Overview

S.F. 1098 requires drug manufacturers to report information on prescription drug prices to the commissioner of health for prescription drugs that increase their price over a specified amount; for new prescription drugs meeting a specified price threshold; and for newly acquired prescription drugs whose price exceeds a specified price threshold. S.F. 1098 also requires the commissioner of health to post the information reported on the department’s website.

Summary

Section 1 (62J.84). Prescription drug price transparency. Establishes prescription drug price transparency.

Subd. 1. Short title. Permits this section to be cited as the "Prescription Drug Price Transparency Act”

Sub. 2. Definitions. Defines the following terms: biosimilar, brand name drug, commissioner, generic drug, manufacturer, new prescription drug, patient assistance program, prescription drug, and price.

Subd. 3. Prescription drug price increases reporting. Paragraph (a) requires drug manufacturers, beginning in October 1, 2021, to submit to the commissioner of health information described in paragraph (b) for the following:

• each prescription drug whose price was $100 or greater for a 30-day supply or for a course of treatment lasting less than 30 days; and
• for brand name drugs where the price of the drug increases by ten percent or more within the previous 12-month period or an increase of 16 percent or greater over the previous 24-month period; and
• for generic drugs where there is an increase of 50 percent or greater in the price over the previous 12-month period.

Paragraph (b) requires the following information to be submitted within 60 days after the price goes into effect:

• the name and price of the drug and the net increase;
• the factors contributing to the increase;
• the name of any generic version available;
• the introductory price of the drug when it was approved by the FDA and the net yearly increase in the price over the previous five years;
• the direct costs incurred by the manufacturer associated with manufacturing, marketing, researching and developing, and distributing the prescription drug;
• the total sales revenue for the drug during the previous 12-month period;
• the manufacturer’s net profit attributable to the drug during the previous 12-month period;
• the total amount of financial assistance the manufacturer has provided through patient assistance programs;
• any agreement between a manufacturer and other entity contingent on any delay in offering to market a generic version of the drug;
• the patent expiration date if under patent;
• the name and location of the company that manufactured the drug; and
• for a brand name prescription drug, the ten highest prices paid for the drug during the previous year in any country other than the US.

Paragraph (c) permits the manufacturer to submit any documentation necessary to support the reported information.

Subd. 4. New prescription drug price reporting. Paragraph (a) requires a drug manufacturer beginning October 15, 2021, to submit to the commissioner no later than 60 days after the manufacturer introduces a new brand name drug with a price greater than the tier threshold established by the Centers for Medicare and Medicaid Services for speciality drugs in Medicare Part D for a 30 day supply or a new generic drug or biosimilar drug with a price that is greater than the tier threshold established by the Centers for Medicare and Medicaid Services for speciality drugs in Medicare Part D for a 30 day supply and is not at least 15 percent lower than the referenced brand name drug when the generic or biosimilar drug was launched, the following information:

• the price of the drug;
• whether the FDA granted the new drug a breakthrough therapy designation or a priority review;
• the direct costs incurred by the manufacturer associated with manufacturing, marketing, and distributing the prescription drug; and
• the patent expiration date if under patent.

Paragraph (b) permits the manufacturer to submit any documentation necessary to support the reported information.

Subd. 5. Newly acquired prescription drug price reporting. Paragraph (a) requires a drug manufacturer, beginning October 1, 2021, to submit to the commissioner information described in paragraph (b) for the following:

• for every newly acquired prescription drug for which the price increases by $100 or more for a 30-day supply or for a course of treatment lasting less than 30 days; and
• for a newly acquired brand name drug where there is an increase of ten percent or more over the previous 12-month period or an increase of 16 percent or more over the previous 24-month period; and
• for a newly acquired generic drug where there is a 50 percent or more increase in price over the previous 12-month period.

Paragraph (b) requires the acquiring drug manufacturer to submit the following information within 60 days after the acquiring manufacturer begins to sell the newly acquired drug:

• the price of the drug at the time of the acquisition and in the year before the acquisition;
• the name of the company from which the drug was acquired, the date acquired, and the purchase price;
• the year the drug was introduced on the market and the price at the time of introduction;
• the price of the drug for the previous five years;
• any agreement between a manufacturer and other entity contingent on any delay in offering to market a generic version of the drug; and
• the patent expiration date of the drug if the drug is under patent.

Paragraph (c) permits the manufacturer to submit any documentation necessary to support the reported information.

Subd. 6. Public posting of prescription drug price information. Paragraph (a) requires the commissioner to post on the department’s website the list of drugs that have been reported by the manufacturers under this section and the information reported on these drugs by the manufacturer. The commissioner may contract with private entity or consortium to meet this requirement.

Paragraph (b) specifies that the information must be published in an easy-to-read format and must not be aggregated in a manner that prevents the identification of the drug.

Paragraph (c) specifies that the commissioner shall not post any information if the information is: not public data under section 13.02; trade secret information under section 13.37; or trade secret information pursuant to the Defend Trade Secrets Act of 2016. If a drug manufacturer seeks to withhold information from public disclosure based on one of these privacy protections, the manufacturer must clearly and specifically identify the protected information and describe the legal basis when the manufacturer submits the information to the commissioner. If the commissioner disagrees with the manufacturer, the commissioner must provide the manufacturer with a notice stating that the information will be posted publicly 30 days after the date of the notice.

Paragraph (d) specifies that if any information is withheld from public disclosure, the commissioner shall post a report describing the nature of the information and the basis for withholding the information from disclosure.

Subd. 7. Consultation. Permits the commissioner to consult with a private entity or consortium, the University of Minnesota, or the commissioner of commerce in issuing the form and format of the information reported under this section; in public disclosure of the information; and in taking any other action pursuant to implementing this section.  Permits the commissioner to consult with representatives of the manufacturers to establish a standard format for reporting information to minimize administrative burdens to the state and to the manufacturers.

Subd. 8. Enforcement and penalties. Permits the commissioner to impose a civil penalty on a manufacturer, not to exceed $10,000 per day for a violation, for failing to submit timely reports or notices; failing to provide required information; or providing inaccurate or incomplete information. Civil penalties collected under this section must be deposited in the health care access fund.

Subd. 9. Legislative report. Requires the commissioner to annually submit to the legislature beginning January 15, 2022, a report on the implementation of  this section including its effectiveness in promoting transparency in pharmaceutical pricing; enhancing the understanding of pharmaceutical spending trends; and assisting the state and other payers in managing pharmaceutical costs.

Section 2 adjusts the appropriation to the commissioner of health passed last session to implement section 62J.84.