CS/HB 33/a PRESCRIPTION DRUG PRICE TRANSPARENCY ACT

Rep Pamelya Herndon

Actions: HPREF [1] not prntd-HRC [2] w/drn-prntd-ref- HHHC/HAFC-HHHC [4] DP-HAFC [7] DNP-CS/DP/a [10] fl/a- PASSED/H (67-0) [7] SHPAC-SHPAC [8] DP [14] PASSED/S (37-0) SGND BY GOV (Mar. 1) Ch. 33.

Scheduled: Not Scheduled

 HB 33 would require reporting on the sale of drug products to the  Superentend of Insurance and the reports to two Legislative Committees. HB33 would also allow the Superintendent  to administer penalties for those entities who do not comply with reporting requiremenmts. An appropriation of $100,000 is provided for administrative cost to carry out the reporting process to the Office of hte Superintendent 

 Synopsis: HB 33 relates to prescription drugs while enacting the Prescription Drug Price Transparency Act. Reporting would be required of entities across the prescription supply chain to the Superintendent and then to the Legislative Finance Committee and the Legislative Health and Human Services Committee, and then in aggregate form to the public. 

An appropriation is made to the superintendent's office in order to make reports and enforce penalties for non-compliance.

Analysis
HB 33 creates the "Prescription Drug Price Transparency Act" and is made part of the New Mexico Insurance Code. Extensive definitions are provided and HB 33 then details an extensive listing of reports that are to be submitted to the Superintendent for the purpose providing trending information. 

HB 33 requires by May 1, 2025, and annually thereafter, each manufacturer shall submit data to the Superintendent, in a form and manner prescribed by the Superintendent, that includes the name and national drug code for each: prescription drug product that has a wholesale acquisition cost of four hundred dollars ($400) or more for a thirty-day supply or for a course of treatment that is less than thirty days; (2) brand name drug that has increased in wholesale acquisition cost by ten percent or more in the previous calendar year; (3) prescription drug product that has increased in wholesale acquisition cost by sixteen percent or more over the course of the previous two calendar years; and (4) generic drug that has increased in wholesale acquisition cost by thirty percent or more in the previous calendar year.

In addition, the introductory wholesale acquisition cost of the prescription drug product when the prescription drug product, the annual increase in the wholesale acquisition cost for the last five years, the annual manufacturing, marketing and distribution cost, the total revenue for the last year for the drug product, the net profit, the product expiration date, the ten highest negotiated prices for the United Kingdom, and the European Union, any agreement between the manufacturer and another entity that involves a delay in marketing a generic version of the prescription drug product,  the names and prices of any generic equivalents of the prescription drug product, the total amount of manufacturer supported financial assistance provided to consumers of the prescription drug product; and other information requested by the Superintendent. 

The Superintendent is to be notified if the manufacturer intends to introduce a new product costing more than $400 for a thirty-day supply. The data is not discoverable under the Public Records Act and also must kept confidential by the Superintendent.

Pharmacy Service Administrative Organizations,  and Health Plans shall submit data to the superintendent, in a form and manner prescribed by the superintendent, that includes: (1) a list of the twenty-five most frequently prescribed prescription drug products; (2) a list of the twenty-five most costly prescription drug products by total annual plan spending; (3) a list of the twenty-five prescription drug products with the highest increase in total annual spending compared to the previous calendar year; and (4) an evaluation on the effect that the cost of prescription drug products has on health care premiums.

Pharmacy Benefit Managers are required to report (1) the aggregate rebates and fees collected from manufacturers; and (2) the aggregate dollar amount of rebates and fees collected from manufacturers that were: (a) passed on to: 1) authorized health insurers; and 2) consumers at the point of sale of a prescription drug product; or (b) retained by the pharmacy benefits manager.

All of these reports are to be provided by these entities listed above by May 1, 2025 and annually thereafter. 

The Superintendent is to provide his reporting by September 30, 2025, and annually thereafter, the Superintendent shall submit to the Legislative Finance Committee and the Legislative Health and Human Services Committee a report that includes: (1) aggregate market trends for prescription drug products across the state and country; (2) the impact of prescription drug product prices in the state, including the overall impact of prescription drug product costs on health care premiums; (3) the geographic and demographic populations in the state most affected by high prescription drug product cost.

The Superintendent can make recommendations for further legislation. Aggregate data may be released on the Superintendents website but not confidential or proprietary data. 

HB33 allows for penalties for breaches in the reporting requirements and the sum of $100,000 is appropriated for implementation purposes. The effective date of HB 33 is January 1, 2025.
 

 
Amended February 1, 2024 in HAFC
HAFCcs/HB33a: The House Appropriations and Finance Committee amended HB33cs by striking all appropriations that were originally included in HB33cs. 
Specifically all language : On page 1, lines 19 and 20, strike “; MAKING AN APPROPRIATION”. 2. On page 17, strike lines 3 through 16




Floor Amendment February 7, 2024 on the House Floor:
House Floor Amendment to HB33cs/a/fla to state
1. On page 2, line 25, strike "biological" and insert in lieu thereof "biosimilar".
 2. On page 5, line 10, after "product", strike the remainder of the line, strike lines 11 through 21 and strike line 22 up to the semicolon. 3. On page 15, line 1, strike "September 30" and insert in lieu thereof "December 31". 
4. On page 15, line 17, strike "September 30" and insert in lieu thereof "December 31".
Amendment sponsored by Representative Pamelya Herndon 
 

 Committee Substitute February 02, 2024 in HAFC 
HAFCcs/HB33: The House Appropriations and Finance Committee Substitute for HB33 the Prescription Drug Price and Transparency Act and enacts a new section of the New Mexico Insurance Code.
HB33cs requires the Superintendent of Insurance to collect pricing and other data from manufacturers, health plans, pharmacy service administrative organizations and pharmacy benefit managers to report certain data or be met with penalties. Two appropriations are provided in HB33cs. 
Manufacturers are to submit :  including products and codes with a wholesale price of $400 for a thirty-day supply, including : the name drug that has increased in wholesale acquisition cost by ten percent or more in the previous calendar year; (2) brand name drug that has increased in wholesale acquisition cost by sixteen percent or more over the course of the previous two calendar years; or (3) generic drug or biosimilar product that has increased in wholesale acquisition cost by thirty percent or more in the previous calendar year.
The manufacturer shall provide the following information: (1) the introductory wholesale acquisition cost of the prescription drug product when the prescription drug product was approved for marketing by the Federal Food and Drug Administration; (2) the annual increase in the prescription drug product's wholesale acquisition cost over the previous five calendar years; (3) the direct costs associated with manufacturing, marketing and distributing the prescription drug product; (4) the total revenue from the prescription drug product over the previous calendar year; (5) the net profit attributable to the prescription drug product over the previous calendar year; (6) the patent expiration date for the prescription drug product; (7) the ten highest government-negotiated prices of the prescription drug product in European Union countries and the United Kingdom; (8) any agreement between the manufacturer and another entity that involves a delay in marketing a generic version of the prescription drug product; (9) the names and prices of any generic equivalents of the prescription drug product; (10) the total amount of manufacturer support financial assistance provided to consumers of the prescription drug product; and (11) other information requested by the Superintendent 
Other reporting requirements pertaining to the introduction of new drug pricing that exceeds Medicare Part D specialty-tier threshold, is to be reported to the Superintendent The same requirement applies to generic drugs exceeding the Medicare Part D specialty tier threshold.
A manufacturer of a prescription drug product that is increasing in price enough to meet the reporting requirements of Subsection A of this section shall notify the Superintendent the price increase in writing no later than the date that the price increase becomes effective. An outline of reporting requirements include: (1.)the date of the price increase; (2) the current wholesale acquisition cost of the prescription drug product; (3) the dollar amount of any known future increase of the wholesale acquisition cost of the prescription drug product; and (4) a statement regarding whether a change or improvement in the prescription drug product necessitates the price increase, and if so, the manufacturer shall describe the change or improvement.
The Office of the Superintendent and its designees shall keep confidential all information.
Pharmacy Services Administrative Agencies are to provide certain data to the Superintendent that includes: (1) negotiated reimbursement rate of the twenty-five prescription drug products with the highest reimbursement rate; (2) twenty-five prescription drug products with the highest year-to-year percentage change in reimbursement rate; (3) twenty-five prescription drug products with the highest year-to-year change in reimbursement rate based on the total dollar amount of change; and (4) schedule of fees charged to pharmacies for the services provided by the pharmacy services administrative organization.
Pharmacy services administrative organizations that charge a flat fee and do not charge pharmacy drug product pricing are exempt from the above reporting requirements. 
The Superintendent shall include in every contract for services related to the Prescription Drug Price Transparency Act a requirement that contractors and subcontractors do not disclose confidential information.
Authorized Health Insurers in New Mexico are to report by May 1, 2025 and annually thereafter the following: (1) a list of the twenty-five most frequently prescribed prescription drug products; (2) a list of the twenty-five most costly prescription drug products by total annual plan spending; (3) a list of the twenty-five prescription drug products with the highest increase in total annual spending compared to the previous calendar year; and (4) an evaluation on the effect that the cost of prescription drug products has on health care premiums.
The information is to be confidential and not subject to the Public Records Act.
Pharmacy Benefit Management are to report by May 1, 2025 and annually thereafter: (1) the aggregate rebates and fees collected from manufacturers; and (2) the aggregate dollar amount of rebates and fees collected from manufacturers that were: (a) passed on to: 1) authorized health insurers; and 2) consumers at the point of sale of a prescription drug product; or (b) retained by the pharmacy benefits manager. B. A report submitted by a pharmacy benefits manager shall not disclose the identity of a specific authorized health insurer or consumer, the price charged for a specific prescription drug product or class of prescription drug products or the amount of any rebate or fee provided for a specific prescription drug product or class of prescription drug products.
The Superintendent is to provide reports to the Legislative Finance Committee and the Legislative Health and Human Services Committee that include: (1) aggregate market trends for prescription drug products across the state and country; (2) the impact of prescription drug product prices in the state, including the overall impact of prescription drug product costs on health care premiums; (3) the geographic and demographic populations in the state most affected by high prescription drug product costs; and (4) any recommendations the Superintendent has on further action or legislation needed to make prescription drug products more affordable and reduce overall patient cost in the state. 
By September 30, 2025, and annually thereafter, the Superintendent shall aggregate the information collected from manufacturers, pharmacy services administrative organizations, authorized health insurers and pharmacy benefits managers and submit a report on the aggregate data to the legislative finance committee and the legislative health and human services committee. The Superintendent shall hold an annual public meeting that is focused on discussing the contents of the report.
The reports are to be made public on the Superintendents website minus any proprietary data.
Two appropriations are provided in HB33cs. Two hundred and seventy-five thousand is provided for the first two fiscal years to carry out the Act and an additional thirty-three thousand dollars is appropriated to the Health Care Authority for the pharmacy services administrative organization reports. 
The Superintendent may impose penalties for untimely reporting, inaccurate reporting and failing to submit data as required. The Superintendent may conduct audits at the manufacturer, pharmacy services administrative organization, authorized health insurer or pharmacy benefits manager expense. 
The effective date of the provisions of this Act is January 1, 2025.