2018 -- S 2550

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LC004883

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

     

     Introduced By: Senators Satchell, Miller, DaPonte, and Lombardo

     Date Introduced: March 01, 2018

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS"

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is hereby amended by adding thereto the following chapter:

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CHAPTER 19.3

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PHARMACEUTICAL COST TRANSPARENCY

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     5-19.3-1. Definitions.

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     As used in this chapter:

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     (1) "Board" means the state board of pharmacy created pursuant to §5-19.1-3.

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     (2) "Department" means the Rhode Island department of health.

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     (3) "Manufacturer" means a person or entity licensed to manufacture legend drugs

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pursuant to §5-19.1-12.

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     (4) "Prescription drug" means a drug as defined in 21 U.S.C. §321. The term also

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includes a biological product as defined in the "Public Health Service Act," 42 U.S.C. §262.

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     5-19.3-2. Board to develop list of critical prescription drugs.

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     (a) The board, in consultation with the department, shall develop a list of critical

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prescription drugs for which there is a substantial public interest in understanding the

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development of its pricing. In developing the list, the board shall consider the following factors:

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     (1) The cost of the drug to public health care programs, including Medicaid and

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HealthSource RI;

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     (2) The current cost of the drug in the state;

 

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     (3) The extent of utilization of the drug within the state; and

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     (4) The potential impact of the cost of the drug on the overall health of the state's

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population.

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     (b) For each prescription drug that the board places on the critical prescription drug list

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pursuant to subsection (a) of this section, the board shall require the manufacturers of said

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prescription drug to report the following information to the board:

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     (1) Total cost of production, and approximate cost of production per dose;

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     (2) Research and development costs of the drug, including:

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     (i) Research and development costs that are paid with public funds;

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     (ii) After-tax research and development costs paid by the manufacturer; and

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     (iii) Research and development costs paid by third parties;

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     (4) Marketing and advertising costs for the drug, apportioned by marketing activities that

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are directed to consumers, marketing activities that are directed to prescribers, and the total cost

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of all marketing and advertising that is directed primarily to Rhode Island consumers and

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prescribers;

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     (5) The prices for the drug that are charged to purchasers outside the United States, by

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country, for a representative set of countries determined by the board;

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     (6) Prices charged to typical Rhode Island purchasers, including, but not limited to,

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pharmacies, pharmacy chains, pharmacy wholesalers, or other direct purchasers; and

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     (7) True net typical prices charged to prescription drug benefit managers for distribution

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in Rhode Island, net of any rebates or other payments from the manufacturer to the pharmacy

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benefit manager and the pharmacy benefit manager to the manufacturer.

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     (c) The board shall promulgate regulations to further define and enforce the provisions of

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this section, which may include monetary penalties for failure to comply with the requirements of

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this section.

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     (d) Information reported pursuant to subsection (b) of this section shall not be considered

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a public record under chapter 2 of title 38, "access to public records." Any and all public

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reporting of information submitted pursuant to subsection (b) of this section shall be aggregated

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as to protect the financial, competitive, or proprietary nature of the information.

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     (e) The board, with the assistance of the department, shall prepare an annual report on

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prescription drug prices and their role in overall health care spending in the state based on the

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data submitted to the board pursuant to subsection (b) of this section and in conformance with the

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provisions of subsection (d) of this section. As part of the report, the board may include

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recommendations for actions to lower prescription drug costs and spending across the state while

 

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maintaining access to quality health care. The board's report shall be posted on the board's

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website and shall be filed with the clerks of the house of representatives and the senate, each year

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on or before January 1 commencing with the first report due January 1, 2019.

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     5-19.3-3. Identification of high cost drugs.

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     (a) The board shall identify, using information submitted to the board pursuant to §5-

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19.3-2, those prescription drugs that due to their cost, jeopardize the state's ability to meet needs

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of the state's population for that drug. In reviewing the data, the board shall review and consider

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all data reported to the board and the department and determine whether the price of the

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prescription drug is significantly high given:

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     (1) The prescription drug's medical benefits;

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     (2) The cost to develop and manufacture the prescription drug; and

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     (3) The prices charged by the manufacturer in other countries.

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     (b) If the board determines that the cost of a prescription drug is so high that it

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jeopardizes the state's ability to meet the needs of the state's population for that drug, then the

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board may set the maximum allowable price that the manufacturer can charge for that

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prescription drug that is sold for use in the state.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

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     This act would direct the state board of pharmacy, in collaboration with the Rhode Island

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department of health, to annually develop a list of critical prescription drugs for which there is a

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substantial public interest in understanding the development of the drugs' price. The act would

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also authorize the board to obtain certain information from manufacturers of the critical

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prescription drugs. The act would also allow the commission to set the maximum allowable price

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that a manufacturer can charge for a prescription drug if the commission determines that the cost

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of a prescription drug is significantly high.

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     This act would take effect upon passage.

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