1     
PHARMACEUTICAL ENTITY TRANSPARENCY ACT

2     
2019 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kirk A. Cullimore

5     
House Sponsor: Norman K. Thurston

6     

7     LONG TITLE
8     General Description:
9          This bill enacts and amends provisions related to prescription drugs.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     amends provisions related to the information an insurer and health benefit plan must
14     provide to an enrollee or prospective enrollee, including information regarding
15     formulary changes;
16          ▸     removes provisions related to a pharmacy benefit manager's registration with the
17     Department of Commerce;
18          ▸     requires a pharmacy benefit manager to be licensed by the Insurance Department to
19     conduct business in the state;
20          ▸     requires reports by certain entities to the Insurance Department regarding the impact
21     of costs of prescription drugs, including information on the costliest drugs and drugs
22     with high increases in spending;
23          ▸     requires a pharmacy benefit manager to report certain information to a health
24     insurer or plan sponsor regarding drug utilization payments;
25          ▸     requires pharmaceutical manufacturers to report certain information related to
26     prescription drug price increases and introduction;
27          ▸     requires a patient assistance program to report certain information related to

28     contributions from certain entities;
29          ▸     requires other reports related to prescription drugs;
30          ▸     enacts provisions regarding inducement related to health care services;
31          ▸     amends provisions related to a pharmacist substituting a prescription drug;
32          ▸     enacts provisions related to prescription drug marketing;
33          ▸     enacts provisions related to testing a prescription drug for federal approval;
34          ▸     provides rulemaking authority; and
35          ▸     makes technical and conforming changes.
36     Money Appropriated in this Bill:
37          None
38     Other Special Clauses:
39          None
40     Utah Code Sections Affected:
41     AMENDS:
42          31A-22-613.5, as last amended by Laws of Utah 2017, Chapters 241 and 292
43          31A-22-640, as last amended by Laws of Utah 2015, Chapter 258
44          58-17b-605, as last amended by Laws of Utah 2013, Chapter 423
45          58-17b-605.5, as last amended by Laws of Utah 2015, Chapter 266
46     ENACTS:
47          31A-46-101, Utah Code Annotated 1953
48          31A-46-102, Utah Code Annotated 1953
49          31A-46-103, Utah Code Annotated 1953
50          31A-46-104, Utah Code Annotated 1953
51          31A-46-105, Utah Code Annotated 1953
52          31A-46-106, Utah Code Annotated 1953
53          31A-46-107, Utah Code Annotated 1953
54          31A-46-108, Utah Code Annotated 1953
55          31A-46-109, Utah Code Annotated 1953
56          31A-46-110, Utah Code Annotated 1953
57          31A-46-111, Utah Code Annotated 1953
58          31A-46-112, Utah Code Annotated 1953

59          31A-46-113, Utah Code Annotated 1953
60          58-17c-101, Utah Code Annotated 1953
61          58-17c-102, Utah Code Annotated 1953
62          58-17c-103, Utah Code Annotated 1953
63          58-17c-104, Utah Code Annotated 1953
64          58-17c-105, Utah Code Annotated 1953
65     

66     Be it enacted by the Legislature of the state of Utah:
67          Section 1. Section 31A-22-613.5 is amended to read:
68          31A-22-613.5. Price and value comparisons of health insurance.
69          (1) (a) This section applies to all health benefit plans.
70          (b) Subsection (2) applies to:
71          (i) all health benefit plans; and
72          (ii) coverage offered to state employees under Subsection 49-20-202(1)(a).
73          (2) The commissioner shall promote informed consumer behavior and responsible
74     health benefit plans by requiring an insurer issuing a health benefit plan to provide to all
75     enrollees, before enrollment in the health benefit plan, written disclosure of:
76          (a) restrictions or limitations on prescription drugs and biologics, including:
77          (i) the use of a formulary;
78          (ii) co-payments [and], coinsurance, deductibles, and cost-sharing information for
79     prescription drugs; and
80          (iii) requirements for generic substitution;
81          (b) information regarding the health benefit plan's medical exceptions process,
82     including information on the procedure through which an enrollee may submit an exceptions
83     request;
84          (c) a description of how an enrollee or prospective enrollee can access information
85     regarding, if applicable:
86          (i) whether a prescription drug is preferred under the health benefit plan;
87          (ii) a prescription drug's formulary tier;
88          (iii) any prior authorization, step therapy, quantity limit, pharmacy restriction, or other
89     pharmaceutical benefit management program limitation on access to a prescription drug under

90     the health plan;
91          [(b)] (d) coverage limits under the plan;
92          [(c)] (e) any limitation or exclusion of coverage, including:
93          (i) a limitation or exclusion for a secondary medical condition related to a limitation or
94     exclusion from coverage; and
95          (ii) easily understood examples of a limitation or exclusion of coverage for a secondary
96     medical condition;
97          [(d)] (f) whether the insurer permits an exchange of the adoption indemnity benefit in
98     Section 31A-22-610.1 for infertility treatments, in accordance with Subsection
99     31A-22-610.1(1)(c)(ii) and the terms associated with the exchange of benefits; and
100          [(e)] (g) whether the insurer provides coverage for telehealth services in accordance
101     with Section 26-18-13.5 and terms associated with that coverage.
102          (3) An insurer shall provide the disclosure required by Subsection (2)(a)(i) in writing to
103     the commissioner:
104          (a) upon commencement of operations in the state; and
105          (b) anytime the insurer amends any of the following described in Subsection (2):
106          (i) treatment policies;
107          (ii) practice standards;
108          (iii) restrictions;
109          (iv) coverage limits of the insurer's health benefit plan or health insurance policy; or
110          (v) limitations or exclusions of coverage including a limitation or exclusion for a
111     secondary medical condition related to a limitation or exclusion of the insurer's health
112     insurance plan.
113          (4) (a) An insurer shall provide the enrollee with notice of an increase in costs for
114     prescription drug coverage due to a change in benefit design under Subsection (2)(a):
115          (i) either:
116          (A) in writing; or
117          (B) on the insurer's website; and
118          (ii) at least 30 days prior to the date of the implementation of the increase in cost, or as
119     soon as reasonably possible.
120          (b) If under Subsection (2)(a) a formulary is used, the insurer shall make available to

121     prospective enrollees and maintain evidence of the fact of the disclosure of:
122          [(i) the drugs included;]
123          (i) a copy of the formulary;
124          (ii) the prescription drugs included on the formularly, including information on each
125     prescription drug covered under the health benefit plan's prescription drug benefit or outpatient
126     medical benefit that is administered in an outpatient setting:
127          (A) by a health professional; or
128          (B) under a health professional's direct supervision;
129          [(ii)] (iii) the patented drugs not included;
130          (iv) information regarding the extent to which cost-sharing varies depending on the
131     supply of a drug on the formulary;
132          [(iii)] (v) any conditions that exist as a precedent to coverage; and
133          [(iv)] (vi) any exclusion from coverage for secondary medical conditions that may
134     result from the use of an excluded drug.
135          (c) (i) The commissioner shall develop examples of limitations or exclusions of a
136     secondary medical condition that an insurer may use under Subsection (2)[(c)](e).
137          (ii) Examples of a limitation or exclusion of coverage provided under Subsection
138     (2)[(c)](e) or otherwise are for illustrative purposes only, and the failure of a particular fact
139     situation to fall within the description of an example does not, by itself, support a finding of
140     coverage.
141          (5) (a) An insurer that offers a health benefit plan in the state shall make the health
142     benefit plan's formulary and other prescription drug benefit information, as determined by the
143     department:
144          (i) easily accessible to an enrollee or a prospective enrollee; and
145          (ii) searchable by health benefit plan type and name.
146          (b) An insurer may not require an enrollee or a prospective enrollee to provide an
147     account, a plan, or a policy number to access the information described in Subsection (5)(a).
148          (6) An insurer that offers a health benefit plan in the state shall annually report to the
149     department for each of the insurer's health benefit plans:
150          (a) the percentage of prescription drug prior authorization requests that the health
151     benefit plan denied out of the total requests the health benefit plan received over the prior

152     calendar year;
153          (b) the percentage of prior authorization appeals that the health benefit plan denied at
154     each level of internal or external appeal out of the total appeals the health benefit plan
155     adjudicated over the prior calendar year; and
156          (c) the maximum, minimum, and average number of hours that passed between an
157     enrollee submitting a prior authorization request to the health benefit plan and the health
158     benefit plan providing the enrollee with notice of a final decision, after accounting for any
159     internal or external appeals.
160          (7) (a) An insurer or a health benefit plan shall provide notice as described in
161     Subsection (7)(b) when it makes or approves a change in a formulary that:
162          (i) causes a prescription drug to no longer be covered on formulary;
163          (ii) applies a new or revised dose restriction that limits the doses of a prescription drug
164     that are covered; or
165          (iii) applies a new or revised prior authorization, step therapy, quantity limit, or other
166     pharmaceutical benefit management procedure or restriction on access to a prescription drug
167     under the health benefit plan.
168          (b) An insurer or a health benefit plan shall ensure that a notice described in Subsection
169     (7)(a) is provided to the following no later than 60 days before the insurer or health benefit plan
170     approves the change described in Subsection (7)(a):
171          (i) all health benefit plan enrollees with a prescription for the prescription drug;
172          (ii) all in-network prescribers; and
173          (iii) all in-network pharmacies.
174          (8) When an insurer or health benefit plan makes or approves a change described in
175     Subsection (7)(a), the insurer or health benefit plan shall provide an enrollee with a
176     prescription drug affected by the change:
177          (a) for at least 60 days after providing the notice described in Subsection (7); or
178          (b) (i) for as long as the prescription drug is prescribed to the enrollee; and
179          (ii) under the same terms that applied before the change.
180          Section 2. Section 31A-22-640 is amended to read:
181          31A-22-640. Insurer and pharmacy benefit management services -- Registration
182     -- Maximum allowable cost -- Audit restrictions.

183          (1) [For purposes of] As used in this section:
184          (a) "Maximum allowable cost" means:
185          (i) a maximum reimbursement amount for a group of pharmaceutically and
186     therapeutically equivalent drugs; or
187          (ii) any similar reimbursement amount that is used by a pharmacy benefit manager to
188     reimburse pharmacies for multiple source drugs.
189          (b) "Obsolete" means a product that may be listed in national drug pricing compendia
190     but is no longer available to be dispensed based on the expiration date of the last lot
191     manufactured.
192          (c) " Pharmacy benefit manager" means a person or entity that provides pharmacy
193     benefit management services as defined in Section 49-20-502 on behalf of an insurer as defined
194     in Subsection 31A-22-636(1).
195          (2) An insurer and an insurer's pharmacy benefit manager is subject to the pharmacy
196     audit provisions of Section 58-17b-622.
197          (3) A pharmacy benefit manager shall not use maximum allowable cost as a basis for
198     reimbursement to a pharmacy unless:
199          (a) the drug is listed as "A" or "B" rated in the most recent version of the United States
200     Food and Drug Administration's approved drug products with therapeutic equivalent
201     evaluations, also known as the "Orange Book," or has an "NR" or "NA" rating or similar rating
202     by a nationally recognized reference; and
203          (b) the drug is:
204          (i) generally available for purchase in this state from a national or regional wholesaler;
205     and
206          (ii) not obsolete.
207          (4) The maximum allowable cost may be determined using comparable and current
208     data on drug prices obtained from multiple nationally recognized, comprehensive data sources,
209     including wholesalers, drug file vendors, and pharmaceutical manufacturers for drugs that are
210     available for purchase by pharmacies in the state.
211          (5) For every drug for which the pharmacy benefit manager uses maximum allowable
212     cost to reimburse a contracted pharmacy, the pharmacy benefit manager shall:
213          (a) include in the contract with the pharmacy information identifying the national drug

214     pricing compendia and other data sources used to obtain the drug price data;
215          (b) review and make necessary adjustments to the maximum allowable cost, using the
216     most recent data sources identified in Subsection (5)(a), at least once per week;
217          (c) provide a process for the contracted pharmacy to appeal the maximum allowable
218     cost in accordance with Subsection (6); and
219          (d) include in each contract with a contracted pharmacy a process to obtain an update
220     to the pharmacy product pricing files used to reimburse the pharmacy in a format that is readily
221     available and accessible.
222          (6) (a) The right to appeal in Subsection (5)(c) shall be:
223          (i) limited to 21 days following the initial claim adjudication; and
224          (ii) investigated and resolved by the pharmacy benefit manager within 14 business
225     days.
226          (b) If an appeal is denied, the pharmacy benefit manager shall provide the contracted
227     pharmacy with the reason for the denial and the identification of the national drug code of the
228     drug that may be purchased by the pharmacy at a price at or below the price determined by the
229     pharmacy benefit manager.
230          (7) The contract with each pharmacy shall contain a dispute resolution mechanism in
231     the event either party breaches the terms or conditions of the contract.
232          [(8) (a) To conduct business in the state, a pharmacy benefit manager shall register
233     with the Division of Corporations and Commercial Code within the Department of Commerce
234     and annually renew the registration. To register under this section, the pharmacy benefit
235     manager shall submit an application which shall contain only the following information:]
236          [(i) the name of the pharmacy benefit manager;]
237          [(ii) the name and contact information for the registered agent for the pharmacy benefit
238     manager; and]
239          [(iii) if applicable, the federal employer identification number for the pharmacy benefit
240     manager.]
241          [(b) The Department of Commerce may establish a fee in accordance with Title 63J,
242     Chapter 1, Budgetary Procedures Act, for the initial registration and the annual renewal of the
243     registration, which may not exceed $100 per year.]
244          [(c) The following entities do not have to register as a pharmacy benefit manager under

245     Subsection (8)(a) when the entity is providing formulary services to its own patients,
246     employees, members, or beneficiaries:]
247          [(i) a health care facility licensed under Title 26, Chapter 21, Health Care Facility
248     Licensing and Inspection Act;]
249          [(ii) a pharmacy licensed under Title 58, Chapter 17b, Pharmacy Practice Act;]
250          [(iii) a health care professional licensed under Title 58, Occupations and Professions;]
251          [(iv) a health insurer; and]
252          [(v) a labor union.]
253          [(9)] (8) This section does not apply to a pharmacy benefit manager when the
254     pharmacy benefit manager is providing pharmacy benefit management services on behalf of the
255     state Medicaid program.
256          Section 3. Section 31A-46-101 is enacted to read:
257     
CHAPTER 46. PHARMACEUTICAL SUPPLY CHAIN

258     
Part 1. Pharmaceutical Supply Chain Transparency

259          31A-46-101. Title.
260          This chapter is known as "Pharmaceutical Supply Chain."
261          Section 4. Section 31A-46-102 is enacted to read:
262          31A-46-102. Definitions.
263          As used in this part:
264          (1) "Course of therapy" means the recommended daily dosage units of a drug pursuant
265     to the drug's prescribing label as approved by the United States Food and Drug Administration
266     for:
267          (a) 30 days; or
268          (b) a normal course of treatment that is less than 30 days.
269          (2) "Drug" means a prescription drug as defined in Section 58-17b-102.
270          (3) "Drug utilization payment" means any direct or indirect financial payment by a
271     pharmaceutical manufacturer to a person that results from the purchase or anticipated purchase
272     of a drug, including:
273          (a) a rebate;
274          (b) a credit;
275          (c) a fee;

276          (d) a chargeback;
277          (e) a grant; or
278          (f) another item of value.
279          (4) "Health care provider" means a person that:
280          (a) meets the definition of a health care provider as defined in Section 78B-3-403; and
281          (b) is licensed under Title 58, Occupations and Professions.
282          (5) "Health insurer" means:
283          (a) an insurer that offers health care insurance as defined in Section 31A-1-301;
284          (b) for health benefits offered to state employees under Section 49-20-202, the Public
285     Employees' Benefit and Insurance Program created in Section 49-20-103; or
286          (c) a workers' compensation insurer that is:
287          (i) authorized to provide workers' compensation insurance in the state; or
288          (ii) a self-insured employer as defined in Section 34A-2-201.5.
289          (6) "Large purchaser" means a purchaser that provides coverage to more than 500 lives.
290          (7) "Patient assistance program" means a program that is offered by an independent
291     nonprofit organization that:
292          (a) advocates on behalf of patients in the state;
293          (b) funds medical research in the state;
294          (c) reduces consumer out-of-pocket costs of a drug; or
295          (d) provides grants to defray medical expenses.
296          (8) "Pharmaceutical manufacturer" means:
297          (a) a person that is engaged in the manufacturing of a drug or pharmaceutical device
298     that is available for purchase by residents of the state; or
299          (b) a person that is responsible for setting the price of a drug that is available for
300     purchase by residents of the state on behalf of a person described in Subsection (8)(a).
301          (9) "Pharmaceutical wholesaler or distributor" means the same as that term is defined
302     in Section 58-17b-102.
303          (10) "Pharmacy benefit manager" means the same as that term is defined in Section
304     31A-22-640.
305          (11) "Pharmacy services administrative organization" means a person that provides
306     contracting and other administrative services to a pharmacy to assist the pharmacy in the

307     pharmacy's interaction, including reimbursement rate negotiations, with third-party payers,
308     pharmacy benefit managers, drug wholesalers, and other entities.
309          (12) "Purchaser" means an insurance puchaser that is:
310          (a) (i) a state purchaser, including:
311          (A) the department;
312          (B) the Public Employees' Health Plan;
313          (C) the Department of Administrative Services;
314          (D) the State Board of Regents;
315          (E) the State Board of Education; and
316          (F) the Department of Corrections; or
317          (ii) an entity acting on behalf of a state purchaser;
318          (b) a health insurer; or
319          (c) a pharmacy benefit manager as defined in Section 58-17b-102.
320          (13) "Third party" means:
321          (a) a health insurer;
322          (b) a public agency or local governmental agency of the state that provides a system of
323     health insurance for the agency's officers, the agency's employees, and dependents of the
324     agency's officers and employees; or
325          (c) any other insurer or organization that provides health coverage or benefits in
326     accordance with state or federal law.
327          (14) "Wholesale acquisition cost" means a pharmaceutical manufacturer's list price:
328          (a) for selling a brand-name or generic drug to a wholesaler or a direct purchaser in the
329     United States;
330          (b) that is the list price:
331          (i) per person, either per year or per course of therapy; and
332          (ii) for the most recent month for which information is available; and
333          (c) that does not include any discounts or rebates.
334          Section 5. Section 31A-46-103 is enacted to read:
335          31A-46-103. Department licensure of pharmacy benefit manager.
336          (1) A pharmacy benefit manager may not conduct business in the state without a
337     license issued by the department.

338          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
339     department shall establish licensure requirements for a pharmacy benefit manager to conduct
340     business in the state.
341          Section 6. Section 31A-46-104 is enacted to read:
342          31A-46-104. Prescription drug reports to department -- Costliest drugs, drugs
343     with high year-over-year increase in spending, impact of costs on premium rates --
344     Annual report -- Protected records.
345          (1) As used in this section, "drug cost information" means:
346          (a) the 25 costliest drugs by total net annual plan spending;
347          (b) the 25 drugs with the highest year-over-year increase in total annual plan spending;
348     and
349          (c) the impact of the costs of drugs on premium rates.
350          (2) The following entities shall annually report drug cost information to the
351     department:
352          (a) a health insurer regarding drugs reimbursed by the health insurer under policies
353     issued in the state;
354          (b) a pharmacy benefit manager for all of the pharmacy benefit manager's contracted
355     clients in aggregate;
356          (c) pharmaceutical wholesaler or distributor for all of the pharmaceutical wholesaler or
357     distributor's contracted pharmacies in aggregate;
358          (d) a pharmacy services administrative organization regarding drugs at all pharmacies
359     for which the pharmacy services administrative organization provides services; and
360          (e) a pharmacy regarding drugs the pharmacy dispenses.
361          (3) A pharmacy benefit manager shall annually report to the department for all of the
362     pharmacy benefit manager's contracted clients in aggregate:
363          (a) the combined amount of rebates, discounts, and price concessions that the
364     pharmacy benefit manager negotiates that are attributable to patient utilization under a plan;
365     and
366          (b) the combined amount of the rebates, discounts, and price concessions described in
367     Subsection (3)(a) that are passed through to the plan sponsor.
368          (4) (a) The department shall create an annual report using the reports described in this

369     section that demonstrates the overall impact of drug costs on health care premiums.
370          (b) The report described in Subsection (4)(a) shall include, using the data from the
371     reports described in this section, an analysis that identifies:
372          (i) trends in drug pricing; and
373          (ii) the impact of pharmacy costs on premiums.
374          (c) The report:
375          (i) shall include aggregate data from the reports described in this section; and
376          (ii) may not include information that can be reasonably identified in relation to a
377     specific:
378          (A) health insurer;
379          (B) pharmacy benefit manager;
380          (C) pharmaceutical wholesaler or distributor;
381          (D) pharmacy services administrative organization; or
382          (E) pharmacy.
383          (5) Except for the information in the annual report described in Subsection (4)(a),
384     information submitted in a report to the department in accordance with this section is a
385     protected record under Title 63G, Chapter 2, Government Records Access and Management
386     Act.
387          Section 7. Section 31A-46-105 is enacted to read:
388          31A-46-105. Pharmaceutical manufacturer reports to department -- Annual
389     report -- Protected records.
390          (1) As used in this section:
391          (a) "Rebate" means any rebate, discount, or other price concession that:
392          (i) a purchaser receives or expects to receive, directly or indirectly, from a
393     pharmaceutical manufacturer; and
394          (ii) is related to utilization of a drug produced by the pharmaceutical manufacturer.
395          (b) "Research and development expenditures" means all costs that a pharmaceutical
396     manufacturer incurs during a calendar year that relate to the research and development of a new
397     product, process, or service, including a cost from obtaining a license.
398          (2) The department shall annually identify up to 25 drugs:
399          (a) (i) on which the state spends significant health care dollars, after accounting for

400     rebates; or
401          (ii) for which the wholesale acquisition cost has increased by 10% or more over the
402     prior calendar year;
403          (b) that represent different drug classes; and
404          (c) that include generic drugs.
405          (3) For each drug identified under Subsection (2), the department shall require the
406     pharmaceutical manufacturer of the drug to report to the department:
407          (a) the drug's wholesale acquisition cost increases over the previous five calendar
408     years;
409          (b) a written description, for public release, of factors that contributed to the increases
410     described in Subsection (3)(a); and
411          (c) for the most recent year for which final audited data are available, the
412     pharmaceutical manufacturer's:
413          (i) aggregate research and development expenditures; and
414          (ii) other relevant expenditures in aggregate.
415          (4) The department shall establish:
416          (a) after consultation with pharmaceutical manufacturers, a format for reporting
417     information described in this section;
418          (b) requirements related to the level and type of data for a report to the department
419     described in this section; and
420          (c) annually publish on the department's website a report based on the information in
421     the reports to the department described in this section.
422          (5) Except for the description described in Subsection (3)(b), information submitted in
423     a report to the department in accordance with this section is a protected record under Title 63G,
424     Chapter 2, Government Records Access and Management Act.
425          (6) Information in a report to the department described in this section is not subject to
426     further regulation by a political subdivision of the state.
427          Section 8. Section 31A-46-106 is enacted to read:
428          31A-46-106. Reports to a health insurer or plan sponsor.
429          (1) Upon the request of a health insurer or a plan sponsor, a pharmacy benefit manager
430     shall annually report to the health insurer or plan sponsor:

431          (a) the aggregate of all drug utilization payments received by the pharmacy benefit
432     manager due to the health insurer's or plan sponsor's utilization; and
433          (b) the aggregate of all drug utilization payments described in Subsection (1)(a) that the
434     pharmacy benefit manager passes on to the health insurer or the plan sponsor.
435          (2) Upon the request of a health insurer or a plan sponsor, a pharmacy services
436     administrative organization shall annually report to the health insurer or plan sponsor:
437          (a) the aggregate of all drug utilization payments received by the pharmacy services
438     administrative organization due to the health insurer's or plan sponsor's utilization; and
439          (b) the aggregate of all drug utilization payments described in Subsection (1)(a) that the
440     pharmacy services administrative organization passes on to the health insurer or the plan
441     sponsor.
442          Section 9. Section 31A-46-107 is enacted to read:
443          31A-46-107. Pharmaceutical manufacturer -- Advance notice of price increase to
444     purchasers.
445          (1) A pharmaceutical manufacturer shall submit a notice to purchasers in accordance
446     with Subsection (2) for a price increase of a drug that will result in an increase in the wholesale
447     acquisition cost of the drug that is equal to:
448          (a) 10% or more in a year for a drug that has a wholesale acquisition cost of $150 to
449     $1,000 for a course of therapy; or
450          (b) 5% or more in a year for a drug that has a wholesale acquisition cost of more than
451     $1,000 for a course of therapy.
452          (2) A pharmaceutical manufacturer required to submit a notice under Subsection (1)
453     shall:
454          (a) submit the notice in writing to each purchaser on the list described in Subsection (3)
455     no later than 60 days before the day on which the price increase takes effect; and
456          (b) include in the notice, for each drug for which notice is required under Subsection
457     (1):
458          (i) the increase in the price of the drug, expressed as:
459          (A) a percentage increase based on the price of the drug before the price increase; and
460          (B) the dollar amount of the increase;
461          (ii) the date on which the price increase takes effect;

462          (iii) the current wholesale acquisition cost of the drug; and
463          (iv) a description of the change or improvement in the drug, if any, that necessitates the
464     price increase.
465          (3) The department shall:
466          (a) maintain a list of purchasers that register to receive a notice described in Subsection
467     (1);
468          (b) determine how a purchaser may register to be placed on the list described in
469     Subsection (3)(a); and
470          (c) make the list described in Subsection (3)(a) available to pharmaceutical
471     manufacturers to provide the notice described in Subsection (1).
472          Section 10. Section 31A-46-108 is enacted to read:
473          31A-46-108. Pharmaceutical manufacturer -- Report of price increase to the
474     department.
475          (1) A pharmaceutical manufacturer shall submit a report to the department in
476     accordance with Subsection (2) for each price increase of a drug that is subject to the notice
477     requirement described in Section 31A-46-107.
478          (2) Subject to Subsection (3), a pharmaceutical manufacturer required to submit a
479     report under Subsection (1) shall:
480          (a) submit the report in writing to the department no later than 60 days before the day
481     on which the price increase takes effect; and
482          (b) include in the report, for each drug for which a report is required under Subsection
483     (1):
484          (i) the information about the increase in price described in Subsection
485     31A-46-107(2)(b)(i);
486          (ii) a description of the specific financial and nonfinancial factors used to make the
487     decision to increase the wholesale acquisition cost of the drug, including:
488          (A) an explanation of how the factors explain the increase; and
489          (B) a description of the change or improvement in the drug, if any, that necessitates the
490     price increase;
491          (iii) for a pharmaceutical manufacturer that has manufactured the drug for the previous
492     five years, a schedule of wholesale acquisition cost increases for the drug for the previous five

493     years; and
494          (iv) for a pharmaceutical manufacturer that acquired the drug within the previous five
495     years:
496          (A) the wholesale acquisition cost at the time of acquisition;
497          (B) the wholesale acquisition cost of the drug in the calendar year prior to acquisition;
498          (C) the name of the company from which the pharmaceutical manufacturer acquired
499     the drug;
500          (D) the date on which the pharmaceutical manufacturer acquired the drug;
501          (E) the purchase price of the drug;
502          (F) the year in which the drug was introduced into the market; and
503          (G) the wholesale acquisition cost of the drug at the time the drug was introduced into
504     the market.
505          (3) A pharmaceutical manufacturer is not required to report information described in
506     Subsection (2) that is not publicly available.
507          (4) The department shall publish on the department's website a report the department
508     receives under Subsection (1) no later than 60 days after the day on which the department
509     receives the report.
510          (5) (a) The department may bring a civil action against a pharmaceutical manufacturer
511     that violates this section.
512          (b) A pharmaceutical manufacturer that violates this section is liable for a penalty of
513     $1,000 per day that the pharmaceutical manufacturer is in violation.
514          (c) A court may reduce or waive a penalty described in Subsection (5)(b) for good
515     cause.
516          Section 11. Section 31A-46-109 is enacted to read:
517          31A-46-109. Pharmaceutical manufacturer -- Report of new prescription drug.
518          (1) A pharmaceutical manufacturer that introduces a new drug to market at a wholesale
519     acquisition cost that exceeds the payment threshold for the drug as determined by the United
520     States Food and Drug Administration under 42 C.F.R. Sec. 447.512 shall submit a written
521     notice of the introduction to the department no later than three days after the day on which the
522     pharmaceutical manufacturer introduces the new drug.
523          (2) Subject to Subsection (3), a pharmaceutical manufacturer that submits a

524     notification as described in Subsection (1) shall, no later than 30 days after the day on which
525     the pharmaceutical manufacturer submits the notification, report to the department:
526          (a) the price of the drug;
527          (b) a description of the marketing and pricing plans used in:
528          (i) the launch of the drug in the United States; and
529          (ii) the launch of the drug internationally;
530          (c) the estimated number of patients that may be prescribed the drug;
531          (d) whether the drug was granted breakthrough therapy designation or priority review
532     by the United States Food and Drug Administration; and
533          (e) if the pharmaceutical manufacturer did not develop the drug, the date and price of
534     acquisition of the drug.
535          (3) A pharmaceutical manufacturer is not required to report information described in
536     Subsection (2) that is not publicly available.
537          (4) (a) The department shall publish on the department's website a report the
538     department receives under Subsection (2) no later than 60 days after the day on which the
539     department receives the report.
540          (b) The department shall ensure that the publication described in Subsection (4)(a)
541     allows information to be separately identified for each drug for which a report is submitted.
542          (5) (a) The department may bring a civil action against a pharmaceutical manufacturer
543     that violates this section.
544          (b) A pharmaceutical manufacturer that violates this section is liable for a penalty of
545     $1,000 per day that the pharmaceutical manufacturer is in violation.
546          (c) A court may reduce or waive a penalty described in Subsection (5)(b) for good
547     cause.
548          Section 12. Section 31A-46-110 is enacted to read:
549          31A-46-110. Patient assistance program -- Report of contributions.
550          (1) As used in this section:
551          (a) "Applicable entity" means:
552          (i) a pharmaceutical manufacturer;
553          (ii) a pharmacy benefit manager;
554          (iii) a third party; or

555          (iv) a trade group or an advocacy group for an entity described in Subsections (1)(a)(i)
556     through (iii).
557          (b) "Contribution" means a payment, donation, subsidy, or any other contribution of
558     value.
559          (2) (a) On or before February 1 each year, a patient assistance program that received a
560     contribution from an applicable entity during the immediately preceding calendar year shall
561     create a report that includes a list of all the contributions.
562          (b) The report shall include:
563          (i) for each contribution from an applicable entity:
564          (A) the amount of the contribution; and
565          (B) the applicable entity from which the patient assistance program received the
566     contribution; and
567          (ii) for each applicable entity, the percentage of the patient assistant program's total
568     gross income that is attributable to the total contributions from the applicable entity.
569          (3) (a) Except as provided in Subsection (3)(b), a patient assistance program described
570     in Subsection (2) shall post the report described in Subsection (2) to a publicly accessible
571     website maintained by the patient assistance program.
572          (b) If the patient assistance program does not maintain a publicly accessible website:
573          (i) the patient assistance program shall submit the report described in Subsection (2) to
574     the department; and
575          (ii) after receiving a report described in Subsection (3)(b)(i), the department shall post
576     the report to the department's website.
577          Section 13. Section 31A-46-111 is enacted to read:
578          31A-46-111. Rulemaking -- Report to Legislature.
579          (1) Beginning on July 1, 2020, the department shall enforce the provisions of this part.
580          (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
581     department may make rules to implement the provisions of this part, including rules that:
582          (a) provide requirements related to a report to the department described in this section;
583     or
584          (b) provide for administrative penalties against a patient assistance program that
585     violates the provisions of Section 31A-46-110.

586          (3) On or before January 1, 2022, the department shall report to the Business and Labor
587     Interim Committee on the implementation of this part, including the effectiveness of the
588     provisions of this part at addressing:
589          (a) the promotion of transparency in pharmaceutical pricing for the state and other
590     payers;
591          (b) the enhancement of understanding about pharmaceutical spending trends; and
592          (c) assisting the state and other payers in management of pharmaceutical drug costs.
593          (4) The department shall pay to the Medicaid Restricted Account created in Section
594     26-18-402 any money the department receives under this part or in accordance with the rules
595     described in Subsection (2).
596          Section 14. Section 31A-46-112 is enacted to read:
597          31A-46-112. Pharmacy benefit manager reports and duties -- Aggregate retained
598     rebate percentage.
599          (1) As used in this section:
600          (a) "Aggregate rebates received" means aggregate rebates that the pharmacy benefit
601     manager received during the prior calendar year from a pharmaceutical manufacturer related to
602     utilization of the manufacturer's prescription drug by health plan enrollees.
603          (b) "Aggregate retained rebate percentage" means a percentage:
604          (i) that is the percentage, out of the aggregate rebates received, of the aggregate rebates
605     that a pharmacy benefit manager received during the prior calendar year from a pharmaceutical
606     manufacturer related to utilization of the manufacturer's prescription drug by health plan
607     enrollees and did not pass through to the health plan or health insurer;
608          (ii) calculated for each prescription drug for which a pharmacy benefit manager
609     receives rebates under a particular health plan; and
610          (iii) expressed without disclosing identifying information regarding a health plan,
611     prescription drug, or therapeutic class.
612          (c) (i) "Rebates" means all rebates, discounts, or other price concessions:
613          (A) based on utilization of a prescription drug;
614          (B) paid by the manufacturer or other party that is not an enrollee; and
615          (C) paid directly or indirectly to a pharmacy benefit manager after a claim has been
616     adjudicated at the pharmacy.

617          (ii) "Rebates" includes a reasonable estimate of any volume-based or other discounts.
618          (2) A pharmacy benefit manager shall annually report to the department the following
619     information from the prior calendar year:
620          (a) for each of the pharmacy benefit manager's contractual or other relationships with a
621     health plan or health insurer, the aggregate amount of all rebates that pharmacy benefit
622     manager received from all pharmaceutical manufacturers;
623          (b) for each of the pharmacy benefit manager's contractual or other relationships with a
624     health plan or health insurer, the aggregate administrative fees that the pharmacy benefit
625     manager received;
626          (c) for each of the pharmacy benefit manager's contractual or other relationships with a
627     health plan or health insurer, the aggregate rebates that the pharmacy benefit manager received
628     from all pharmaceutical manufacturers and did not pass through to the health plan or health
629     insurer; and
630          (d) for each of the pharmacy benefit manager's contractual or other relationships with a
631     health plan or health insurer:
632          (i) the highest aggregate retained rebate percentage;
633          (ii) the lowest aggregate retained rebate percentage; and
634          (iii) the mean aggregate retained rebate percentage.
635          (3) The department shall publish on the department's website a report that includes the
636     information the department receives under Subsection (2):
637          (a) in a timely manner; and
638          (b) in a form that does not disclose:
639          (i) the identity of a specific health plan or health insurer;
640          (ii) the prices charged for specific drugs or classes of drugs; or
641          (iii) the amount of any rebates provided for specific drugs or classes of drugs.
642          (4) Except for the report described in Subsection (3), the information submitted in a
643     report to the department under Subsection (2) is a protected record under Title 63G, Chapter 2,
644     Government Records Access and Management Act.
645          (5) A pharmacy benefit manager shall, for each of the pharmacy benefit manager's
646     contracts with a health plan, publish on a publicly accessible website:
647          (a) the health plan formulary; and

648          (b) timely notification of formulary changes or product exclusions.
649          (6) A pharmacy benefit manager may not contractually prohibit a pharmacy or
650     pharmacist from, or penalize a pharmacy or pharmacist for:
651          (a) disclosing to a health plan enrollee information regarding:
652          (i) the cost-sharing amounts that the enrollee, without requesting any health plan
653     reimbursement, is required to pay for a particular prescription drug:
654          (A) under the enrollee's health plan prescription drug benefit; or
655          (B) outside the enrollee's health plan prescription drug benefit; or
656          (ii) the existence and clinical efficacy of a therapeutically equivalent drug that would,
657     without requesting any health plan reimbursement, and as compared to the drug that was
658     originally prescribed, be less expensive to the enrollee:
659          (A) under the enrollee's health plan prescription drug benefit; or
660          (B) outside the enrollee's health plan prescription drug benefit; or
661          (b) selling to a health plan enrollee, instead of a particular prescribed drug, a
662     therapeutically equivalent drug that would, without requesting any health plan reimbursement,
663     and as compared to the drug that was originally prescribed, be less expensive to the enrollee:
664          (i) under the enrollee's health plan prescription drug benefit; or
665          (ii) outside the enrollee's health plan prescription drug benefit.
666          Section 15. Section 31A-46-113 is enacted to read:
667          31A-46-113. Inducement for health care services -- Safe harbor -- Rulemaking.
668          (1) Except as provided in Subsection (3), a health care provider or a pharmaceutical
669     manufacturer violates this section if the health care provider or pharmaceutical manufacturer:
670          (a) waives or offers to waive, provides a rebate for, or pays all or a portion of one of
671     the following owed by a covered individual under the covered individual's health benefits plan:
672          (i) a deductible;
673          (ii) a copayment; or
674          (iii) coinsurance; and
675          (b) engages in the conduct described in Subsection (1)(a) with the intent to induce the
676     covered individual to seek health care services from the health care provider or pharmaceutical
677     manufacturer.
678          (2) A health care provider or a pharmaceutical manufacturer that engages in a pattern

679     of the conduct described in Subsection (1)(a) is presumed to be engaging with the intent
680     described in Subsection (1)(b) for purposes of this section.
681          (3) The provisions of this section do not apply to a waiver or offer to waive, rebate,
682     gift, payment, or other offer that falls within a safe harbor:
683          (a) under federal laws related to fraud and abuse regarding patient cost sharing,
684     including federal laws related to anti-kickback, self-referral, false claims, or civil monetary
685     penalties; or
686          (b) described in an advisory opinion issued by the Centers for Medicare and Medicaid
687     Services or the United States Department of Health and Human Services Office of Inspector
688     General related to a federal law described in Subsection (3)(a).
689          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
690     department shall makes rules to implement this section.
691          Section 16. Section 58-17b-605 is amended to read:
692          58-17b-605. Drug product equivalents.
693          (1) For the purposes of this section:
694          (a) (i) "Drug" [is as] means the same as that term is defined in Section 58-17b-102.
695          (ii) "Drug" does not [mean] include a "biological product" as defined in Section
696     58-17b-605.5.
697          (b) "Drug product equivalent" means a drug product that is designated as the
698     therapeutic equivalent of another drug product in the Approved Drug Products with
699     Therapeutic Equivalence Evaluations prepared by the Center for Drug Evaluation and Research
700     of the United States Food and Drug Administration.
701          (2) A pharmacist or pharmacy intern dispensing a prescription order for a specific drug
702     by brand or proprietary name [may] shall substitute a drug product equivalent for the
703     prescribed drug [only] if:
704          [(a) the purchaser specifically requests or consents to the substitution of a drug product
705     equivalent;]
706          [(b)] (a) the drug product equivalent is of the same generic type and is designated the
707     therapeutic equivalent in the approved drug products with therapeutic equivalence evaluations
708     prepared by the Center for Drug Evaluation and Research of the Federal Food and Drug
709     Administration;

710          [(c)] (b) the drug product equivalent is permitted to move in interstate commerce;
711          [(d)] (c) the pharmacist or pharmacy intern counsels the patient on the use and the
712     expected response to the prescribed drug, whether a substitute or not, and the substitution is not
713     otherwise prohibited by this chapter;
714          [(e)] (d) the prescribing practitioner has not indicated that a drug product equivalent
715     may not be substituted for the drug, as provided in Subsection [(6)] (5); and
716          [(f)] (e) the substitution is not otherwise prohibited by law.
717          (3) (a) Each out-of-state mail service pharmacy dispensing a drug product equivalent as
718     a substitute for another drug into this state shall notify the patient of the substitution either by
719     telephone or in writing.
720          (b) Each out-of-state mail service pharmacy shall comply with the requirements of this
721     chapter with respect to a drug product equivalent substituted for another drug, including
722     labeling and record keeping.
723          [(4) Pharmacists or pharmacy interns may not substitute without the prescriber's
724     authorization on trade name drug product prescriptions unless the product is currently
725     categorized in the approved drug products with therapeutic equivalence evaluations prepared
726     by the Center for Drug Evaluation and Research of the Federal Food and Drug Administration
727     as a drug product considered to be therapeutically equivalent to another drug product.]
728          [(5)] (4) A pharmacist or pharmacy intern who dispenses a prescription with a drug
729     product equivalent under this section assumes no greater liability than would be incurred had
730     the pharmacist or pharmacy intern dispensed the prescription with the drug product prescribed.
731          [(6)] (5) (a) If, in the opinion of the prescribing practitioner, it is in the best interest of
732     the patient that a drug product equivalent not be substituted for a prescribed drug, the
733     practitioner may indicate a prohibition on substitution either by writing "dispense as written" or
734     signing in the appropriate space where two lines have been preprinted on a prescription order
735     and captioned "dispense as written" or "substitution permitted".
736          (b) If the prescription is communicated orally by the prescribing practitioner to the
737     pharmacist or pharmacy intern, the practitioner shall indicate the prohibition on substitution
738     and that indication shall be noted in writing by the pharmacist or pharmacy intern with the
739     name of the practitioner and the words "orally by" and the initials of the pharmacist or
740     pharmacy intern written after it.

741          [(7)] (6) A pharmacist or pharmacy intern who substitutes a drug product equivalent
742     for a prescribed drug shall communicate the substitution to the purchaser. The drug product
743     equivalent container shall be labeled with the name of the drug dispensed, and the pharmacist,
744     pharmacy intern, or pharmacy technician shall indicate on the file copy of the prescription both
745     the name of the prescribed drug and the name of the drug product equivalent dispensed in its
746     place.
747          [(8)] (7) (a) For purposes of this Subsection [(8)] (7), "substitutes" means to substitute:
748          (i) a generic drug for another generic drug;
749          (ii) a generic drug for a nongeneric drug;
750          (iii) a nongeneric drug for another nongeneric drug; or
751          (iv) a nongeneric drug for a generic drug.
752          (b) A prescribing practitioner who makes a finding under Subsection [(6)] (5)(a) for a
753     patient with a seizure disorder shall indicate a prohibition on substitution of a drug product
754     equivalent in the manner provided in Subsection [(6)] (5)(a) or (b).
755          (c) Except as provided in Subsection [(8)] (7)(d), a pharmacist or pharmacy intern who
756     cannot dispense the prescribed drug as written, and who needs to substitute a drug product
757     equivalent for the drug prescribed to the patient to treat or prevent seizures shall notify the
758     prescribing practitioner prior to the substitution.
759          (d) Notification under Subsection [(8)] (7)(c) is not required if the drug product
760     equivalent is paid for in whole or in part by Medicaid.
761          [(9)] (8) Failure of a licensed medical practitioner to specify that no substitution is
762     authorized does not constitute evidence of negligence.
763          Section 17. Section 58-17b-605.5 is amended to read:
764          58-17b-605.5. Interchangeable biological products.
765          (1) For the purposes of this section:
766          (a) "Biological product" means the same as that term is defined in 42 U.S.C. Sec. 262.
767          (b) "Interchangeable biological product" means a biological product that the federal
768     Food and Drug Administration:
769          (i) has:
770          (A) licensed; and
771          (B) determined meets the standards for interchangeability pursuant to 42 U.S.C. Sec.

772     262(k)(4); or
773          (ii) has determined is therapeutically equivalent as set forth in the latest edition of or
774     supplement to the federal Food and Drug Administration's Approved Drug Products with
775     Therapeutic Equivalence Evaluations.
776          (2) A pharmacist or pharmacy intern dispensing a prescription order for a specific
777     biological product by brand or proprietary name [may] shall substitute an interchangeable
778     biological product for the prescribed biological product [only] if:
779          [(a) the purchaser specifically requests or consents to the substitute of an
780     interchangeable biological product;]
781          [(b)] (a) the interchangeable biological product is permitted to move in interstate
782     commerce;
783          [(c)] (b) the pharmacist or pharmacy intern counsels the patient on the use and the
784     expected response to the prescribed biological product, whether a substitute or not, and the
785     substitution is not otherwise prohibited by this chapter;
786          [(d)] (c) the prescribing practitioner has not prohibited the substitution of an
787     interchangeable biological product for the prescribed biological product, as provided in
788     Subsection (6); and
789          [(e)] (d) the substitution is not otherwise prohibited by law.
790          (3) Each out-of-state mail service pharmacy dispensing an interchangeable biological
791     product as a substitute for another biological product into this state shall:
792          (a) notify the patient of the substitution either by telephone or in writing; and
793          (b) comply with the requirements of this chapter with respect to an interchangeable
794     biological product substituted for another biological product, including labeling and record
795     keeping.
796          (4) Pharmacists or pharmacy interns may not substitute without the prescriber's
797     authorization biological product prescriptions unless the product has been determined by the
798     United States Food and Drug Administration to be interchangeable with the prescribed
799     biological product.
800          (5) A pharmacist or pharmacy intern who dispenses a prescription with an
801     interchangeable biological product under this section assumes no greater liability than would be
802     incurred had the pharmacist or pharmacy intern dispensed the prescription with the biological

803     product prescribed.
804          (6) (a) If, in the opinion of the prescribing practitioner, it is in the best interest of the
805     patient that an interchangeable biological product not be substituted for a prescribed biological
806     product, the practitioner may prohibit a substitution either by writing "dispense as written" or
807     by signing in the appropriate space where two lines have been preprinted on a prescription
808     order and captioned "dispense as written" or "substitution permitted."
809          (b) (i) If the prescription is communicated orally by the prescribing practitioner to the
810     pharmacist or pharmacy intern, the practitioner shall direct the prohibition or substitution.
811          (ii) The pharmacist or pharmacy intern shall make a written note of the practioner's
812     direction by writing the name of the practitioner and the words "orally by" and the initials of
813     the pharmacist or pharmacy intern written after it.
814          (7) A pharmacist or pharmacy intern who substitutes an interchangeable biological
815     product for a prescribed biological product shall communicate the substitution to the purchaser.
816     The interchangeable biological product container shall be labeled with the name of the
817     interchangeable biological product dispensed, and the pharmacist, pharmacy intern, or
818     pharmacy technician shall indicate on the file copy of the prescription both the name of the
819     prescribed biological product and the name of the interchangeable biological product dispensed
820     in its place.
821          [(8) Within five business days following the dispensing of a biological product, the
822     dispensing pharmacist or the pharmacist's designee shall make an entry of the specific product
823     provided to the patient, including the name of the product and the manufacturer. The
824     communication shall be conveyed by making an entry into an interoperable electronic medical
825     records system, through an electronic prescribing technology, a pharmacy benefit management
826     system, or a pharmacy record that is electronically accessible by the prescriber. Entry into an
827     electronic records system as described in this Subsection (8) is presumed to provide notice to
828     the prescriber. Otherwise, the pharmacist shall communicate the biological product dispensed
829     to the prescriber using facsimile, telephone, electronic transmission, or other prevailing means,
830     provided that communication shall not be required where:]
831          [(a) there is no FDA-approved interchangeable biological product for the product
832     prescribed;]
833          [(b) a refill prescription is not changed from the product dispensed on the prior filling

834     of the prescription; or]
835          [(c) the product is paid for using cash or cash equivalent.]
836          Section 18. Section 58-17c-101 is enacted to read:
837     
CHAPTER 17c. PHARMACEUTICAL SUPPLY ENTITIES

838     
Part 1. Pharmaceutical Supply Chain

839          58-17c-101. Title.
840          This chapter is known as "Pharmaceutical Supply Entities."
841          Section 19. Section 58-17c-102 is enacted to read:
842          58-17c-102. Definitions.
843          As used in this part:
844          (1) "Compensation" means the total payment or transfer of value provided by a
845     pharmaceutical sales representative to a health care entity.
846          (2) "Course of therapy" means the recommended daily dosage units of a drug pursuant
847     to the drug's prescribing label as approved by the United States Food and Drug Administration
848     for:
849          (a) 30 days; or
850          (b) a normal course of treatment that is less than 30 days.
851          (3) "Drug" means a prescription drug as defined in Section 58-17b-102.
852          (4) "Health care entity" means:
853          (a) a health care provider;
854          (b) a pharmacy or pharmacy employee; or
855          (c) an operator or employee of a health care facility.
856          (5) "Health care facility" means the same as that term is defined in Section 26-21-2.
857          (6) "Health care provider" means a person that:
858          (a) meets the definition of a health care provider as defined in Section 78B-3-403; and
859          (b) is licensed under this title.
860          (7) "Pharmaceutical manufacturer" means:
861          (a) a person that is engaged in the manufacturing of a drug or pharmaceutical device
862     that is available for purchase by residents of the state; or
863          (b) a person that is responsible for setting the price of a drug that is available for
864     purchase by residents of the state on behalf of a person described in Subsection (4)(a).

865          (8) "Pharmaceutical sales representative" means a person who engages in prescription
866     drug marketing to a health care entity.
867          (9) "Pharmaceutical wholesaler or distributor" means the same as that term is defined
868     in Section 58-17b-102.
869          (10) "Prescription drug marketing" means to provide to a health care entity, on behalf
870     of a pharmaceutical manufacturer, educational or marketing information or materials regarding
871     a drug that is available to a resident of the state, including through:
872          (a) a face-to-face meeting;
873          (b) a physical mailing;
874          (c) a telephone conversation;
875          (d) electronic mail or facsimile; or
876          (e) an event.
877          (11) "Wholesale acquisition cost" means a pharmaceutical manufacturer's list price:
878          (a) for selling a brand-name or generic drug to a wholesaler or a direct purchaser in the
879     United States;
880          (b) that is the list price:
881          (i) per person, either per year or per course of therapy; and
882          (ii) for the most recent month for which information is available; and
883          (c) that does not include any discounts or rebates.
884          Section 20. Section 58-17c-103 is enacted to read:
885          58-17c-103. Prescription drug marketing -- Reports -- Rulemaking.
886          (1) A pharmaceutical manufacturer shall provide to the division each month a list of all
887     pharmaceutical sales representatives that the pharmaceutical manufacturer employs or has a
888     contract with to engage in prescription drug marketing.
889          (2) The division shall provide to a health care entity electronic access to a list described
890     in Subsection (1).
891          (3) A pharmaceutical sales representative on a list described in Subsection (1):
892          (a) may engage, on behalf of any pharmaceutical manufacturer, in prescription drug
893     marketing to any health care entity; and
894          (b) shall, on or before March 1 each year, submit to the division a report for the
895     immediately preceding calendar year that includes:

896          (i) a list of all health care entities to which the pharmaceutical sales representative
897     provided:
898          (A) compensation for an individual transaction of $10 or more; or
899          (B) compensation for the year totaling a fair market value of $100 or more;
900          (ii) the name and pharmaceutical manufacturer of each drug of which the
901     pharmaceutical sales representative provided a free sample to a health care entity; and
902          (iii) the name of each health care entity to which the pharmaceutical manufacturer
903     provided a free sample of a drug.
904          (4) (a) The division shall develop an annual report, based on the reports to the division
905     described in this section, that includes an analysis of the activities of pharmaceutical sales
906     representatives in the state.
907          (b) The annual report shall include:
908          (i) the names of all pharmaceutical sales representatives included on any list described
909     in Subsection (1);
910          (ii) the names of all pharmaceutical manufacturers that provide to the division a list
911     described in Subsection (1);
912          (iii) the names of all drugs described in Subsection (3)(b)(ii); and
913          (iv) the aggregate number of health care entities described in Subsection (3)(b)(i).
914          (c) On or before June 1 of each year, the division shall:
915          (i) post the annual report on the division's website; and
916          (ii) submit the annual report to the governor and the Business and Labor Interim
917     Committee.
918          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
919     division may establish rules that:
920          (a) provide requirements related to a report to the division described in this section; or
921          (b) provide for administrative penalties against a pharmaceutical manufacturer or a
922     pharmaceutical sales representative that violates the provisions of this section.
923          Section 21. Section 58-17c-104 is enacted to read:
924          58-17c-104. Prescription drug marketing and price information -- Rulemaking.
925          (1) A person that engages in prescription drug marketing to a health care provider with
926     the intent that the health care provider prescribe the drug for use by the health care provider's

927     patients shall provide to the health care provider written materials that include:
928          (a) the date the written materials were prepared;
929          (b) the name of the drug;
930          (c) the name of the pharmaceutical manufacturer that manufactures the drug;
931          (d) the average wholesale price of the drug for each labeled indication, including any
932     differences in the average wholesale price as a result of different strengths or dosage forms
933     approved for sale; and
934          (e) (i) if the drug is designed to be administered for 30 days or more, the average
935     wholesale price of a 30-day supply of the drug; or
936          (ii) if the drug is designed to be administered for less than 30 days:
937          (A) the period of time for which the drug is designed to be administered; and
938          (B) the average wholesale price for the period of time described in Subsection
939     (1)(e)(ii)(A).
940          (2) A person shall provide the written materials described in Subsection (1) to the
941     health care provider at the earlier of the following:
942          (a) the time the person provides any written materials as part of the prescription drug
943     marketing to the health care provider; or
944          (b) within one business day of the person engaging in the prescription drug marketing
945     to the health care provider.
946          (3) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
947     division shall make rules to implement and enforce the provisions of this section.
948          Section 22. Section 58-17c-105 is enacted to read:
949          58-17c-105. Availability of drug for testing -- Liability for injury -- Enforcement.
950          (1) As used in this section:
951          (a) "Application" means an application for:
952          (i) the approval of a drug under the Food, Drug, and Cosmetic Act, Sec. 505(b) or (j),
953     21 U.S.C. Sec. 355c(1)(A); or
954          (ii) the licensing of a biological product under the Public Health Service Act, Sec. 351,
955     42 U.S.C. Sec. 262(a)(1).
956          (b) "Developer" means a person seeking to submit an application.
957          (2) (a) In accordance with Subsection (2)(b), a pharmaceutical manufacturer or a

958     pharmaceutical wholesaler or distributor shall, for a developer, make available for sale a drug
959     distributed in the state for the purpose of conducting testing required to support the application.
960          (b) A pharmaceutical manufacturer or a pharmaceutical wholesaler or distributor shall
961     make the drug available for sale under Subsection (2)(a):
962          (i) at a price no higher than the drug's wholesale acquisition cost; and
963          (ii) without any restriction that would block or delay the application.
964          (3) A developer that buys a drug made available for sale in accordance with Subsection
965     (2) may not charge a consumer a higher price for the drug than the price for which the person
966     bought the drug.
967          (4) A pharmaceutical manufacturer or a pharmaceutical wholesaler or distributor that
968     makes available a drug for sale under Subsection (2)(a) is not liable for a claim arising out of
969     the failure of a developer that buys the drug to follow adequate safeguards to assure safe use of
970     the drug during the testing described in Subsection (2)(a), including:
971          (a) transportation;
972          (b) handling;
973          (c) use; or
974          (d) disposal of the drug.
975          (5) (a) Notwithstanding any other provision of law, the attorney general may seek
976     injunctive relief against a pharmaceutical manufacturer or a pharmaceutical wholesaler or
977     distributer that violates the provisions of this section.
978          (b) If the attorney general prevails in an action described in Subsection (5)(a), the court
979     shall order the pharmaceutical manufacturer or a pharmaceutical wholesaler or distributer costs
980     and attorney fees.
981          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
982     division may make rules regarding the implementation and enforcement of the provisions of
983     this section.