Further Expand Drug Price Transparency

Last updated: May 13, 2019

Details about this bill
Category: Pharmacy Related
Status: In Senate
Sponsor: Senator Eloise Vitelli, Senate 19 - Oxford County
Session: 129
Bill #: LD 1162

Position:

Monitoring.

UPDATE: The committee amended the bill and passed it unanimously.

Summary:

This bill requires that, if a prescription drug has a wholesale acquisition cost of more than $40 for a course of therapy and there is an increase in the wholesale acquisition cost of that prescription drug of more than 16%, including the proposed increase and the cumulative increases that occurred within the previous two calendar years prior to the current year, the manufacturer of the prescription drug must provide notice to certain registered purchasers.

Under current law the Maine Health Data Organization, referred to as the "organization," is required to collect and report information with regard to the 25 prescription drugs that are the most frequently prescribed in the State, the 25 costliest as determined by the total amount spent on those drugs in the State and the 25 drugs that have the highest year-over-year cost increases in total spending in the State. This bill requires the organization to post online a list of the identified prescription drugs, along with the corresponding wholesale acquisition cost and the percentage of wholesale acquisition cost increase, if applicable, for each identified prescription drug.

The bill directs the organization to develop a plan to collect data from manufacturers that will help explain how prescription drug prices are established. The organization is required to work with other state and national agencies and organizations to determine how to conduct the data collection. The organization is required to submit the plan as well as any recommendations for legislation to the joint standing committee of the Legislature having jurisdiction over judiciary matters by April 1, 2020. That committee may report out legislation to the First or Second Regular Session of the 130th Legislature.

Using the plan developed and reported to the Legislature, starting in 2021 the organization must require the manufacturer of each drug on the list to disclose drug production, research and development costs, marketing and advertising costs and actual costs paid by purchasers. The manufacturer must certify the accuracy of the information and provide it within 60 days after the information is requested by the organization. The organization is authorized to request additional information related to the required information.

The information that the manufacturers are directed to provide to the organization, unless the information is already publicly accessible or available or previously released in the public domain, must be held confidential at the request of the manufacturer. The organization may release information that was previously accessible or available or released in the public domain. The organization may release additional information as long as the information released is not a trade secret. The organization must treat the information as "Level II" information as required by rules that have already been adopted by the organization.

This amendment provides that the manufacturer may voluntarily provide any other information the manufacturer determines relevant to the increase in wholesale acquisition cost, including but not limited to information about all manufacturer-sponsored assistance programs for that drug in the previous year, including the terms of the programs, the total amount of financial assistance provided to residents of the State and the average amount of assistance per resident of the State for whom assistance was provided. This information is not considered confidential and the organization may release it, identifying both the manufacturer and the individual drug.

The organization is required to submit an annual report to the Legislature based on the list of up to 75 drugs and the wholesale acquisition cost information. The organization may include in the report recommendations for increasing prescription drug pricing transparency. Once the organization starts collecting information from manufacturers in 2021, the report must also include at least a summary of the manufacturer information. The organization is required to post the report online.

The bill provides that when a manufacturer violates the reporting requirements, the Board of Directors of the Maine Health Data Organization may impose a fine of not more than $10,000 per day after the deadline for reporting required information. If the manufacturer fails to pay a fine, or if an injunction is necessary, the board may refer the matter to the Attorney General. The Attorney General may bring an action in Superior Court for injunctive relief, enforcement of fines, costs, attorney's fees and any other appropriate remedy.

The legislation does not restrict the legal ability of a prescription drug manufacturer to change prices to the extent permitted under federal law.