House Bill 784

AN ACT TO REQUIRE THE ATTORNEY GENERAL TO COMPILE CERTAIN LISTS OF PRESCRIPTION DRUGS THAT ARE ESSENTIAL FOR TREATING DIABETES AND THE WHOLESALE ACQUISITION COST OF EACH SUCH DRUG ON THE LIST, AND THOSE DRUGS ON THE LIST THAT HAVE BEEN SUBJECT TO AN INCREASE IN THE WHOLESALE ACQUISITION COST BY A CERTAIN PERCENTAGE DURING THE PRECEDING CALENDAR YEAR OR YEARS; TO REQUIRE THE MANUFACTURERS OF DRUGS INCLUDED ON THOSE LISTS AND PHARMACY BENEFIT MANAGERS TO PROVIDE CERTAIN INFORMATION TO THE ATTORNEY GENERAL REGARDING THOSE DRUGS, THE COSTS OF THOSE DRUGS, THE REASONS FOR THE COST INCREASES OF THOSE DRUGS, AND REBATES RECEIVED BY PHARMACY BENEFIT MANAGERS; TO REQUIRE THE ATTORNEY GENERAL TO COMPILE A REPORT BASED ON THAT INFORMATION; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. As used in this act, the following terms shall have the meanings as defined in this section:

(a) "Manufacturer" means a person who:

(i) Derives, produces, prepares, compounds, mixes, cultivates, grows or processes any drug or medicine;

(ii) Repackages any drug or medicine for the purposes of resale; or

(iii) Produces or makes any devices or appliances that are restricted by federal law to sale by or on the order of a physician.

(b) "Pharmacy" means every store or shop licensed by the State Board of Pharmacy where drugs, controlled substances, poisons, medicines or chemicals are stored or possessed, or dispensed or sold at retail, or displayed for sale at retail, or where prescriptions are compounded or dispensed. The term does not include an institutional pharmacy.

(d) "Wholesale acquisition cost" means the manufacturer's list price for a prescription drug to wholesalers or direct purchasers in the United States, not including any discounts, rebates or reductions in price, as reported in wholesale price guides or other publications of drug pricing data.

SECTION 2. On or before February 1 of each year, the Attorney General shall compile:

(a) A list of prescription drugs that the Attorney General determines to be essential for treating diabetes in this state and the wholesale acquisition cost of each such drug on the list. The list must include, without limitation, all forms of insulin and biguanides marketed for sale in this state.

(b) A list of prescription drugs described in paragraph (a) of this section that have been subject to an increase in the wholesale acquisition cost of a percentage equal to or greater than:

(i) The percentage increase in the Consumer Price Index, Medical Care Component during the immediately preceding

calendar year; or

(ii) Twice the percentage increase in the Consumer Price Index, Medical Care Component during the immediately

preceding two (2) calendar years.

SECTION 3. On or before April 1 of each year, the manufacturer of a prescription drug that appears on the most current list compiled by the Attorney General under paragraph (a) of Section 2 of this act shall prepare and submit to the Attorney General, in the form prescribed by the Attorney General, a report which must include:

(a) The costs of producing the drug;

(b) The total administrative expenditures relating to the drug, including marketing and advertising costs;

(c) The profit that the manufacturer has earned from the drug and the percentage of the manufacturer's total profit for the period during which the manufacturer has marketed the drug for sale that is attributable to the drug;

(d) The total amount of financial assistance that the manufacturer has provided through any patient prescription assistance program;

(e) The cost associated with coupons provided directly to consumers and for programs to assist consumers in paying copayments, and the cost to the manufacturer attributable to the redemption of those coupons and the use of those programs;

(f) The wholesale acquisition cost of the drug;

(g) A history of any increases in the wholesale acquisition cost of the drug over the five (5) years immediately preceding the date on which the report is submitted, including the amount of each such increase expressed as a percentage of the total wholesale acquisition cost of the drug, the month and year in which each increase became effective and any explanation for the increase;

(h) The aggregate amount of all rebates that the manufacturer has provided to pharmacy benefit managers for sales of the drug within this state; and

(i) Any additional information prescribed by regulation of the Attorney General for the purpose of analyzing the cost of prescription drugs that appear on the list compiled under paragraph (a) of Section 2 of this act, trends in those costs and rebates available for such drugs.

SECTION 4. On or before April 1 of a year in which a drug is included on the list compiled under paragraph (b) of Section 2 of this act, the manufacturer of the drug shall submit to the Attorney General a report describing the reasons for the increase in the wholesale acquisition cost of the drug described in that paragraph. The report must include, without limitation:

(a) A list of each factor that has contributed to the increase;

(b) The percentage of the total increase that is attributable to each factor;

(d) Any other information prescribed by regulation by the Attorney General.

SECTION 5. (1) Except as otherwise provided in subsection (2) of this section, on or before April 1 of each year, a pharmacy benefit manager shall submit to the Attorney General a report which includes:

(a) The total amount of all rebates that the pharmacy benefit manager negotiated with manufacturers during the immediately preceding calendar year for prescription drugs included on the list compiled by the Attorney General under paragraph (a) of Section 2 of this act;

(b) The total amount of all rebates described in paragraph (a) that were retained by the pharmacy benefit manager; and

(c) The total amount of all rebates described in paragraph (a) that were negotiated for purchases of such drugs for use by:

(i) Recipients of Medicare;

(ii) Recipients of Medicaid;

(iii) Persons covered by third parties that are governmental entities that are not described in subparagraph (i) or (ii) of this paragraph;

(iv) Persons covered by third parties that are not governmental entities; and

(v) Persons covered by a plan described in subsection (2) of this section to the extent required by a contract entered into under subsection (3) of this section.

(2) Except as otherwise provided in subsection (3) of this section, the requirements of this section do not apply to the coverage of prescription drugs under a plan that is subject to the Employee Retirement Income Security Act of 1974 or any information relating to that coverage.

(3) A plan described in subsection (2) of this section may, by contract, require a pharmacy benefit manager that manages the coverage of prescription drugs under the plan to comply with the requirements of this section.

SECTION 6. On or before June 1 of each year, the Attorney General shall analyze the information submitted under Sections 3, 4 and 5 of this act and compile a report on the price of the prescription drugs that appear on the most current lists compiled by the Attorney General under Section 2 of this act, the reasons for any increases in those prices and the effect of those prices on overall spending on prescription drugs in this state. The report may include, without limitation, opportunities for persons and entities in this state to lower the cost of drugs for the treatment of diabetes while maintaining access to those drugs.

SECTION 7. This act shall take effect and be in force from and after July 1, 2018.