 prescription drugs;
129 (e) potential wholesalers with whom the state could contract to distribute imported
130 prescription drugs;
131 (f) proposed amendments to state law to facilitate importation by the state; and
132 (g) in coordination with the Office of the Attorney General, proposed amendments to
133 state law to inhibit pharmaceutical manufacturers from manipulating the pharmaceutical
134 market in the state or adversely affecting consumer access to pharmaceuticals under the
135 prescription drug importation program.
136 (3) The department shall consult with the Utah State Board of Pharmacy,
137 representatives of the pharmaceutical industry, patient advocates, health insurers, and others
138 representing persons who could be affected by the prescription drug importation program in
139 conducting the study in this section.
140 (4) No later than November 1, 2018, the department shall submit a written report to the
141 Health and Human Services Interim Committee on the findings and recommendations of the
142 study described in this section.
143 (5) The department shall seek grant funding to conduct the study described in this
144 section.
145 Section 5. Section 26-62-301 is enacted to read:
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147 26-62-301. Canadian Prescription Drug Importation Program.
148 The department shall establish a Canadian Prescription Drug Importation Program in
149 accordance with the provisions in this chapter.
150 Section 6. Section 26-62-302 is enacted to read:
151 26-62-302. Program requirements.
152 The prescription drug importation program established under Section 26-62-301 shall:
153 (1) only allow for the importation of prescription drugs that have been identified by the
154 department in the pharmaceutical importation list described in Section 26-62-303;
155 (2) monitor consumer prices to ensure that market competition and routine health plan
156 administration provide significant savings for Utah consumers;
157 (3) specify the actions that the department, the Insurance Department, and the
158 Department of Commerce will take if market competition and routine health plan
159 administration does not result in significant savings for Utah consumers;
160 (4) only use Canadian suppliers regulated under relevant Canadian federal or provincial
161 laws;
162 (5) if required by the secretary, establish a process to ensure the purity, chemical
163 composition, and potency of imported products;
164 (6) ensure that imported prescription drugs will not be distributed, dispensed, or sold
165 outside of the state;
166 (7) ensure that the program does not import a generic prescription drug that would
167 violate United States patent laws;
168 (8) comply with the track and trace requirements in Title II of the Drug Security and
169 Quality Act, 4 U.S.C. Sec. 360eee, et seq., before imported prescription drugs come into
170 possession of the wholesaler;
171 (9) ensure that the supply and distribution chain is in compliance with applicable
172 United States federal and state law after imported prescription drugs are in the possession of
173 the wholesaler;
174 (10) ensure that the prescription drug importation program is adequately financed
175 through an efficient approach that does not jeopardize significant consumer savings;
176 (11) require publication of a wholesaler's acquisition cost of each imported prescription
177 drug;
178 (12) for an imported prescription drug, require a participating pharmacy to disclose
179 upon request the price of the drug that the participating pharmacy will charge to a patient who
180 is not covered by a health plan or contract;
181 (13) include an audit function described in Section 26-62-304; and
182 (14) ensure that participation by a wholesaler, health insurer, health care provider, or
183 consumer is voluntary.
184 Section 7. Section 26-62-303 is enacted to read:
185 26-62-303. Pharmaceutical importation list.
186 (1) (a) The department shall coordinate with the Utah State Board of Pharmacy to
187 develop and periodically revise a pharmaceutical importation list in accordance with this
188 section.
189 (b) The department may coordinate with a working group created under the direction of
190 the Utah State Board of Pharmacy to satisfy the requirement in Subsection (1)(a).
191 (2) The pharmaceutical importation list described in Subsection (1)(a):
192 (a) shall include prescription drugs that:
193 (i) may be imported from Canada under applicable United States federal and state law;
194 and
195 (ii) are expected to generate substantial savings for Utah consumers; and
196 (b) may not include a prescription drug that may not be imported under applicable
197 United States federal and state law.
198 (3) A participating health insurer shall provide the department and the Utah State
199 Board of Pharmacy or the designees of the Utah State Board of Pharmacy with any information
200 requested by the department regarding the net per unit cost of the health insurer's top 20
201 high-cost drugs and the quantity of those drugs dispensed by the health insurer to covered
202 individuals.
203 (4) The information described in Subsection (3):
204 (a) shall only be requested and used for the purpose of developing the pharmaceutical
205 importation list or enforcing provisions of this chapter;
206 (b) is proprietary information that the department, the Utah State Board of Pharmacy,
207 or a designee of the Utah State Board of Pharmacy may not disclose to any person;
208 (c) is a private record for the purpose of Title 63G, Chapter 2, Government Records
209 Access and Management Act; and
210 (d) may not contain personally identifiable personal health care information that is
211 protected by the Health Insurance Portability and Accountability Act as defined in Section
212 31A-1-301.
213 (5) The department shall:
214 (a) review the pharmaceutical importation list every three months to ensure that the
215 pharmaceutical importation list continues to meet the requirements in Subsection (2); and
216 (b) establish policies and procedures by rule made in accordance with Title 63G,
217 Chapter 3, Utah Administrative Rulemaking Act, for updating the pharmaceutical importation
218 list in accordance with Subsection (5)(a).
219 Section 8. Section 26-62-304 is enacted to read:
220 26-62-304. Audits.
221 (1) The prescription drug importation program established under Section 26-62-301
222 shall include audits of suppliers, importers, wholesalers, retail pharmacies, health insurers, and
223 other persons who participate in the prescription drug importation program as appropriate and
224 necessary.
225 (2) The audit function in Subsection (1) shall:
226 (a) include a review of the:
227 (i) methodology used to determine the prescription drugs with the greatest potential for
228 savings;
229 (ii) process used to ensure that Canadian suppliers are of high quality, high
230 performance, and in full compliance with Canadian laws;
231 (iii) methods used to ensure that imported prescription drugs under the prescription
232 drug importation program are not shipped, sold, or dispensed outside the state once in the
233 possession of the wholesaler or the wholesaler's contractors; and
234 (iv) processes used to ensure that imported prescription drugs are pure, unadulterated,
235 potent, and safe; and
236 (b) ensure that Utah consumers benefit from significant savings by verifying that:
237 (i) participating pharmacies and administering providers are not charging rates that
238 jeopardize significant consumer savings to any consumer or participating health plan;
239 (ii) the prescription drug importation program is adequately financed to support all
240 administrative functions while generating significant consumer savings;
241 (iii) the prescription drug importation program does not put consumers at a higher
242 health and safety risk than if the program did not exist;
243 (iv) the prescription drug importation program continues to provide Utah consumers
244 with substantial savings on imported prescription drugs; and
245 (v) a participating pharmacy's ability to negotiate professional fees is not impeded.
246 (3) The department shall coordinate with the Insurance Department and the
247 Department of Commerce to conduct audits in accordance with this section and to enforce the
248 provisions of this chapter.
249 Section 9. Section 26-62-305 is enacted to read:
250 26-62-305. Implementation.
251 (1) The department is responsible for implementing the provisions of the prescription
252 drug importation program upon:
253 (a) certification by the secretary to the United States Congress, in accordance with 21
254 U.S.C. Sec. 384(l), that importation of Canadian prescription drugs will:
255 (i) pose no additional risk to the public's health and safety; and
256 (ii) result in a significant reduction in the cost of covered products to the American
257 consumer;
258 (b) approval by the secretary of the prescription drug importation program;
259 (c) satisfying any other requirements of state and federal law for the importation of
260 prescription drugs from Canada; and
261 (d) collecting fees under Subsection (3)(a) sufficient to cover the startup costs of the
262 prescription drug program.
263 (2) The department shall implement the prescription drug importation program by
264 contracting with any wholesale pharmacy that:
265 (a) is licensed to operate in the state as a class C pharmacy under Section 58-17b-302;
266 (b) complies with the program requirements described in Section 26-62-302; and
267 (c) agrees to any additional conditions of participation that may be established by the
268 department in accordance with the requirements of federal law and this chapter.
269 (3) (a) The department shall establish fees, in accordance with Section 63J-1-504, on
270 an entity that participates in the prescription drug importation program to cover all startup and
271 implementation costs of the prescription drug program.
272 (b) The Insurance Department may establish fees, in accordance with Section
273 63J-1-504, on an insurer that participates in the prescription drug importation program to take
274 an action specified by the department under Subsection 26-62-302(3) or Subsection
275 26-62-304(3).
276 (c) (i) A fee collected by the department under Subsection (3)(a) is a dedicated credit
277 for use by the department to implement this chapter.
278 (ii) A fee collected by the Insurance Department under Subsection (3)(b) is a dedicated
279 credit for use by the Insurance Department to perform the functions described in Subsection
280 (3)(b).
281 (d) The fees in Subsections (3)(a) and (b) may not exceed the amount necessary to
282 cover the cost the department incurs to implement this chapter.
283 (e) The department shall deposit in the General Fund the fees described in Subsection
284 (3)(a) as a dedicated credit to be used solely to pay for the cost of implementing this chapter.
285 (4) Before the conditions described in Subsection (1) are satisfied, the department:
286 (a) may, to the extent allowed under United State federal and state law:
287 (i) design the prescription drug importation program; and
288 (ii) negotiate with wholesalers in Canada and the United States regarding the potential
289 implementation of the prescription drug importation program; and
290 (b) may not:
291 (i) allow the importation of any prescription drugs under this chapter; or
292 (ii) implement any provisions of the prescription drug importation program that would
293 violate United States federal or state law.
294 Section 10. Section 26-62-401 is enacted to read:
295 26-62-401. Pharmaceutical manufacturer -- Prohibited conduct -- Penalties.
296 (1) A pharmaceutical manufacturer may not:
297 (a) take any action, by agreement, unilaterally, or otherwise, that has the effect of
298 fixing or otherwise controlling the price that a pharmaceutical supplier, distributor, or dispenser
299 charges or advertises for pharmaceuticals in the drug importation program; or
300 (b) discriminate against a pharmaceutical supplier, distributor, or dispenser based on
301 whether the supplier, distributor, or dispenser participates in the prescription drug importation
302 program.
303 (2) The attorney general may bring a civil action or seek an injunction against any
304 person who violates a provision of this section, and may seek any remedy available to the
305 attorney general for violations of Title 76, Chapter 10, Part 31, Utah Antitrust Act.
306 Section 11. Section 26-62-402 is enacted to read:
307 26-62-402. Pharmaceutical manufacturer -- Report required.
308 (1) For each drug that has an annual wholesale acquisition cost of $10,000 or more, a
309 pharmaceutical manufacturer shall submit a report to the department if a price increase for that
310 drug will result in an increase in the wholesale acquisition cost that is equal to:
311 (a) 7.5% or more over a period of 12 months; or
312 (b) 18% or more over a period of 36 months.
313 (2) The report described in Subsection (1) shall:
314 (a) be submitted to the department no later than 30 days before the day on which the
315 price increase takes effect; and
316 (b) include, for each drug for which a report is required under Subsection (1):
317 (i) the increase in the cost of the drug, expressed as a percentage increase based on the
318 price of the drug before the cost increase;
319 (ii) a justification for each price increase;
320 (iii) the date on which each price increase takes effect;
321 (iv) the total profit derived from sales of the drug, expressed in total dollars and as a
322 percentage of the pharmaceutical manufacturer's total profits for that calendar year;
323 (v) the total expenditures of the pharmaceutical manufacturer on materials and
324 manufacturing for the drug;
325 (vi) the total research and development costs paid by the pharmaceutical manufacturer
326 for the development and production of the drug;
327 (vii) the total administrative, marketing, and advertising costs for the drug; and
328 (viii) costs associated with direct-to-consumer coupons and patient assistance programs
329 for the drug.
330 (3) (a) The department shall publish information submitted to the department under
331 this section:
332 (i) at least once in every three month period; and
333 (ii) in a manner that allows the information to be identified separately for each drug.
334 (b) Notwithstanding Subsection (3)(a), the department may not disclose a trade secret,
335 as defined in Section 13-24-2, under this section.
336 (4) Information submitted to the department under this section is a private record for
337 the purpose of Title 63G, Chapter 2, Government Records Access and Management Act.
338 Section 12. Section 63I-1-226 is amended to read:
339 63I-1-226. Repeal dates, Title 26.
340 (1) Section 26-1-40 is repealed July 1, 2019.
341 (2) Title 26, Chapter 9f, Utah Digital Health Service Commission Act, is repealed July
342 1, 2025.
343 (3) Section 26-10-11 is repealed July 1, 2020.
344 (4) Title 26, Chapter 33a, Utah Health Data Authority Act, is repealed July 1, 2024.
345 (5) Title 26, Chapter 36a, Hospital Provider Assessment Act, is repealed July 1, 2019.
346 (6) Title 26, Chapter 36b, Inpatient Hospital Assessment Act, is repealed July 1, 2021.
347 [
348 [
349 [
350 (8) Title 26, Chapter 62, Prescription Drug Affordability Act, is repealed July 1, 2028.
351 Section 13. Section 63I-1-276 is amended to read:
352 63I-1-276. Repeal dates, Title 76.
353 (1) Subsection 76-10-526(15) is repealed July 1, 2018.
354 (2) Subsection 76-10-3104(3) is repealed July 1, 2028.
355 Section 14. Section 76-10-3104 is amended to read:
356 76-10-3104. Illegal anticompetitive activities.
357 (1) Every contract, combination in the form of trust or otherwise, or conspiracy in
358 restraint of trade or commerce is declared to be illegal.
359 (2) It shall be unlawful for any person to monopolize, or attempt to monopolize, or
360 combine or conspire with any other person or persons to monopolize, any part of trade or
361 commerce.
362 (3) For purposes of the importation of prescription drugs under Title 26, Chapter 62,
363 Prescription Drug Affordability Act, in addition to the activities described in Subsections (1)
364 and (2), a unilateral act in the form of a trust or otherwise, in restraint of trade or commerce, is
365 unlawful.