MassHealth Drug Pricing 1

SECTION 42.   Chapter 118E of the General Laws is hereby amended by inserting after section 12 the following section:-

Section 12A. (a) Notwithstanding any general or special law to the contrary and subject to required federal approvals, the executive office of health and human services may directly negotiate supplemental rebate agreements with manufactures of prescribed drugs without regard to any otherwise applicable requirements set forth in 801 CMR 21.00 or any successor regulation in order to maximize value to the commonwealth, including agreements that utilize guaranteed net prices based on the public health value of such drugs as determined by an independent third party designated by the secretary of health and human services, or another appropriate measure of value.

(b) In the event a manufacturer of such drugs and the executive office are unable to successfully conclude negotiations for a supplemental rebate agreement pursuant to subsection (a), the secretary may require the manufacturer to disclose within a reasonable time any records that describe or relate to the manufacturer's pricing of any such drugs. Such records shall be exempt from the public records law, but the secretary may prepare and produce a report summarizing such records to the extent allowable under applicable state and federal law, and may hold a public hearing at which the manufacturer is required to appear and testify.

(c) In the event the drug manufacturer does not comply with the secretary's request for records under subsection (b), the secretary may impose appropriate sanctions against the drug manufacturer, including reasonable monetary penalties.

(d) If, after review of any records furnished to the executive office under subsection (b), the executive office and manufacturer are unable to successfully conclude negotiations for a supplemental rebate agreement and the secretary determines that the drug manufacturer's pricing of the drug is unreasonable or excessive, the secretary may impose appropriate sanctions against the drug manufacturer, including reasonable monetary penalties.

(e) The executive office shall adopt any written policies, procedures or regulations the secretary determines necessary to implement this section.
 
 

Summary:
This section allows MassHealth to negotiate supplemental rebate agreements directly with drug manufacturers and gives MassHealth additional tools to encourage manufacturers to engage in good faith negotiations, including reporting requirements and potentially sanctions on manufacturers that refuse to enter into such agreements.