H.F. 2253 Section 1. NEW SECTION . 510D.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. “Commissioner” means the commissioner of insurance. 4 2. “Dispenser” means the same as defined in 21 U.S.C. 5 §360eee(3). 6 3. “Established name” means the same as defined in 21 C.F.R. 7 299.4. 8 4. “Health benefit plan” means the same as defined in 9 514J.102. 10 5. “Pharmaceutical drug manufacturer” or “manufacturer” means 11 any person engaged in the business of producing, preparing, 12 converting, processing, packaging, labeling, or distributing 13 a prescription drug. “Pharmaceutical drug manufacturer” or 14 “manufacturer” does not include a wholesale distributor or a 15 dispenser. 16 6. “Prescription drug” means the same as defined in 21 17 U.S.C. §360eee(12). 18 7. “Wholesale acquisition cost” or “cost” means a 19 manufacturer’s list price for a prescription drug for 20 wholesalers or direct purchasers in the United States, not 21 including prompt pay or other discounts, rebates, or reductions 22 in price, for the most recent month for which the information 23 is available, as reported in wholesale price guides or other 24 publications of drug or biological pricing data. 25 8. “Wholesale distributor” means the same as defined in 21 26 U.S.C. §360eee(29). 27 Sec. 2. NEW SECTION . 510D.2 Pharmaceutical drug 28 manufacturers —— annual report. 29 Each manufacturer shall provide an annual report by 30 February 15 to the commissioner, in a format prescribed 31 by the commissioner, that contains the current wholesale 32 acquisition cost for each prescription drug manufactured by the 33 manufacturer that was sold to a person in this state in the 34 immediately preceding calendar year. Within thirty calendar 35 -1- LSB 5492YH (2) 88 ko/rn 1/ 9

H.F. 2253 days of receipt, the commissioner shall publish the information 1 received by the commissioner on a publicly accessible internet 2 site. 3 Sec. 3. NEW SECTION . 510D.3 Wholesale acquisition cost 4 increase —— report. 5 1. If a prescription drug sold to a person in this state 6 has a wholesale acquisition cost of one hundred dollars or 7 more for a thirty-day supply and the cost increases forty 8 percent or more over three consecutive calendar years, or 9 increases fifteen percent or more in a single calendar year, 10 the manufacturer of the prescription drug shall file a report 11 with the commissioner within thirty calendar days of the date 12 on which the forty or the fifteen percent increase in the cost 13 occurs. The report shall be in the form and manner prescribed 14 by the commissioner and shall include all of the following 15 information: 16 a. The established name of the prescription drug. 17 b. All brand names, generic names, proprietary names, and 18 nonproprietary names for the prescription drug, as applicable. 19 c. The aggregate manufacturer-level research and development 20 costs related to the prescription drug for the most recent 21 calendar year for which third-party independent audit data for 22 manufacturer-level research and development costs is available. 23 d. All established names, brand names, generic names, 24 proprietary names, and nonproprietary names for each 25 prescription drug manufactured by the manufacturer that 26 received approval from the United States food and drug 27 administration in the immediately preceding three consecutive 28 calendar years. 29 e. All established names, brand names, generic names, 30 proprietary names, and nonproprietary names for each 31 prescription drug manufactured by the manufacturer for which 32 a patent or exclusivity expired in the immediately preceding 33 three consecutive calendar years. 34 f. A statement detailing the factor or factors that played 35 -2- LSB 5492YH (2) 88 ko/rn 2/ 9

H.F. 2253 any role in the increase in cost of the prescription drug 1 and an explanation for the factor or factors’ impact on the 2 increase in cost of the prescription drug. 3 2. All information and data a manufacturer submits to the 4 commissioner must be consistent in detail and quality with the 5 information and data submitted in the manufacturer’s annual 6 report filed with the United States securities and exchange 7 commission on form 10-k. 8 3. a. Information provided by a pharmaceutical drug 9 manufacturer to the commissioner pursuant to this section 10 that may reveal any of the following as related to a specific 11 prescription drug or class of prescription drugs shall 12 be considered a confidential record, and be recognized 13 and protected as a trade secret pursuant to section 22.7, 14 subsection 3: 15 (1) The amount the manufacturer charges a specific health 16 carrier, specific pharmacy benefit manager, or a specific 17 dispenser. 18 (2) The dollar value of the rebates the manufacturer 19 provides a specific health carrier, specific pharmacy benefit 20 manager, or a specific dispenser. 21 (3) The identity of a specific health carrier, specific 22 pharmacy benefit manager, or a specific dispenser. 23 b. Within sixty calendar days of receipt of the information 24 pursuant to this section, the commissioner shall publish all 25 nonconfidential information received by the commissioner on the 26 same publicly accessible internet site referenced in section 27 510D.2. 28 Sec. 4. NEW SECTION . 510D.4 Rules. 29 The commissioner shall adopt rules pursuant to chapter 17A 30 as necessary to administer this chapter. 31 Sec. 5. NEW SECTION . 510D.5 Enforcement. 32 The commissioner may take any action within the 33 commissioner’s authority to enforce compliance with this 34 chapter. 35 -3- LSB 5492YH (2) 88 ko/rn 3/ 9

H.F. 2253 Sec. 6. NEW SECTION . 510E.1 Definitions. 1 As used in this chapter unless the context otherwise 2 requires: 3 1. “Commissioner” means the commissioner of insurance. 4 2. “Covered person” means the same as defined in section 5 514J.102. 6 3. “Health benefit plan” means the same as defined in 7 section 514J.102. 8 4. “Health care professional” means the same as defined in 9 section 514J.102. 10 5. “Health carrier” means the same as defined in section 11 514J.102. 12 6. “Pharmaceutical drug manufacturer” or “manufacturer” means 13 any person engaged in the business of producing, preparing, 14 converting, processing, packaging, labeling, or distributing 15 a prescription drug. “Pharmaceutical drug manufacturer” or 16 “manufacturer” does not include a wholesale distributor or a 17 dispenser. 18 7. “Prescription drug” means the same as defined in 21 19 U.S.C. §360eee(12). 20 8. “Prescription drug benefit” means a health benefit 21 plan providing for third-party payment or prepayment for 22 prescription drugs. 23 9. “Specialty drug” means a prescription drug that a health 24 carrier has designated as a specialty drug and that has either 25 of the following characteristics: 26 a. The United States food and drug administration has 27 designated the prescription drug an orphan drug. 28 b. The manufacturer of the prescription drug or the United 29 States food and drug administration restricts distribution of 30 the prescription drug to a limited number of distributors. 31 10. “Utilization review” means the same as defined in 32 section 514F.7. 33 11. “Utilization review organization” means the same as 34 defined in section 514F.7. 35 -4- LSB 5492YH (2) 88 ko/rn 4/ 9

H.F. 2253 Sec. 7. NEW SECTION . 510E.2 Health carriers —— annual 1 report. 2 1. Each health carrier shall submit an annual report 3 by February 1 to the commissioner, in the form and manner 4 prescribed by the commissioner, that contains the following 5 information for the immediately preceding calendar year, across 6 all of the health carrier’s health benefit plans that offer a 7 prescription drug benefit: 8 a. The brand name of the twenty-five prescription drugs most 9 frequently covered by the prescription drug benefits offered 10 by the health carrier. 11 b. The percent increase in annual spending by the health 12 carrier to provide all prescription drug benefits offered by 13 the health carrier. 14 c. The percent increase in premiums paid by covered persons 15 attributable to all prescription drug benefits offered by the 16 health carrier. 17 d. The percentage of specialty drugs included in all 18 prescription drug benefits offered by the health carrier that 19 are subject to utilization review conducted by a utilization 20 review organization. 21 e. The percent decrease in premiums paid by covered persons 22 attributable to specialty drugs that are subject to utilization 23 review conducted by a utilization review organization that 24 are included in all prescription drug benefits offered by the 25 health carrier. 26 2. Any information a health carrier provides to the 27 commissioner pursuant to subsection 1 that may reveal any of 28 the following shall be considered a confidential record, and be 29 recognized and protected as a trade secret pursuant to section 30 22.7: 31 a. The identity of a specific health benefit plan. 32 b. The identity of the specific price charged by a specific 33 manufacturer, pharmacy benefit manager, or dispenser for a 34 specific prescription drug or class of prescription drugs. 35 -5- LSB 5492YH (2) 88 ko/rn 5/ 9

H.F. 2253 c. The dollar value of the rebates a specific manufacturer, 1 a specific pharmacy benefit manager, or a specific dispenser 2 provides to the health carrier. 3 3. Prior to May 1 of each calendar year, the commissioner 4 shall publish the nonconfidential data received by the 5 commissioner pursuant to this section on the same publicly 6 accessible internet site referenced in section 510D.2. The 7 data shall be aggregated from all annual reports submitted 8 pursuant to subsection 1, and the information shall be 9 made available to the public in a format that complies with 10 subsection 2. 11 Sec. 8. NEW SECTION . 510E.3 Rules. 12 The commissioner shall adopt rules pursuant to chapter 17A 13 as necessary to administer this chapter. 14 Sec. 9. NEW SECTION . 510E.4 Enforcement. 15 The commissioner may take any action within the 16 commissioner’s authority to enforce compliance with this 17 chapter. 18 Sec. 10. APPLICABILITY. 19 1. The section of the Act that requires a pharmaceutical 20 drug manufacturer to submit an annual report to the 21 commissioner containing the current wholesale acquisition cost 22 for each of the manufacturer’s prescription drugs is applicable 23 to all manufacturers that manufactured any prescription drug 24 that is sold to a person in this state on or after January 1, 25 2021. 26 2. The section of the Act that requires a pharmaceutical 27 drug manufacturer to submit an annual report to the 28 commissioner containing information related to an increase 29 in the wholesale acquisition cost of a prescription drug 30 manufactured by the manufacturer is applicable to all 31 manufacturers that manufactured any prescription drug that is 32 sold to a person in this state on or after January 1, 2021. 33 3. The section of the Act that requires a health carrier 34 to submit an annual report to the commissioner related to all 35 -6- LSB 5492YH (2) 88 ko/rn 6/ 9

H.F. 2253 of the health carrier’s health benefit plans that offer a 1 prescription drug benefit is applicable to all health benefit 2 plans providing for third-party payment or prepayment of health 3 or medical expenses that provide a prescription drug benefit 4 that have been delivered, issued for delivery, continued, or 5 renewed in this state on or after January 1, 2021. 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 This bill relates to price transparency for prescription 10 drugs sold in this state. 11 The bill requires a manufacturer to file an annual report 12 with the commissioner of insurance (commissioner) that 13 discloses the wholesale acquisition cost for all prescription 14 drugs manufactured by the manufacturer that were sold to a 15 person in this state in the immediately preceding calendar 16 year. “Wholesale acquisition cost” or “cost” is defined in the 17 bill as the manufacturer’s list price for a prescription drug 18 for wholesalers or direct purchasers in the United States, not 19 including prompt pay or other discounts, rebates, or reductions 20 in price, for the most recent month for which the information 21 is available, as reported in wholesale price guides or other 22 publications of drug or biological pricing data. Within 30 23 calendar days of receipt, the commissioner is required to 24 publish this information from the annual reports on a publicly 25 accessible internet site. 26 If a prescription drug sold to a person in this state has a 27 cost of $100 or more for a 30-day supply and the cost increases 28 40 percent or more over three consecutive calendar years, or 29 increases 15 percent or more in a single calendar year, the 30 manufacturer of the prescription drug must file a report with 31 the commissioner within 30 calendar days of the date on which 32 the 40 or 15 percent increase in cost occurs. This requirement 33 is applicable to all manufacturers that manufactured 34 prescription drugs that are sold to a person in this state 35 -7- LSB 5492YH (2) 88 ko/rn 7/ 9

H.F. 2253 on or after January 1, 2021. The report must include the 1 information detailed in the bill. Certain information provided 2 by a manufacturer, as detailed in the bill, is considered a 3 confidential record and is required to be protected as a trade 4 secret. Within 60 calendar days of receipt, the commissioner 5 is required to publish the nonconfidential information on 6 the same publicly accessible internet site on which the 7 manufacturer’s annual report information is published. 8 The bill requires each health carrier to submit an annual 9 report by February 1 to the commissioner that contains 10 information as detailed in the bill across all of the health 11 carrier’s health benefit plans. This requirement is applicable 12 to all health benefit plans providing for third-party payment 13 or prepayment of health or medical expenses that provide a 14 prescription drug benefit that have been delivered, issued 15 for delivery, continued, or renewed in this state on or after 16 January 1, 2021. “Health carrier” is defined in the bill as an 17 entity subject to the insurance laws and regulations of this 18 state, or subject to the jurisdiction of the commissioner, 19 including an insurance company offering sickness and accident 20 plans, a health maintenance organization, a nonprofit health 21 service corporation, a plan established pursuant to Code 22 chapter 509A for public employees, or any other entity 23 providing a plan of health insurance, health care benefits, 24 or health care services. Certain information provided by 25 a health carrier, as detailed in the bill, is considered a 26 confidential record and must be protected as a trade secret. 27 Prior to May 1 of each year, the commissioner must publish the 28 nonconfidential data received by the commissioner on the same 29 publicly accessible internet site on which the manufacturers’ 30 information is published. The data must be aggregated from the 31 annual reports submitted by all health carriers. 32 The bill directs the commissioner to adopt rules as 33 necessary to administer the requirements outlined in the 34 bill and allows the commissioner to take any action within 35 -8- LSB 5492YH (2) 88 ko/rn 8/ 9