Summary: HB18-1260 requires the following from prescription drug manufacturers:
- Manufacturers must report 25 of the most frequently prescribed drugs, 25 of the costliest prescription drugs by total annual plan spending, and 25 of the prescription drugs with the highest increase in total annual plan spending when compared with the total annual plan spending for the same drugs in previous years.
- As part of the health care cost reporting requirement, health insurers must submit information regarding the prescription drugs covered under their respective plans that were dispensed to the Division of Insurance (DOI) the previous year.
- Prescription drug manufacturers must notify health insurers, state purchasers, and pharmaceutical benefit management firms when the price of certain prescription drugs increases by more than 10% or when they introduce a new specialty drug to the commercial market.
- For any prescription drug calling for a price increase, a statement with the description of the change and/or improvement must be submitted.
- New specialty drugs must provide a description of the financial and nonfinancial factors (i.e. shadow pricing, off-label usage, etc) used to make the decision to increase the cost of the drug and explanation of how the factors drive the cost.
- Near the end of each quarter, prescription drug manufacturers are required to provide information to the commissioner regarding the prescription drugs that require a price increase and/or new specialty drug.
The commissioner will make the information received from prescription drug manufacturers public on the DOI’s website. The information acquired from prescription drug manufacturers, health insurance agencies, and any other entities will be analyzed by the commissioner, or a third party, to determine prescription drug cost on health insurance premiums.
The commissioner is then responsible for publishing an annual report that will be submitted to specified legislative committees and will be presented to the ‘SMART Gov. Act’ hearings. A pharmaceutical drug company that fails to report required data to the commissioner will be disciplined by the State Board of Pharmacy and fined $1K for each day they fail to comply. The commissioner may adopt rules, as needed, to implement this process/rules.