Print
House Study Bill 46 - IntroducedA Bill ForAn Act 1relating to price transparency and cost-sharing for
2prescription drugs, and including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 510D.1 Definitions.
2As used in this chapter, unless the context otherwise
3requires:
41. “Commissioner” means the commissioner of insurance.
52. “Dispenser” means the same as defined in 21 U.S.C.
6§360eee(3).
73. “Established name” means the same as defined in 21 C.F.R.
8299.4.
94. “Health benefit plan” means the same as defined in
10514J.102.
115. “Pharmaceutical drug manufacturer” or “manufacturer” means
12any person engaged in the business of producing, preparing,
13converting, processing, packaging, labeling, or distributing
14a prescription drug. “Pharmaceutical drug manufacturer” or
15“manufacturer” does not include a wholesale distributor or a
16dispenser.
176. “Prescription drug” means the same as defined in 21
18U.S.C. §360eee(12).
197. “Wholesale acquisition cost” or “cost” means a
20manufacturer’s list price for a prescription drug for
21wholesalers or direct purchasers in the United States, not
22including prompt pay or other discounts, rebates, or reductions
23in price, for the most recent month for which the information
24is available, as reported in wholesale price guides or other
25publications of drug or biological pricing data.
268. “Wholesale distributor” means the same as defined in 21
27U.S.C. §360eee(29).
28 Sec. 2. NEW SECTION. 510D.2 Pharmaceutical drug
29manufacturers — annual report.
30Each manufacturer shall provide an annual report by
31February 15 to the commissioner, in a format prescribed
32by the commissioner, that contains the current wholesale
33acquisition cost for each prescription drug manufactured by the
34manufacturer that was sold to a person in this state in the
35immediately preceding calendar year. Within thirty calendar
-1-1days of receipt, the commissioner shall publish the information
2received by the commissioner on a publicly accessible internet
3site.
4 Sec. 3. NEW SECTION. 510D.3 Wholesale acquisition cost
5increase — report.
61. If a prescription drug sold to a person in this state
7has a wholesale acquisition cost of one hundred dollars or more
8for a thirty-day supply and the cost increases forty percent
9or more over the three preceding consecutive calendar years,
10or increases fifteen percent or more in the preceding calendar
11year, the manufacturer of the prescription drug shall file a
12report with the commissioner within thirty calendar days of the
13date on which the forty percent or the fifteen percent increase
14in the cost occurs. The report shall be in the form and manner
15prescribed by the commissioner and shall include all of the
16following information:
17a. The established name of the prescription drug.
18b. All brand names, generic names, proprietary names, and
19nonproprietary names for the prescription drug, as applicable.
20c. The aggregate manufacturer-level research and development
21costs related to the prescription drug for the most recent
22calendar year for which third-party independent audit data for
23manufacturer-level research and development costs is available.
24d. All established names, brand names, generic names,
25proprietary names, and nonproprietary names for each
26prescription drug manufactured by the manufacturer that
27received approval from the United States food and drug
28administration in the immediately preceding three consecutive
29calendar years.
30e. All established names, brand names, generic names,
31proprietary names, and nonproprietary names for each
32prescription drug manufactured by the manufacturer for which
33a patent or exclusivity expired in the immediately preceding
34three consecutive calendar years.
35f. A statement detailing the factor or factors that played
-2-1any role in the increase in cost of the prescription drug
2and an explanation for the factor or factors’ impact on the
3increase in cost of the prescription drug.
4g. The aggregate manufacturer-level direct and
5administrative costs related to marketing and advertising of
6the prescription drug for the immediately preceding calendar
7year.
82. All information and data a manufacturer submits to the
9commissioner must be consistent in detail and quality with the
10information and data submitted in the manufacturer’s annual
11report filed with the United States securities and exchange
12commission on form 10-k.
133. a. Information provided by a pharmaceutical drug
14manufacturer to the commissioner pursuant to this section
15that may reveal any of the following as related to a specific
16prescription drug or class of prescription drugs shall
17be considered a confidential record, and be recognized
18and protected as a trade secret pursuant to section 22.7,
19subsection 3:
20(1) The amount the manufacturer charges a specific health
21carrier, specific pharmacy benefit manager, or a specific
22dispenser.
23(2) The dollar value of the rebates the manufacturer
24provides a specific health carrier, specific pharmacy benefit
25manager, or a specific dispenser.
26(3) The identity of a specific health carrier, specific
27pharmacy benefit manager, or a specific dispenser.
28b. Within sixty calendar days of receipt of the information
29pursuant to this section, the commissioner shall publish all
30nonconfidential information received by the commissioner on the
31same publicly accessible internet site referenced in section
32510D.2.
33 Sec. 4. NEW SECTION. 510D.4 Rules.
34The commissioner shall adopt rules pursuant to chapter 17A
35as necessary to administer this chapter.
-3-1 Sec. 5. NEW SECTION. 510D.5 Summary enforcement.
21. Upon a determination by the commissioner that a
3manufacturer or manufacturer’s agent has engaged, is engaging,
4or is about to engage in any act or practice in violation of
5this chapter, a rule adopted by the commissioner, or an order
6issued by the commissioner under this chapter, the commissioner
7may do any of the following:
8a. Issue a summary order, including a brief statement
9of findings of fact and conclusions of law, and direct the
10manufacturer or manufacturer’s agent to cease and desist from
11engaging in the act or practice.
12b. Take other affirmative action that in the judgment of
13the commissioner is necessary to ensure that the manufacturer
14or manufacturer’s agent comply with this chapter, and rules
15adopted and orders issued by the commissioner under this
16chapter.
172. a. A manufacturer or manufacturer’s agent that has
18been issued a summary order under this section may contest
19the order by filing a request for a contested case proceeding
20and hearing as provided in chapter 17A, and in accordance
21with rules adopted by the commissioner. The manufacturer or
22manufacturer’s agent shall have at least thirty calendar days
23from the date that the summary order is issued to file the
24request. If a hearing is not timely requested, the summary
25order shall be final by operation of law.
26b. Section 17A.18A shall not apply to a summary order issued
27under this section.
28c. A summary order issued pursuant to this section shall
29remain effective from the date of issuance unless overturned by
30a final decision of a presiding officer or by a final judgment
31of the court.
323. A manufacturer or manufacturer’s agent violating
33a summary order issued under this section shall be deemed
34in contempt of that order. The commissioner may petition
35the district court to enforce the order as certified by
-4-1the commissioner. The district court shall adjudge the
2manufacturer or manufacturer’s agent in contempt of the order
3if the court finds after hearing that the manufacturer or
4manufacturer’s agent is not in compliance with the order. The
5court may assess a civil penalty against the manufacturer or
6manufacturer’s agent of not more than one thousand dollars
7per day for each day that the manufacturer or manufacturer’s
8agent is in violation of the order. A civil penalty collected
9pursuant to this section shall be deposited as provided in
10section 505.7. The court may issue further orders as the court
11deems appropriate.
12 Sec. 6. NEW SECTION. 510E.1 Definitions.
13As used in this chapter unless the context otherwise
14requires:
151. “Commissioner” means the commissioner of insurance.
162. “Covered person” means the same as defined in section
17514J.102.
183. “Dispenser” means the same as defined in 21 U.S.C.
19§360eee(3).
204. “Health benefit plan” means the same as defined in
21section 514J.102.
225. “Health care professional” means the same as defined in
23section 514J.102.
246. “Health carrier” means the same as defined in section
25514J.102.
267. “Pharmaceutical drug manufacturer” or “manufacturer” means
27any person engaged in the business of producing, preparing,
28converting, processing, packaging, labeling, or distributing
29a prescription drug. “Pharmaceutical drug manufacturer” or
30“manufacturer” does not include a wholesale distributor or a
31dispenser.
328. “Prescription drug” means the same as defined in 21
33U.S.C. §360eee(12).
349. “Prescription drug benefit” means a health benefit plan
35providing for third-party payment or prepayment of prescription
-5-1drugs.
210. “Specialty drug” means a prescription drug that a health
3carrier has designated as a specialty drug and that has either
4of the following characteristics:
5a. The United States food and drug administration has
6designated the prescription drug an orphan drug.
7b. The manufacturer of the prescription drug, or the United
8States food and drug administration, restricts distribution of
9the prescription drug to a limited number of distributors.
1011. “Utilization review” means the same as defined in
11section 514F.7.
1212. “Utilization review organization” means the same as
13defined in section 514F.7.
14 Sec. 7. NEW SECTION. 510E.2 Health carriers — annual
15report.
161. Each health carrier shall submit an annual report
17by February 1 to the commissioner, in the form and manner
18prescribed by the commissioner, that contains the following
19information for the immediately preceding calendar year, across
20all of the health carrier’s health benefit plans that offer a
21prescription drug benefit:
22a. The brand name of the twenty-five prescription drugs most
23frequently covered by the prescription drug benefits offered
24by the health carrier.
25b. The percent increase in annual spending by the health
26carrier to provide all prescription drug benefits offered by
27the health carrier.
28c. The percent increase in premiums paid by covered persons
29attributable to all prescription drug benefits offered by the
30health carrier.
31d. The percentage of specialty drugs included in all
32prescription drug benefits offered by the health carrier that
33are subject to utilization review conducted by a utilization
34review organization.
35e. The percent decrease in premiums paid by covered persons
-6-1attributable to specialty drugs that are subject to utilization
2review conducted by a utilization review organization that
3are included in all prescription drug benefits offered by the
4health carrier.
52. Any information a health carrier provides to the
6commissioner pursuant to subsection 1 that may reveal any of
7the following shall be considered a confidential record, and be
8recognized and protected as a trade secret pursuant to section
922.7, subsection 3:
10a. The identity of a specific health benefit plan.
11b. The identity of the specific price charged by a specific
12manufacturer, pharmacy benefit manager, or dispenser for a
13specific prescription drug or class of prescription drugs.
14c. The dollar value of the rebates a specific manufacturer,
15a specific pharmacy benefit manager, or a specific dispenser
16provides to the health carrier.
173. Prior to May 1 of each calendar year, the commissioner
18shall publish the nonconfidential data received by the
19commissioner pursuant to this section on the same publicly
20accessible internet site referenced in section 510D.2. The
21data shall be aggregated from all annual reports submitted
22pursuant to subsection 1, and the information shall be
23made available to the public in a format that complies with
24subsection 2.
25 Sec. 8. NEW SECTION. 510E.3 Rules.
26The commissioner shall adopt rules pursuant to chapter 17A
27as necessary to administer this chapter.
28 Sec. 9. NEW SECTION. 510E.4 Summary enforcement.
291. Upon a determination by the commissioner that a health
30carrier or a health carrier’s agent has engaged, is engaging,
31or is about to engage in any act or practice in violation of
32this chapter, a rule adopted by the commissioner, or an order
33issued by the commissioner under this chapter, the commissioner
34may do any of the following:
35a. Issue a summary order, including a brief statement of
-7-1findings of fact and conclusions of law, and direct the health
2carrier or health carrier’s agent to cease and desist from
3engaging in the act or practice.
4b. Take other affirmative action that in the judgment
5of the commissioner is necessary to ensure that the health
6carrier or health carrier’s agent comply with this chapter, and
7rules adopted and orders issued by the commissioner under this
8chapter.
92. a. A health carrier or health carrier’s agent that has
10been issued a summary order under this section may contest
11the order by filing a request for a contested case proceeding
12and hearing as provided in chapter 17A, and in accordance
13with rules adopted by the commissioner. The health carrier
14or health carrier’s agent shall have at least thirty calendar
15days from the date that the summary order is issued to file the
16request. If a hearing is not timely requested, the summary
17order shall be final by operation of law.
18b. Section 17A.18A shall not apply to a summary order issued
19under this section.
20c. A summary order issued pursuant to this section shall
21remain effective from the date of issuance unless overturned by
22a final decision of a presiding officer or by a final judgment
23of the court.
243. A health carrier or health carrier’s agent violating
25a summary order issued under this section shall be deemed
26in contempt of that order. The commissioner may petition
27the district court to enforce the order as certified by the
28commissioner. The district court shall adjudge the health
29carrier or health carrier’s agent in contempt of the order if
30the court finds after hearing that the health carrier or health
31carrier’s agent is not in compliance with the order. The court
32may assess a civil penalty against the health carrier or health
33carrier’s agent of not more than one thousand dollars per
34day for each day that the health carrier or health carrier’s
35agent is in violation of the order. A civil penalty collected
-8-1pursuant to this section shall be deposited as provided in
2section 505.7. The court may issue further orders as the court
3deems appropriate.
4 Sec. 10. NEW SECTION. 514M.1 Definitions.
51. “Carrier” means an entity subject to the insurance laws
6and regulations of this state, or subject to the jurisdiction
7of the commissioner, that offers at least one health plan in
8this state.
92. “Cost-sharing requirement” means any copayment,
10coinsurance, deductible, or other out-of-pocket expense
11obligation required of or on behalf of an enrollee in order
12for the enrollee to receive a specific health care service,
13including a prescription drug, covered by the enrollee’s health
14plan.
153. “Enrollee” means an individual who is eligible to obtain
16health care services under a health plan.
174. “Health care services” means an item or service for the
18prevention, treatment, cure, or healing of an illness, injury,
19or physical disability.
205. “Health plan” means a policy, contract, certificate, or
21agreement offered or issued by a carrier to provide, deliver,
22arrange for, pay for, or reimburse any of the costs of health
23care services.
246. “Interchangeable biological product” means the same as
25defined in section 155A.3.
267. “Internal Revenue Code” means the Internal Revenue Code
27as defined in section 422.3.
288. “Person” means a natural person, corporation, mutual
29company, unincorporated association, partnership, joint
30venture, limited liability corporation, trust, estate,
31foundation, not-for-profit organization, government or
32governmental subdivision, or government or governmental agency.
339. “Specialty drug” means the same as defined in section
34510E.1.
35 Sec. 11. NEW SECTION. 514M.2 Cost-sharing calculation.
-9- 11. A carrier shall include all cost-sharing amounts paid by
2an enrollee, or need-based payments paid by another person on
3behalf of the enrollee, as part of the carrier’s calculation
4of an enrollee’s contribution to the enrollee’s applicable
5cost-sharing requirement. This requirement does not apply
6to cost-sharing amounts paid by an enrollee, or by another
7person on behalf of an enrollee, for a specialty drug or a
8prescription drug for which a medically appropriate A-rated
9generic equivalent or an interchangeable biological product is
10available to the enrollee.
112. Subsection 1 shall not apply to a state-regulated
12high-deductible health plan to the extent it results in the
13plan’s failure to qualify as a high-deductible health plan
14pursuant to section 223 of the Internal Revenue Code.
153. If a provision of subsection 1 conflicts with a federal
16law or regulation as applied to a specific carrier or to a
17specific circumstance, the provision shall remain in full force
18and effect for all carriers and in all circumstances in which
19the federal conflict does not exist.
20 Sec. 12. NEW SECTION. 514M.3 Applicability.
21This chapter applies to all health plans delivered, issued
22for delivery, continued, or renewed in this state on or after
23January 1, 2022.
24 Sec. 13. RETROACTIVE APPLICABILITY.
251. The section of this Act that requires a pharmaceutical
26drug manufacturer to submit an annual report to the
27commissioner containing the current wholesale acquisition cost
28for each of the manufacturer’s prescription drugs is applicable
29to all manufacturers that manufactured any prescription drug
30that is sold to a person in this state on or after January 1,
312021.
322. The section of this Act that requires a pharmaceutical
33drug manufacturer to submit a report to the commissioner
34containing information related to an increase in the wholesale
35acquisition cost of a prescription drug manufactured by
-10-1the manufacturer is applicable to all manufacturers that
2manufactured any prescription drug that is sold to a person in
3this state on or after January 1, 2021.
43. The section of this Act that requires a health carrier
5to submit an annual report to the commissioner related to all
6of the health carrier’s health benefit plans that offer a
7prescription drug benefit is applicable to all health benefit
8plans providing for third-party payment or prepayment of health
9or medical expenses that provide a prescription drug benefit
10that have been delivered, issued for delivery, continued, or
11renewed in this state on or after January 1, 2021.
12EXPLANATION
13The inclusion of this explanation does not constitute agreement with
14the explanation’s substance by the members of the general assembly.
15This bill relates to price transparency and cost-sharing for
16prescription drugs.
17The bill requires a manufacturer to file an annual report
18with the commissioner of insurance (commissioner) that
19discloses the wholesale acquisition cost for all prescription
20drugs manufactured by the manufacturer that were sold to a
21person in this state in the immediately preceding calendar
22year. “Wholesale acquisition cost” or “cost” is defined in the
23bill as the manufacturer’s list price for a prescription drug
24for wholesalers or direct purchasers in the United States, not
25including prompt pay or other discounts, rebates, or reductions
26in price, for the most recent month for which the information
27is available, as reported in wholesale price guides or other
28publications of drug or biological pricing data. Within 30
29calendar days of receipt, the commissioner is required to
30publish the information from the annual reports on a publicly
31accessible internet site.
32If a prescription drug sold to a person in this state
33has a cost of $100 or more for a 30-day supply and the cost
34increases 40 percent or more over the three preceding calendar
35years, or increases 15 percent or more in the preceding
-11-1calendar year, the manufacturer of the prescription drug must
2file a report with the commissioner within 30 calendar days
3of the date on which the 40 or 15 percent increase in cost
4occurs. This requirement is applicable to all manufacturers
5that manufactured prescription drugs that are sold to a
6person in this state on or after January 1, 2021. The report
7must include the information detailed in the bill. Certain
8information provided by a manufacturer, as detailed in the
9bill, is considered a confidential record and is required
10to be protected as a trade secret. Within 60 calendar days
11of receipt, the commissioner is required to publish the
12nonconfidential information on the same publicly accessible
13internet site on which the manufacturer’s annual report
14information is published.
15The bill requires each health carrier to submit an annual
16report by February 1 to the commissioner that contains
17information as detailed in the bill across all of the health
18carrier’s health benefit plans. This requirement is applicable
19to all health benefit plans providing for third-party payment
20or prepayment of health or medical expenses that provide a
21prescription drug benefit that have been delivered, issued
22for delivery, continued, or renewed in this state on or after
23January 1, 2021. “Health carrier” is defined in the bill as an
24entity subject to the insurance laws and regulations of this
25state, or subject to the jurisdiction of the commissioner,
26including an insurance company offering sickness and accident
27plans, a health maintenance organization, a nonprofit health
28service corporation, a plan established pursuant to Code
29chapter 509A for public employees, or any other entity
30providing a plan of health insurance, health care benefits,
31or health care services. Certain information provided by
32a health carrier, as detailed in the bill, is considered a
33confidential record and must be protected as a trade secret.
34Prior to May 1 of each year, the commissioner must publish the
35nonconfidential data received by the commissioner on the same
-12-1publicly accessible internet site on which the manufacturers’
2information is published. The data must be aggregated from the
3annual reports submitted by all health carriers.
4The bill directs the commissioner to adopt rules as
5necessary to administer the requirements outlined in the
6bill. The bill details the commissioner’s authority, and
7the process to enforce that authority, for manufacturers’,
8manufacturers’ agents’, health carriers’ or health carriers’
9agents’ violations of a provision of the bill, a rule adopted
10by the commissioner, or of an order issued by the commissioner.
11The bill also requires a carrier to include all cost-sharing
12amounts paid by an enrollee of a health plan, or by another
13person on behalf of an enrollee, as part of the carrier’s
14calculation of an enrollee’s contribution to the enrollee’s
15applicable cost-sharing requirement. This does not
16apply to cost-sharing incurred for a specialty drug or a
17prescription drug for which an A-rated generic equivalent or an
18interchangeable biological product is available. “Cost-sharing
19requirement” is defined in the bill as any copayment,
20coinsurance, deductible, or other out-of-pocket expense
21obligation required of or on behalf of an enrollee in order
22for the enrollee to receive a specific health care service,
23including a prescription drug, covered by the enrollee’s health
24plan. This requirement applies to all health plans delivered,
25issued for delivery, continued, or renewed in this state on
26or after January 1, 2022. The bill excludes state-regulated
27high-deductible health plans (HDHP) from the requirement if
28it will result in the plan not qualifying as an HDHP under
29section 223 of the Internal Revenue Code. The bill also
30prohibits application of the requirement to a carrier or to a
31circumstance in a manner that will conflict with a federal law
32or a federal regulation.
-13-ko/rn
2prescription drugs, and including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 510D.1 Definitions.
2As used in this chapter, unless the context otherwise
3requires:
41. “Commissioner” means the commissioner of insurance.
52. “Dispenser” means the same as defined in 21 U.S.C.
6§360eee(3).
73. “Established name” means the same as defined in 21 C.F.R.
8299.4.
94. “Health benefit plan” means the same as defined in
10514J.102.
115. “Pharmaceutical drug manufacturer” or “manufacturer” means
12any person engaged in the business of producing, preparing,
13converting, processing, packaging, labeling, or distributing
14a prescription drug. “Pharmaceutical drug manufacturer” or
15“manufacturer” does not include a wholesale distributor or a
16dispenser.
176. “Prescription drug” means the same as defined in 21
18U.S.C. §360eee(12).
197. “Wholesale acquisition cost” or “cost” means a
20manufacturer’s list price for a prescription drug for
21wholesalers or direct purchasers in the United States, not
22including prompt pay or other discounts, rebates, or reductions
23in price, for the most recent month for which the information
24is available, as reported in wholesale price guides or other
25publications of drug or biological pricing data.
268. “Wholesale distributor” means the same as defined in 21
27U.S.C. §360eee(29).
28 Sec. 2. NEW SECTION. 510D.2 Pharmaceutical drug
29manufacturers — annual report.
30Each manufacturer shall provide an annual report by
31February 15 to the commissioner, in a format prescribed
32by the commissioner, that contains the current wholesale
33acquisition cost for each prescription drug manufactured by the
34manufacturer that was sold to a person in this state in the
35immediately preceding calendar year. Within thirty calendar
-1-1days of receipt, the commissioner shall publish the information
2received by the commissioner on a publicly accessible internet
3site.
4 Sec. 3. NEW SECTION. 510D.3 Wholesale acquisition cost
5increase — report.
61. If a prescription drug sold to a person in this state
7has a wholesale acquisition cost of one hundred dollars or more
8for a thirty-day supply and the cost increases forty percent
9or more over the three preceding consecutive calendar years,
10or increases fifteen percent or more in the preceding calendar
11year, the manufacturer of the prescription drug shall file a
12report with the commissioner within thirty calendar days of the
13date on which the forty percent or the fifteen percent increase
14in the cost occurs. The report shall be in the form and manner
15prescribed by the commissioner and shall include all of the
16following information:
17a. The established name of the prescription drug.
18b. All brand names, generic names, proprietary names, and
19nonproprietary names for the prescription drug, as applicable.
20c. The aggregate manufacturer-level research and development
21costs related to the prescription drug for the most recent
22calendar year for which third-party independent audit data for
23manufacturer-level research and development costs is available.
24d. All established names, brand names, generic names,
25proprietary names, and nonproprietary names for each
26prescription drug manufactured by the manufacturer that
27received approval from the United States food and drug
28administration in the immediately preceding three consecutive
29calendar years.
30e. All established names, brand names, generic names,
31proprietary names, and nonproprietary names for each
32prescription drug manufactured by the manufacturer for which
33a patent or exclusivity expired in the immediately preceding
34three consecutive calendar years.
35f. A statement detailing the factor or factors that played
-2-1any role in the increase in cost of the prescription drug
2and an explanation for the factor or factors’ impact on the
3increase in cost of the prescription drug.
4g. The aggregate manufacturer-level direct and
5administrative costs related to marketing and advertising of
6the prescription drug for the immediately preceding calendar
7year.
82. All information and data a manufacturer submits to the
9commissioner must be consistent in detail and quality with the
10information and data submitted in the manufacturer’s annual
11report filed with the United States securities and exchange
12commission on form 10-k.
133. a. Information provided by a pharmaceutical drug
14manufacturer to the commissioner pursuant to this section
15that may reveal any of the following as related to a specific
16prescription drug or class of prescription drugs shall
17be considered a confidential record, and be recognized
18and protected as a trade secret pursuant to section 22.7,
19subsection 3:
20(1) The amount the manufacturer charges a specific health
21carrier, specific pharmacy benefit manager, or a specific
22dispenser.
23(2) The dollar value of the rebates the manufacturer
24provides a specific health carrier, specific pharmacy benefit
25manager, or a specific dispenser.
26(3) The identity of a specific health carrier, specific
27pharmacy benefit manager, or a specific dispenser.
28b. Within sixty calendar days of receipt of the information
29pursuant to this section, the commissioner shall publish all
30nonconfidential information received by the commissioner on the
31same publicly accessible internet site referenced in section
32510D.2.
33 Sec. 4. NEW SECTION. 510D.4 Rules.
34The commissioner shall adopt rules pursuant to chapter 17A
35as necessary to administer this chapter.
-3-1 Sec. 5. NEW SECTION. 510D.5 Summary enforcement.
21. Upon a determination by the commissioner that a
3manufacturer or manufacturer’s agent has engaged, is engaging,
4or is about to engage in any act or practice in violation of
5this chapter, a rule adopted by the commissioner, or an order
6issued by the commissioner under this chapter, the commissioner
7may do any of the following:
8a. Issue a summary order, including a brief statement
9of findings of fact and conclusions of law, and direct the
10manufacturer or manufacturer’s agent to cease and desist from
11engaging in the act or practice.
12b. Take other affirmative action that in the judgment of
13the commissioner is necessary to ensure that the manufacturer
14or manufacturer’s agent comply with this chapter, and rules
15adopted and orders issued by the commissioner under this
16chapter.
172. a. A manufacturer or manufacturer’s agent that has
18been issued a summary order under this section may contest
19the order by filing a request for a contested case proceeding
20and hearing as provided in chapter 17A, and in accordance
21with rules adopted by the commissioner. The manufacturer or
22manufacturer’s agent shall have at least thirty calendar days
23from the date that the summary order is issued to file the
24request. If a hearing is not timely requested, the summary
25order shall be final by operation of law.
26b. Section 17A.18A shall not apply to a summary order issued
27under this section.
28c. A summary order issued pursuant to this section shall
29remain effective from the date of issuance unless overturned by
30a final decision of a presiding officer or by a final judgment
31of the court.
323. A manufacturer or manufacturer’s agent violating
33a summary order issued under this section shall be deemed
34in contempt of that order. The commissioner may petition
35the district court to enforce the order as certified by
-4-1the commissioner. The district court shall adjudge the
2manufacturer or manufacturer’s agent in contempt of the order
3if the court finds after hearing that the manufacturer or
4manufacturer’s agent is not in compliance with the order. The
5court may assess a civil penalty against the manufacturer or
6manufacturer’s agent of not more than one thousand dollars
7per day for each day that the manufacturer or manufacturer’s
8agent is in violation of the order. A civil penalty collected
9pursuant to this section shall be deposited as provided in
10section 505.7. The court may issue further orders as the court
11deems appropriate.
12 Sec. 6. NEW SECTION. 510E.1 Definitions.
13As used in this chapter unless the context otherwise
14requires:
151. “Commissioner” means the commissioner of insurance.
162. “Covered person” means the same as defined in section
17514J.102.
183. “Dispenser” means the same as defined in 21 U.S.C.
19§360eee(3).
204. “Health benefit plan” means the same as defined in
21section 514J.102.
225. “Health care professional” means the same as defined in
23section 514J.102.
246. “Health carrier” means the same as defined in section
25514J.102.
267. “Pharmaceutical drug manufacturer” or “manufacturer” means
27any person engaged in the business of producing, preparing,
28converting, processing, packaging, labeling, or distributing
29a prescription drug. “Pharmaceutical drug manufacturer” or
30“manufacturer” does not include a wholesale distributor or a
31dispenser.
328. “Prescription drug” means the same as defined in 21
33U.S.C. §360eee(12).
349. “Prescription drug benefit” means a health benefit plan
35providing for third-party payment or prepayment of prescription
-5-1drugs.
210. “Specialty drug” means a prescription drug that a health
3carrier has designated as a specialty drug and that has either
4of the following characteristics:
5a. The United States food and drug administration has
6designated the prescription drug an orphan drug.
7b. The manufacturer of the prescription drug, or the United
8States food and drug administration, restricts distribution of
9the prescription drug to a limited number of distributors.
1011. “Utilization review” means the same as defined in
11section 514F.7.
1212. “Utilization review organization” means the same as
13defined in section 514F.7.
14 Sec. 7. NEW SECTION. 510E.2 Health carriers — annual
15report.
161. Each health carrier shall submit an annual report
17by February 1 to the commissioner, in the form and manner
18prescribed by the commissioner, that contains the following
19information for the immediately preceding calendar year, across
20all of the health carrier’s health benefit plans that offer a
21prescription drug benefit:
22a. The brand name of the twenty-five prescription drugs most
23frequently covered by the prescription drug benefits offered
24by the health carrier.
25b. The percent increase in annual spending by the health
26carrier to provide all prescription drug benefits offered by
27the health carrier.
28c. The percent increase in premiums paid by covered persons
29attributable to all prescription drug benefits offered by the
30health carrier.
31d. The percentage of specialty drugs included in all
32prescription drug benefits offered by the health carrier that
33are subject to utilization review conducted by a utilization
34review organization.
35e. The percent decrease in premiums paid by covered persons
-6-1attributable to specialty drugs that are subject to utilization
2review conducted by a utilization review organization that
3are included in all prescription drug benefits offered by the
4health carrier.
52. Any information a health carrier provides to the
6commissioner pursuant to subsection 1 that may reveal any of
7the following shall be considered a confidential record, and be
8recognized and protected as a trade secret pursuant to section
922.7, subsection 3:
10a. The identity of a specific health benefit plan.
11b. The identity of the specific price charged by a specific
12manufacturer, pharmacy benefit manager, or dispenser for a
13specific prescription drug or class of prescription drugs.
14c. The dollar value of the rebates a specific manufacturer,
15a specific pharmacy benefit manager, or a specific dispenser
16provides to the health carrier.
173. Prior to May 1 of each calendar year, the commissioner
18shall publish the nonconfidential data received by the
19commissioner pursuant to this section on the same publicly
20accessible internet site referenced in section 510D.2. The
21data shall be aggregated from all annual reports submitted
22pursuant to subsection 1, and the information shall be
23made available to the public in a format that complies with
24subsection 2.
25 Sec. 8. NEW SECTION. 510E.3 Rules.
26The commissioner shall adopt rules pursuant to chapter 17A
27as necessary to administer this chapter.
28 Sec. 9. NEW SECTION. 510E.4 Summary enforcement.
291. Upon a determination by the commissioner that a health
30carrier or a health carrier’s agent has engaged, is engaging,
31or is about to engage in any act or practice in violation of
32this chapter, a rule adopted by the commissioner, or an order
33issued by the commissioner under this chapter, the commissioner
34may do any of the following:
35a. Issue a summary order, including a brief statement of
-7-1findings of fact and conclusions of law, and direct the health
2carrier or health carrier’s agent to cease and desist from
3engaging in the act or practice.
4b. Take other affirmative action that in the judgment
5of the commissioner is necessary to ensure that the health
6carrier or health carrier’s agent comply with this chapter, and
7rules adopted and orders issued by the commissioner under this
8chapter.
92. a. A health carrier or health carrier’s agent that has
10been issued a summary order under this section may contest
11the order by filing a request for a contested case proceeding
12and hearing as provided in chapter 17A, and in accordance
13with rules adopted by the commissioner. The health carrier
14or health carrier’s agent shall have at least thirty calendar
15days from the date that the summary order is issued to file the
16request. If a hearing is not timely requested, the summary
17order shall be final by operation of law.
18b. Section 17A.18A shall not apply to a summary order issued
19under this section.
20c. A summary order issued pursuant to this section shall
21remain effective from the date of issuance unless overturned by
22a final decision of a presiding officer or by a final judgment
23of the court.
243. A health carrier or health carrier’s agent violating
25a summary order issued under this section shall be deemed
26in contempt of that order. The commissioner may petition
27the district court to enforce the order as certified by the
28commissioner. The district court shall adjudge the health
29carrier or health carrier’s agent in contempt of the order if
30the court finds after hearing that the health carrier or health
31carrier’s agent is not in compliance with the order. The court
32may assess a civil penalty against the health carrier or health
33carrier’s agent of not more than one thousand dollars per
34day for each day that the health carrier or health carrier’s
35agent is in violation of the order. A civil penalty collected
-8-1pursuant to this section shall be deposited as provided in
2section 505.7. The court may issue further orders as the court
3deems appropriate.
4 Sec. 10. NEW SECTION. 514M.1 Definitions.
51. “Carrier” means an entity subject to the insurance laws
6and regulations of this state, or subject to the jurisdiction
7of the commissioner, that offers at least one health plan in
8this state.
92. “Cost-sharing requirement” means any copayment,
10coinsurance, deductible, or other out-of-pocket expense
11obligation required of or on behalf of an enrollee in order
12for the enrollee to receive a specific health care service,
13including a prescription drug, covered by the enrollee’s health
14plan.
153. “Enrollee” means an individual who is eligible to obtain
16health care services under a health plan.
174. “Health care services” means an item or service for the
18prevention, treatment, cure, or healing of an illness, injury,
19or physical disability.
205. “Health plan” means a policy, contract, certificate, or
21agreement offered or issued by a carrier to provide, deliver,
22arrange for, pay for, or reimburse any of the costs of health
23care services.
246. “Interchangeable biological product” means the same as
25defined in section 155A.3.
267. “Internal Revenue Code” means the Internal Revenue Code
27as defined in section 422.3.
288. “Person” means a natural person, corporation, mutual
29company, unincorporated association, partnership, joint
30venture, limited liability corporation, trust, estate,
31foundation, not-for-profit organization, government or
32governmental subdivision, or government or governmental agency.
339. “Specialty drug” means the same as defined in section
34510E.1.
35 Sec. 11. NEW SECTION. 514M.2 Cost-sharing calculation.
-9- 11. A carrier shall include all cost-sharing amounts paid by
2an enrollee, or need-based payments paid by another person on
3behalf of the enrollee, as part of the carrier’s calculation
4of an enrollee’s contribution to the enrollee’s applicable
5cost-sharing requirement. This requirement does not apply
6to cost-sharing amounts paid by an enrollee, or by another
7person on behalf of an enrollee, for a specialty drug or a
8prescription drug for which a medically appropriate A-rated
9generic equivalent or an interchangeable biological product is
10available to the enrollee.
112. Subsection 1 shall not apply to a state-regulated
12high-deductible health plan to the extent it results in the
13plan’s failure to qualify as a high-deductible health plan
14pursuant to section 223 of the Internal Revenue Code.
153. If a provision of subsection 1 conflicts with a federal
16law or regulation as applied to a specific carrier or to a
17specific circumstance, the provision shall remain in full force
18and effect for all carriers and in all circumstances in which
19the federal conflict does not exist.
20 Sec. 12. NEW SECTION. 514M.3 Applicability.
21This chapter applies to all health plans delivered, issued
22for delivery, continued, or renewed in this state on or after
23January 1, 2022.
24 Sec. 13. RETROACTIVE APPLICABILITY.
251. The section of this Act that requires a pharmaceutical
26drug manufacturer to submit an annual report to the
27commissioner containing the current wholesale acquisition cost
28for each of the manufacturer’s prescription drugs is applicable
29to all manufacturers that manufactured any prescription drug
30that is sold to a person in this state on or after January 1,
312021.
322. The section of this Act that requires a pharmaceutical
33drug manufacturer to submit a report to the commissioner
34containing information related to an increase in the wholesale
35acquisition cost of a prescription drug manufactured by
-10-1the manufacturer is applicable to all manufacturers that
2manufactured any prescription drug that is sold to a person in
3this state on or after January 1, 2021.
43. The section of this Act that requires a health carrier
5to submit an annual report to the commissioner related to all
6of the health carrier’s health benefit plans that offer a
7prescription drug benefit is applicable to all health benefit
8plans providing for third-party payment or prepayment of health
9or medical expenses that provide a prescription drug benefit
10that have been delivered, issued for delivery, continued, or
11renewed in this state on or after January 1, 2021.
12EXPLANATION
13The inclusion of this explanation does not constitute agreement with
14the explanation’s substance by the members of the general assembly.
15This bill relates to price transparency and cost-sharing for
16prescription drugs.
17The bill requires a manufacturer to file an annual report
18with the commissioner of insurance (commissioner) that
19discloses the wholesale acquisition cost for all prescription
20drugs manufactured by the manufacturer that were sold to a
21person in this state in the immediately preceding calendar
22year. “Wholesale acquisition cost” or “cost” is defined in the
23bill as the manufacturer’s list price for a prescription drug
24for wholesalers or direct purchasers in the United States, not
25including prompt pay or other discounts, rebates, or reductions
26in price, for the most recent month for which the information
27is available, as reported in wholesale price guides or other
28publications of drug or biological pricing data. Within 30
29calendar days of receipt, the commissioner is required to
30publish the information from the annual reports on a publicly
31accessible internet site.
32If a prescription drug sold to a person in this state
33has a cost of $100 or more for a 30-day supply and the cost
34increases 40 percent or more over the three preceding calendar
35years, or increases 15 percent or more in the preceding
-11-1calendar year, the manufacturer of the prescription drug must
2file a report with the commissioner within 30 calendar days
3of the date on which the 40 or 15 percent increase in cost
4occurs. This requirement is applicable to all manufacturers
5that manufactured prescription drugs that are sold to a
6person in this state on or after January 1, 2021. The report
7must include the information detailed in the bill. Certain
8information provided by a manufacturer, as detailed in the
9bill, is considered a confidential record and is required
10to be protected as a trade secret. Within 60 calendar days
11of receipt, the commissioner is required to publish the
12nonconfidential information on the same publicly accessible
13internet site on which the manufacturer’s annual report
14information is published.
15The bill requires each health carrier to submit an annual
16report by February 1 to the commissioner that contains
17information as detailed in the bill across all of the health
18carrier’s health benefit plans. This requirement is applicable
19to all health benefit plans providing for third-party payment
20or prepayment of health or medical expenses that provide a
21prescription drug benefit that have been delivered, issued
22for delivery, continued, or renewed in this state on or after
23January 1, 2021. “Health carrier” is defined in the bill as an
24entity subject to the insurance laws and regulations of this
25state, or subject to the jurisdiction of the commissioner,
26including an insurance company offering sickness and accident
27plans, a health maintenance organization, a nonprofit health
28service corporation, a plan established pursuant to Code
29chapter 509A for public employees, or any other entity
30providing a plan of health insurance, health care benefits,
31or health care services. Certain information provided by
32a health carrier, as detailed in the bill, is considered a
33confidential record and must be protected as a trade secret.
34Prior to May 1 of each year, the commissioner must publish the
35nonconfidential data received by the commissioner on the same
-12-1publicly accessible internet site on which the manufacturers’
2information is published. The data must be aggregated from the
3annual reports submitted by all health carriers.
4The bill directs the commissioner to adopt rules as
5necessary to administer the requirements outlined in the
6bill. The bill details the commissioner’s authority, and
7the process to enforce that authority, for manufacturers’,
8manufacturers’ agents’, health carriers’ or health carriers’
9agents’ violations of a provision of the bill, a rule adopted
10by the commissioner, or of an order issued by the commissioner.
11The bill also requires a carrier to include all cost-sharing
12amounts paid by an enrollee of a health plan, or by another
13person on behalf of an enrollee, as part of the carrier’s
14calculation of an enrollee’s contribution to the enrollee’s
15applicable cost-sharing requirement. This does not
16apply to cost-sharing incurred for a specialty drug or a
17prescription drug for which an A-rated generic equivalent or an
18interchangeable biological product is available. “Cost-sharing
19requirement” is defined in the bill as any copayment,
20coinsurance, deductible, or other out-of-pocket expense
21obligation required of or on behalf of an enrollee in order
22for the enrollee to receive a specific health care service,
23including a prescription drug, covered by the enrollee’s health
24plan. This requirement applies to all health plans delivered,
25issued for delivery, continued, or renewed in this state on
26or after January 1, 2022. The bill excludes state-regulated
27high-deductible health plans (HDHP) from the requirement if
28it will result in the plan not qualifying as an HDHP under
29section 223 of the Internal Revenue Code. The bill also
30prohibits application of the requirement to a carrier or to a
31circumstance in a manner that will conflict with a federal law
32or a federal regulation.
-13-ko/rn