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7 LONG TITLE
8 General Description:
9 This bill requires a prescription drug manufacturer to provide notice of certain drug cost
10 increases and requires the Insurance Department to publish related information.
11 Highlighted Provisions:
12 This bill:
13 ▸ defines terms;
14 ▸ requires a drug manufacturer to notify and provide information to a purchaser if an
15 increase in the wholesale acquisition cost of a drug meets certain criteria;
16 ▸ requires a drug manufacturer that is required to provide notice to submit certain
17 information to the Insurance Department;
18 ▸ requires a drug manufacturer that introduces a new drug to market to report certain
19 information to the Insurance Department;
20 ▸ requires the Insurance Department to publish information it receives from drug
21 manufacturers;
22 ▸ requires rulemaking; and
23 ▸ creates a penalty.
24 Money Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 None
28 Utah Code Sections Affected:
29 ENACTS:
30 31A-47-101, Utah Code Annotated 1953
31 31A-47-102, Utah Code Annotated 1953
32 31A-47-103, Utah Code Annotated 1953
33 31A-47-104, Utah Code Annotated 1953
34 31A-47-105, Utah Code Annotated 1953
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36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 31A-47-101 is enacted to read:
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39 31A-47-101. Title.
40 This chapter is known as "Prescription Drug Price Transparency."
41 Section 2. Section 31A-47-102 is enacted to read:
42 31A-47-102. Definitions.
43 As used in this chapter:
44 (1) "Drug" means a prescription drug, as defined in Section 58-17b-102.
45 (2) "Health insurer" means:
46 (a) an insurer that offers health care insurance;
47 (b) the Public Employees' Benefit and Insurance Program created in Section
48 49-20-103; or
49 (c) a workers' compensation insurer that is:
50 (i) authorized to provide workers' compensation insurance in the state; or
51 (ii) a self-insured employer as defined in Section 34A-2-201.5.
52 (3) "Manufacturer" means a person that is engaged in the manufacturing of a drug that
53 is available for purchase by residents of the state.
54 (4) "Purchaser" means a:
55 (a) health insurer;
56 (b) pharmacy service entity as defined in Section 31A-46-302; or
57 (c) department, division, or other agency or instrumentality of the state, including an
58 independent state agency as defined in Section 63E-1-102.
59 (5) "Wholesale acquisition cost" means the same as that term is defined in 42 U.S.C.
60 Sec. 1395w-3a.
61 Section 3. Section 31A-47-103 is enacted to read:
62 31A-47-103. Manufacturer notice of drug cost increase.
63 (1) As used in this section:
64 (a) (i) "Qualified drug" means a drug whose wholesale acquisition cost increases 10%
65 or more over a 12-month period.
66 (ii) "Qualified drug" does not include a new drug introduced into the market by a
67 manufacturer.
68 (b) "Registered purchaser" means a purchaser that submits a request for notice to the
69 department under Subsection 31A-47-105(2)(b).
70 (2) A manufacturer shall send a notice in accordance with this section for each
71 qualified drug no later than 60 days before the day on which the increase to the wholesale
72 acquisition cost of the qualified drug results in a one-year percentage increase greater than or
73 equal to 10%.
74 (3) A manufacturer shall send a notice to each registered purchaser that includes:
75 (a) the date on which the wholesale acquisition cost of the qualified drug will increase;
76 (b) a description of any improvements or other changes to the qualified drug that
77 makes the increase in the wholesale acquisition cost of the qualified drug necessary;
78 (c) the wholesale acquisition cost of the qualified drug after the increase to the
79 wholesale acquisition cost;
80 (d) the amount of the increase to the wholesale acquisition cost of the qualified drug;
81 (e) the percentage increase to the wholesale acquisition cost of the qualified drug;
82 (f) the wholesale acquisition cost of the qualified drug 12 months before the date of the
83 increase to the wholesale acquisition cost of the qualified drug;
84 (g) the amount of the increase in the wholesale acquisition cost over the 12-month
85 period immediately before the increase in the wholesale acquisition cost of the qualified drug;
86 and
87 (h) the percentage increase in the wholesale acquisition cost of the qualified drug over
88 the 12-month period immediately before the increase in the wholesale acquisition cost of the
89 qualified drug.
90 (4) Except as provided in Subsection (5), a manufacturer shall send a notice to the
91 department that includes:
92 (a) the information described in Subsection (3);
93 (b) an explanation of how financial and nonfinancial factors justify the increase in the
94 wholesale acquisition cost of the qualified drug, including any improvement or other
95 modification of the qualified drug;
96 (c) (i) for a qualified drug that has been manufactured by the manufacturer for longer
97 than the previous five years, the wholesale acquisition cost of the qualified drug over the
98 previous five-year period; or
99 (ii) for a qualified drug that has been manufactured by the manufacturer for less than
100 five years:
101 (A) the date on which the manufacturer began manufacturing the qualified drug;
102 (B) the date on which the manufacturer began selling the qualified drug; and
103 (C) the wholesale acquisition cost of the qualified drug over the period beginning on
104 the day on which the manufacturer began selling the qualified drug; and
105 (d) for a qualified drug that the manufacturer acquired the right to manufacture within
106 the previous five years, to the extent the information is publicly available:
107 (i) the name of the person from which the manufacturer acquired the right to
108 manufacture the qualified drug;
109 (ii) the wholesale acquisition cost of the qualified drug immediately before the
110 manufacturer acquired the right to manufacture the qualified drug; and
111 (iii) the wholesale acquisition cost of the qualified drug one year before the day on
112 which the manufacturer acquired the right to manufacture the qualified drug.
113 (5) A manufacturer is not required to report a trade secret as defined in Section
114 13-24-2, in the notice to the department under Subsection (4).
115 Section 4. Section 31A-47-104 is enacted to read:
116 31A-47-104. Manufacturer submission of new drug information to the
117 department -- Report of new drug.
118 If a new drug available for purchase by residents of the state has a wholesale acquisition
119 cost that exceeds the upper limit of payment for the new drug under 42 C.F.R. Sec. 447.512,
120 the manufacturer of the new drug shall submit to the department:
121 (1) no later than three days after the day on which the new drug is sold in the state, a
122 written notice of the introduction of the new drug; and
123 (2) no later than 30 days after the day on which the new drug is sold in the state, a
124 report that includes publicly available information regarding:
125 (a) the wholesale acquisition cost of the new drug;
126 (b) a description of the marketing and pricing plans used in the launch of the new drug:
127 (i) in the United States; and
128 (ii) outside of the United States;
129 (c) the estimated number of patients that are expected to be prescribed the new drug;
130 (d) whether the new drug was granted breakthrough therapy designation or priority
131 review by the United States Food and Drug Administration; and
132 (e) if the manufacturer did not develop the drug, the acquisition date and price for the
133 new drug.
134 Section 5. Section 31A-47-105 is enacted to read:
135 31A-47-105. Publication of information submitted to the department --
136 Rulemaking -- Penalties.
137 (1) The department shall publish on the department's website the information
138 submitted by a manufacturer under Sections 31A-47-103 and 31A-47-104 no later than 60 days
139 after the day on which the department receives the information from the manufacturer.
140 (2) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
141 Administrative Rulemaking Act, regarding:
142 (a) the format for a manufacturer to submit a notice under Sections 31A-47-103 and
143 31A-47-104;
144 (b) procedures for a purchaser to register to receive notice of a drug price increase as a
145 registered purchaser under Section 31A-47-103; and
146 (c) procedures for a manufacturer to obtain the contact information for each registered
147 purchaser.
148 (3) The department may impose a penalty of up to $1,000 per day for each day a
149 manufacturer is in violation of this chapter.