H.F. _____ 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 1115YC (8) 89 ko/rn 1/ 13

H.F. _____ 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 more 7 for a thirty-day supply and the cost increases forty percent 8 or more over the three preceding consecutive calendar years, 9 or increases fifteen percent or more in the preceding calendar 10 year, the manufacturer of the prescription drug shall file a 11 report with the commissioner within thirty calendar days of the 12 date on which the forty percent or the fifteen percent increase 13 in the cost occurs. The report shall be in the form and manner 14 prescribed by the commissioner and shall include all of the 15 following 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 1115YC (8) 89 ko/rn 2/ 13

H.F. _____ 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 g. The aggregate manufacturer-level direct and 4 administrative costs related to marketing and advertising of 5 the prescription drug for the immediately preceding calendar 6 year. 7 2. All information and data a manufacturer submits to the 8 commissioner must be consistent in detail and quality with the 9 information and data submitted in the manufacturer’s annual 10 report filed with the United States securities and exchange 11 commission on form 10-k. 12 3. a. Information provided by a pharmaceutical drug 13 manufacturer to the commissioner pursuant to this section 14 that may reveal any of the following as related to a specific 15 prescription drug or class of prescription drugs shall 16 be considered a confidential record, and be recognized 17 and protected as a trade secret pursuant to section 22.7, 18 subsection 3: 19 (1) The amount the manufacturer charges a specific health 20 carrier, specific pharmacy benefit manager, or a specific 21 dispenser. 22 (2) The dollar value of the rebates the manufacturer 23 provides a specific health carrier, specific pharmacy benefit 24 manager, or a specific dispenser. 25 (3) The identity of a specific health carrier, specific 26 pharmacy benefit manager, or a specific dispenser. 27 b. Within sixty calendar days of receipt of the information 28 pursuant to this section, the commissioner shall publish all 29 nonconfidential information received by the commissioner on the 30 same publicly accessible internet site referenced in section 31 510D.2. 32 Sec. 4. NEW SECTION . 510D.4 Rules. 33 The commissioner shall adopt rules pursuant to chapter 17A 34 as necessary to administer this chapter. 35 -3- LSB 1115YC (8) 89 ko/rn 3/ 13

H.F. _____ Sec. 5. NEW SECTION . 510D.5 Summary enforcement. 1 1. Upon a determination by the commissioner that a 2 manufacturer or manufacturer’s agent has engaged, is engaging, 3 or is about to engage in any act or practice in violation of 4 this chapter, a rule adopted by the commissioner, or an order 5 issued by the commissioner under this chapter, the commissioner 6 may do any of the following: 7 a. Issue a summary order, including a brief statement 8 of findings of fact and conclusions of law, and direct the 9 manufacturer or manufacturer’s agent to cease and desist from 10 engaging in the act or practice. 11 b. Take other affirmative action that in the judgment of 12 the commissioner is necessary to ensure that the manufacturer 13 or manufacturer’s agent comply with this chapter, and rules 14 adopted and orders issued by the commissioner under this 15 chapter. 16 2. a. A manufacturer or manufacturer’s agent that has 17 been issued a summary order under this section may contest 18 the order by filing a request for a contested case proceeding 19 and hearing as provided in chapter 17A, and in accordance 20 with rules adopted by the commissioner. The manufacturer or 21 manufacturer’s agent shall have at least thirty calendar days 22 from the date that the summary order is issued to file the 23 request. If a hearing is not timely requested, the summary 24 order shall be final by operation of law. 25 b. Section 17A.18A shall not apply to a summary order issued 26 under this section. 27 c. A summary order issued pursuant to this section shall 28 remain effective from the date of issuance unless overturned by 29 a final decision of a presiding officer or by a final judgment 30 of the court. 31 3. A manufacturer or manufacturer’s agent violating 32 a summary order issued under this section shall be deemed 33 in contempt of that order. The commissioner may petition 34 the district court to enforce the order as certified by 35 -4- LSB 1115YC (8) 89 ko/rn 4/ 13

H.F. _____ the commissioner. The district court shall adjudge the 1 manufacturer or manufacturer’s agent in contempt of the order 2 if the court finds after hearing that the manufacturer or 3 manufacturer’s agent is not in compliance with the order. The 4 court may assess a civil penalty against the manufacturer or 5 manufacturer’s agent of not more than one thousand dollars 6 per day for each day that the manufacturer or manufacturer’s 7 agent is in violation of the order. A civil penalty collected 8 pursuant to this section shall be deposited as provided in 9 section 505.7. The court may issue further orders as the court 10 deems appropriate. 11 Sec. 6. NEW SECTION . 510E.1 Definitions. 12 As used in this chapter unless the context otherwise 13 requires: 14 1. “Commissioner” means the commissioner of insurance. 15 2. “Covered person” means the same as defined in section 16 514J.102. 17 3. “Dispenser” means the same as defined in 21 U.S.C. 18 §360eee(3). 19 4. “Health benefit plan” means the same as defined in 20 section 514J.102. 21 5. “Health care professional” means the same as defined in 22 section 514J.102. 23 6. “Health carrier” means the same as defined in section 24 514J.102. 25 7. “Pharmaceutical drug manufacturer” or “manufacturer” means 26 any person engaged in the business of producing, preparing, 27 converting, processing, packaging, labeling, or distributing 28 a prescription drug. “Pharmaceutical drug manufacturer” or 29 “manufacturer” does not include a wholesale distributor or a 30 dispenser. 31 8. “Prescription drug” means the same as defined in 21 32 U.S.C. §360eee(12). 33 9. “Prescription drug benefit” means a health benefit plan 34 providing for third-party payment or prepayment of prescription 35 -5- LSB 1115YC (8) 89 ko/rn 5/ 13

H.F. _____ drugs. 1 10. “Specialty drug” means a prescription drug that a health 2 carrier has designated as a specialty drug and that has either 3 of the following characteristics: 4 a. The United States food and drug administration has 5 designated the prescription drug an orphan drug. 6 b. The manufacturer of the prescription drug, or the United 7 States food and drug administration, restricts distribution of 8 the prescription drug to a limited number of distributors. 9 11. “Utilization review” means the same as defined in 10 section 514F.7. 11 12. “Utilization review organization” means the same as 12 defined in section 514F.7. 13 Sec. 7. NEW SECTION . 510E.2 Health carriers —— annual 14 report. 15 1. Each health carrier shall submit an annual report 16 by February 1 to the commissioner, in the form and manner 17 prescribed by the commissioner, that contains the following 18 information for the immediately preceding calendar year, across 19 all of the health carrier’s health benefit plans that offer a 20 prescription drug benefit: 21 a. The brand name of the twenty-five prescription drugs most 22 frequently covered by the prescription drug benefits offered 23 by the health carrier. 24 b. The percent increase in annual spending by the health 25 carrier to provide all prescription drug benefits offered by 26 the health carrier. 27 c. The percent increase in premiums paid by covered persons 28 attributable to all prescription drug benefits offered by the 29 health carrier. 30 d. The percentage of specialty drugs included in all 31 prescription drug benefits offered by the health carrier that 32 are subject to utilization review conducted by a utilization 33 review organization. 34 e. The percent decrease in premiums paid by covered persons 35 -6- LSB 1115YC (8) 89 ko/rn 6/ 13

H.F. _____ attributable to specialty drugs that are subject to utilization 1 review conducted by a utilization review organization that 2 are included in all prescription drug benefits offered by the 3 health carrier. 4 2. Any information a health carrier provides to the 5 commissioner pursuant to subsection 1 that may reveal any of 6 the following shall be considered a confidential record, and be 7 recognized and protected as a trade secret pursuant to section 8 22.7, subsection 3: 9 a. The identity of a specific health benefit plan. 10 b. The identity of the specific price charged by a specific 11 manufacturer, pharmacy benefit manager, or dispenser for a 12 specific prescription drug or class of prescription drugs. 13 c. The dollar value of the rebates a specific manufacturer, 14 a specific pharmacy benefit manager, or a specific dispenser 15 provides to the health carrier. 16 3. Prior to May 1 of each calendar year, the commissioner 17 shall publish the nonconfidential data received by the 18 commissioner pursuant to this section on the same publicly 19 accessible internet site referenced in section 510D.2. The 20 data shall be aggregated from all annual reports submitted 21 pursuant to subsection 1, and the information shall be 22 made available to the public in a format that complies with 23 subsection 2. 24 Sec. 8. NEW SECTION . 510E.3 Rules. 25 The commissioner shall adopt rules pursuant to chapter 17A 26 as necessary to administer this chapter. 27 Sec. 9. NEW SECTION . 510E.4 Summary enforcement. 28 1. Upon a determination by the commissioner that a health 29 carrier or a health carrier’s agent has engaged, is engaging, 30 or is about to engage in any act or practice in violation of 31 this chapter, a rule adopted by the commissioner, or an order 32 issued by the commissioner under this chapter, the commissioner 33 may do any of the following: 34 a. Issue a summary order, including a brief statement of 35 -7- LSB 1115YC (8) 89 ko/rn 7/ 13

H.F. _____ findings of fact and conclusions of law, and direct the health 1 carrier or health carrier’s agent to cease and desist from 2 engaging in the act or practice. 3 b. Take other affirmative action that in the judgment 4 of the commissioner is necessary to ensure that the health 5 carrier or health carrier’s agent comply with this chapter, and 6 rules adopted and orders issued by the commissioner under this 7 chapter. 8 2. a. A health carrier or health carrier’s agent that has 9 been issued a summary order under this section may contest 10 the order by filing a request for a contested case proceeding 11 and hearing as provided in chapter 17A, and in accordance 12 with rules adopted by the commissioner. The health carrier 13 or health carrier’s agent shall have at least thirty calendar 14 days from the date that the summary order is issued to file the 15 request. If a hearing is not timely requested, the summary 16 order shall be final by operation of law. 17 b. Section 17A.18A shall not apply to a summary order issued 18 under this section. 19 c. A summary order issued pursuant to this section shall 20 remain effective from the date of issuance unless overturned by 21 a final decision of a presiding officer or by a final judgment 22 of the court. 23 3. A health carrier or health carrier’s agent violating 24 a summary order issued under this section shall be deemed 25 in contempt of that order. The commissioner may petition 26 the district court to enforce the order as certified by the 27 commissioner. The district court shall adjudge the health 28 carrier or health carrier’s agent in contempt of the order if 29 the court finds after hearing that the health carrier or health 30 carrier’s agent is not in compliance with the order. The court 31 may assess a civil penalty against the health carrier or health 32 carrier’s agent of not more than one thousand dollars per 33 day for each day that the health carrier or health carrier’s 34 agent is in violation of the order. A civil penalty collected 35 -8- LSB 1115YC (8) 89 ko/rn 8/ 13

H.F. _____ pursuant to this section shall be deposited as provided in 1 section 505.7. The court may issue further orders as the court 2 deems appropriate. 3 Sec. 10. NEW SECTION . 514M.1 Definitions. 4 1. “Carrier” means an entity subject to the insurance laws 5 and regulations of this state, or subject to the jurisdiction 6 of the commissioner, that offers at least one health plan in 7 this state. 8 2. “Cost-sharing requirement” means any copayment, 9 coinsurance, deductible, or other out-of-pocket expense 10 obligation required of or on behalf of an enrollee in order 11 for the enrollee to receive a specific health care service, 12 including a prescription drug, covered by the enrollee’s health 13 plan. 14 3. “Enrollee” means an individual who is eligible to obtain 15 health care services under a health plan. 16 4. “Health care services” means an item or service for the 17 prevention, treatment, cure, or healing of an illness, injury, 18 or physical disability. 19 5. “Health plan” means a policy, contract, certificate, or 20 agreement offered or issued by a carrier to provide, deliver, 21 arrange for, pay for, or reimburse any of the costs of health 22 care services. 23 6. “Interchangeable biological product” means the same as 24 defined in section 155A.3. 25 7. “Internal Revenue Code” means the Internal Revenue Code 26 as defined in section 422.3. 27 8. “Person” means a natural person, corporation, mutual 28 company, unincorporated association, partnership, joint 29 venture, limited liability corporation, trust, estate, 30 foundation, not-for-profit organization, government or 31 governmental subdivision, or government or governmental agency. 32 9. “Specialty drug” means the same as defined in section 33 510E.1. 34 Sec. 11. NEW SECTION . 514M.2 Cost-sharing calculation. 35 -9- LSB 1115YC (8) 89 ko/rn 9/ 13

H.F. _____ 1. A carrier shall include all cost-sharing amounts paid by 1 an enrollee, or need-based payments paid by another person on 2 behalf of the enrollee, as part of the carrier’s calculation 3 of an enrollee’s contribution to the enrollee’s applicable 4 cost-sharing requirement. This requirement does not apply 5 to cost-sharing amounts paid by an enrollee, or by another 6 person on behalf of an enrollee, for a specialty drug or a 7 prescription drug for which a medically appropriate A-rated 8 generic equivalent or an interchangeable biological product is 9 available to the enrollee. 10 2. Subsection 1 shall not apply to a state-regulated 11 high-deductible health plan to the extent it results in the 12 plan’s failure to qualify as a high-deductible health plan 13 pursuant to section 223 of the Internal Revenue Code. 14 3. If a provision of subsection 1 conflicts with a federal 15 law or regulation as applied to a specific carrier or to a 16 specific circumstance, the provision shall remain in full force 17 and effect for all carriers and in all circumstances in which 18 the federal conflict does not exist. 19 Sec. 12. NEW SECTION . 514M.3 Applicability. 20 This chapter applies to all health plans delivered, issued 21 for delivery, continued, or renewed in this state on or after 22 January 1, 2022. 23 Sec. 13. RETROACTIVE APPLICABILITY. 24 1. The section of this Act that requires a pharmaceutical 25 drug manufacturer to submit an annual report to the 26 commissioner containing the current wholesale acquisition cost 27 for each of the manufacturer’s prescription drugs is applicable 28 to all manufacturers that manufactured any prescription drug 29 that is sold to a person in this state on or after January 1, 30 2021. 31 2. The section of this Act that requires a pharmaceutical 32 drug manufacturer to submit a report to the commissioner 33 containing information related to an increase in the wholesale 34 acquisition cost of a prescription drug manufactured by 35 -10- LSB 1115YC (8) 89 ko/rn 10/ 13

H.F. _____ the manufacturer is applicable to all manufacturers that 1 manufactured any prescription drug that is sold to a person in 2 this state on or after January 1, 2021. 3 3. The section of this Act that requires a health carrier 4 to submit an annual report to the commissioner related to all 5 of the health carrier’s health benefit plans that offer a 6 prescription drug benefit is applicable to all health benefit 7 plans providing for third-party payment or prepayment of health 8 or medical expenses that provide a prescription drug benefit 9 that have been delivered, issued for delivery, continued, or 10 renewed in this state on or after January 1, 2021. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to price transparency and cost-sharing for 15 prescription drugs. 16 The bill requires a manufacturer to file an annual report 17 with the commissioner of insurance (commissioner) that 18 discloses the wholesale acquisition cost for all prescription 19 drugs manufactured by the manufacturer that were sold to a 20 person in this state in the immediately preceding calendar 21 year. “Wholesale acquisition cost” or “cost” is defined in the 22 bill as the manufacturer’s list price for a prescription drug 23 for wholesalers or direct purchasers in the United States, not 24 including prompt pay or other discounts, rebates, or reductions 25 in price, for the most recent month for which the information 26 is available, as reported in wholesale price guides or other 27 publications of drug or biological pricing data. Within 30 28 calendar days of receipt, the commissioner is required to 29 publish the information from the annual reports on a publicly 30 accessible internet site. 31 If a prescription drug sold to a person in this state 32 has a cost of $100 or more for a 30-day supply and the cost 33 increases 40 percent or more over the three preceding calendar 34 years, or increases 15 percent or more in the preceding 35 -11- LSB 1115YC (8) 89 ko/rn 11/ 13

H.F. _____ calendar year, the manufacturer of the prescription drug must 1 file a report with the commissioner within 30 calendar days 2 of the date on which the 40 or 15 percent increase in cost 3 occurs. This requirement is applicable to all manufacturers 4 that manufactured prescription drugs that are sold to a 5 person in this state on or after January 1, 2021. The report 6 must include the information detailed in the bill. Certain 7 information provided by a manufacturer, as detailed in the 8 bill, is considered a confidential record and is required 9 to be protected as a trade secret. Within 60 calendar days 10 of receipt, the commissioner is required to publish the 11 nonconfidential information on the same publicly accessible 12 internet site on which the manufacturer’s annual report 13 information is published. 14 The bill requires each health carrier to submit an annual 15 report by February 1 to the commissioner that contains 16 information as detailed in the bill across all of the health 17 carrier’s health benefit plans. This requirement is applicable 18 to all health benefit plans providing for third-party payment 19 or prepayment of health or medical expenses that provide a 20 prescription drug benefit that have been delivered, issued 21 for delivery, continued, or renewed in this state on or after 22 January 1, 2021. “Health carrier” is defined in the bill as an 23 entity subject to the insurance laws and regulations of this 24 state, or subject to the jurisdiction of the commissioner, 25 including an insurance company offering sickness and accident 26 plans, a health maintenance organization, a nonprofit health 27 service corporation, a plan established pursuant to Code 28 chapter 509A for public employees, or any other entity 29 providing a plan of health insurance, health care benefits, 30 or health care services. Certain information provided by 31 a health carrier, as detailed in the bill, is considered a 32 confidential record and must be protected as a trade secret. 33 Prior to May 1 of each year, the commissioner must publish the 34 nonconfidential data received by the commissioner on the same 35 -12- LSB 1115YC (8) 89 ko/rn 12/ 13

H.F. _____ publicly accessible internet site on which the manufacturers’ 1 information is published. The data must be aggregated from the 2 annual reports submitted by all health carriers. 3 The bill directs the commissioner to adopt rules as 4 necessary to administer the requirements outlined in the 5 bill. The bill details the commissioner’s authority, and 6 the process to enforce that authority, for manufacturers’, 7 manufacturers’ agents’, health carriers’ or health carriers’ 8 agents’ violations of a provision of the bill, a rule adopted 9 by the commissioner, or of an order issued by the commissioner. 10 The bill also requires a carrier to include all cost-sharing 11 amounts paid by an enrollee of a health plan, or by another 12 person on behalf of an enrollee, as part of the carrier’s 13 calculation of an enrollee’s contribution to the enrollee’s 14 applicable cost-sharing requirement. This does not 15 apply to cost-sharing incurred for a specialty drug or a 16 prescription drug for which an A-rated generic equivalent or an 17 interchangeable biological product is available. “Cost-sharing 18 requirement” is defined in the bill as any copayment, 19 coinsurance, deductible, or other out-of-pocket expense 20 obligation required of or on behalf of an enrollee in order 21 for the enrollee to receive a specific health care service, 22 including a prescription drug, covered by the enrollee’s health 23 plan. This requirement applies to all health plans delivered, 24 issued for delivery, continued, or renewed in this state on 25 or after January 1, 2022. The bill excludes state-regulated 26 high-deductible health plans (HDHP) from the requirement if 27 it will result in the plan not qualifying as an HDHP under 28 section 223 of the Internal Revenue Code. The bill also 29 prohibits application of the requirement to a carrier or to a 30 circumstance in a manner that will conflict with a federal law 31 or a federal regulation. 32 -13- LSB 1115YC (8) 89 ko/rn 13/ 13