Bill Text: MI HB5691 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Health; pharmaceuticals; increase of wholesale acquisition cost of prescription drug; require manufacturers of prescription drugs to provide notice under certain circumstances. Amends 1978 PA 368 (MCL 333.1101 - 333.25211) by adding secs. 17748e, 17748f & 17748g. TIE BAR WITH: HB 5690'18
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-03-07 - Bill Electronically Reproduced 03/06/2018 [HB5691 Detail]
Download: Michigan-2017-HB5691-Introduced.html
HOUSE BILL No. 5691
March 6, 2018, Introduced by Reps. Garrett, Hoadley, Elder, Chang, Faris, Geiss, Cochran, Peterson, Neeley, Pagan, Brinks, Gay-Dagnogo, Byrd, Ellison, Hertel, Sabo, Scott, Robinson, Yancey, Cambensy, Camilleri, Chirkun, Lasinski, Durhal, Moss, Clemente, LaGrand, Liberati, Dianda, Hammoud, Rabhi, Howrylak, Singh, Guerra, Phelps, Jones and Kosowski and referred to the Committee on Health Policy.
A bill to amend 1978 PA 368, entitled
"Public health code,"
(MCL 333.1101 to 333.25211) by adding sections 17748e, 17748f, and
17748g.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 17748e. (1) Subject to subsection (2), beginning October
1, 2018, a manufacturer of a prescription drug that has a wholesale
acquisition cost that is more than $40.00 for a course of treatment
and that is made available in this state shall notify a qualified
purchaser that is registered under subsection (5) if the
manufacturer is increasing the wholesale acquisition cost of the
prescription drug by 12% or more during any 24-month period.
(2) The manufacturer shall provide the notice required under
subsection (1) at least 60 days before the planned effective date
of the increase in the wholesale acquisition cost. The notice must
include all of the following:
(a) The effective date of the increase in the wholesale
acquisition cost.
(b) The wholesale acquisition cost of the prescription drug as
of the date of the notice and the dollar amount of the increase in
the wholesale acquisition cost as of the effective date of the
increase.
(c) Whether a change or improvement to the prescription drug
necessitates the increase in the wholesale acquisition cost and a
description of any change or improvement.
(3) Beginning October 1, 2018 and each quarter thereafter, a
manufacturer that increases the wholesale acquisition cost of a
prescription drug described in subsection (1) shall report all of
the following information to the commission in a form and manner
required by the commission:
(a) The amount of the increase in the wholesale acquisition
cost of the prescription drug.
(b) A description of the specific financial and nonfinancial
factors considered by the manufacturer in increasing the wholesale
acquisition cost of the prescription drug and an explanation of how
the factors justified the increase in the wholesale acquisition
cost of the prescription drug.
(c) If the prescription drug was manufactured by the
manufacturer within the 5 years preceding the date of the increase
in the wholesale acquisition cost of the prescription drug, a
schedule of the increases in the wholesale acquisition cost of the
prescription drug for the previous 5 years.
(d) If the prescription drug was acquired by the manufacturer
within the 5 years preceding the date of the increase in the
wholesale acquisition cost of the prescription drug, all of the
following information:
(i) The wholesale acquisition cost of the prescription drug at
the time it was acquired by the manufacturer and in the year before
it was acquired by the manufacturer.
(ii) The name of the company from which the prescription drug
was acquired by the manufacturer, the date it was acquired, and the
purchase price.
(iii) The year the prescription drug was introduced to the
market and the wholesale acquisition cost of the drug at the time
of introduction.
(e) If the prescription drug is under patent, the patent's
expiration date.
(f) Whether the prescription drug is a multiple source drug,
an innovator multiple source drug, a noninnovator multiple source
drug, or a single source drug, as those terms are defined in 42 USC
1396r-8.
(g) Whether there has been a change or improvement to the
prescription drug. If there has been a change or improvement to the
prescription drug, the manufacturer shall provide documentation of
the increase with the report required under this subsection.
(h) The volume of sales of the prescription drug in the United
States for the year preceding the date of the increase of the
wholesale acquisition cost of the prescription drug.
(4) The commission shall post on a publicly available website
the information received by it under subsection (3) within 60 days
after receiving the information. The commission shall post the
information in a manner that discloses the information for each
prescription drug. However, if the commission determines that any
information received by it under subsection (3) from a manufacturer
is confidential or proprietary and the information would cause
competitive harm to the manufacturer if disclosed, the commission
shall refrain from posting that information on the publicly
available website or otherwise disclosing that information to the
public.
(5) A qualified purchaser that wishes to receive notice under
subsection (1) shall register with the commission. The commission
shall make available to a manufacturer a list of qualified
purchasers that have registered with the commission under this
subsection for the purpose of providing notice under subsection
(1).
(6) A manufacturer that violates this section is subject to an
administrative fine of $100,000.00 per day for every day that the
information is not provided in accordance with this section.
(7) As used in this section and sections 17748f and 17748g:
(a) "Commission" means the drug consumer protection commission
created in section 17748g(1).
(b) "Course of treatment" means the recommended daily dosage
units of a prescription drug pursuant to its prescribing label as
approved by the FDA for a course of treatment that is 30 days or
less.
(c) "Excessive price" means a price that is defined as
unlawful under section 3(1)(z) of the Michigan consumer protection
act, 1976 PA 331, MCL 445.903.
(d) "Qualified purchaser" means any of the following persons
that purchase the prescription drug or provide reimbursement for
the prescription drug:
(i) An insurer as that term is defined in section 106 of the
insurance code of 1956, 1956 PA 218, MCL 500.106.
(ii) A health maintenance organization, as that term is
defined in section 3501 of the insurance code of 1956, 1956 PA 218,
MCL 500.3501.
(iii) A pharmacy benefit manager.
(iv) A department of this state.
(e) "Unconscionable" means any of the following:
(i) Excessive and not justified by the cost of producing the
prescription drug or the cost of the appropriate expansion of
access to the prescription drug to promote public health.
(ii) Results in consumers for whom the prescription drug is
prescribed having no meaningful choice about whether to purchase
the prescription drug because of the importance of the prescription
drug to their health and insufficient competition in the market for
the prescription drug.
(f) "Wholesale acquisition cost" means that term as defined in
42 USC 1395w-3a.
Sec. 17748f. (1) Beginning October 1, 2018, a manufacturer of
a prescription drug that is made available in this state shall
notify the commission if the manufacturer is introducing a new
prescription drug into the market at a wholesale acquisition cost
that exceeds the threshold set for a specialty drug under the
Medicare prescription drug, improvement, and modernization act of
2003, public law 108-173. The manufacturer shall provide the notice
in writing and within 3 days after the prescription drug is
commercially available. However, a manufacturer may provide the
notice pending the approval of the FDA if commercial availability
is expected within 3 days after the FDA's approval.
(2) Subject to subsection (3), within 30 days of providing the
notice required under subsection (1), the manufacturer shall report
all of the following information to the commission in a form and
manner required by the commission:
(a) If the prescription drug was not developed by the
manufacturer, the date the prescription drug was acquired and the
purchase price.
(b) A description of the marketing and pricing plans that are
used to launch the new prescription drug in the United States and
internationally.
(c) The estimated volume of patients that may be prescribed
the prescription drug.
(d) Whether the prescription drug was granted breakthrough
therapy designation or priority review by the FDA before final
approval.
(3) If the information described in subsection (2) is
available in the public domain, the manufacturer may limit the
information it includes in its report to the commission under
subsection (2).
(4) The commission shall post on a publicly available website
the information received by it under subsection (2) on at least a
quarterly basis. The commission shall post the information in a
manner that discloses the information for each prescription drug.
(5) A manufacturer that violates this section is subject to an
administrative fine of $100,000.00 per day for every day that the
information is not provided in accordance with this section.
Sec. 17748g. (1) The drug consumer protection commission is
created within the department.
(2) The commission consists of the following 13 members
appointed by the governor after considering the recommendations of
the senate majority leader, the senate minority leader, the speaker
of the house of representatives, and the house minority leader:
(a) Six individuals who represent consumer health advocacy
groups.
(b) One individual who represents pharmacy benefit managers.
(c) Three individuals who represent health insurers, health
maintenance organizations, or other persons who provide
prescription drug benefits.
(d) The director of the department or his or her designee.
(e) The director of the department of health and human
services or his or her designee.
(f) The director of the department of insurance and financial
services or his or her designee.
(3) The members first appointed to the commission must be
appointed within 15 days after the effective date of this section.
(4) Members of the commission shall serve for terms of 4 years
or until a successor is appointed, whichever is later, except that
of the members first appointed 1 shall serve for 1 year, 3 shall
serve for 2 years, and 3 shall serve for 3 years.
(5) If a vacancy occurs on the commission, the governor shall
make an appointment for the unexpired term in the same manner as
the original appointment.
(6) The governor may remove a member of the commission for
incompetence, dereliction of duty, malfeasance, misfeasance, or
nonfeasance in office, or any other good cause.
(7) The governor shall call the first meeting of the
commission. At the first meeting, the commission shall elect from
among its members a chairperson and other officers as it considers
necessary or appropriate. After the first meeting, the commission
shall meet at least quarterly, or more frequently at the call of
the chairperson or if requested by 4 or more members.
(8) A majority of the members of the commission constitute a
quorum for the transaction of business at the meeting of the
commission. A majority of the members present and serving are
required for official action of the commission.
(9) The business that the commission may perform must be
conducted at a public meeting of the commission held in compliance
with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275.
(10) Except as otherwise provided in section 17748e(4), a
writing prepared, owned, used, in the possession of, or retained by
the commission is subject to disclosure under the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246.
(11) Members of the commission shall serve without
compensation. However, members of the commission may be reimbursed
for their actual and necessary expenses incurred in the performance
of their official duties as members of the commission.
(12) Upon receiving a report filed under section 17748e or
17748f, the commission shall review the contents of the report to
determine whether a manufacturer is charging an excessive price for
a prescription drug or whether a manufacturer's increase in the
wholesale acquisition cost of a prescription drug is
unconscionable. In making its determination, the commission may
hold public hearings to hear from consumers of the prescription
drug and consult with scientists, health researchers, and any
individual with knowledge or expertise in the pricing of
prescription drugs or the pharmaceutical industry.
(13) If the commission determines that a manufacturer has
charged an excessive price for a prescription drug or that the
increase in the wholesale acquisition cost of a prescription drug
is unconscionable, the commission shall submit a written summary of
its findings to the office of the attorney general and request that
the attorney general investigate under section 3j of the Michigan
consumer protection act, 1976 PA 331, MCL 445.903j.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 5690 (request no.
04293'17) of the 99th Legislature is enacted into law.
