LRB-2313/1
EKL:cdc
2021 - 2022 LEGISLATURE
September 10, 2021 - Introduced by Representatives Subeck, Hesselbein,
Anderson, Cabral-Guevara, Cabrera, Conley, Considine, Doyle, Emerson,
Hebl, Hong, Milroy, L. Myers, Neubauer, S. Rodriguez, Shankland,
Shelton, Sinicki, Snodgrass, Spreitzer, Stubbs, Vining and Vruwink,
cosponsored by Senators Smith, Erpenbach, Agard, Bewley, Carpenter,
Johnson, Larson, Pfaff and Ringhand. Referred to Committee on Health.
AB544,1,3
1An Act to create 15.07 (3) (bm) 7., 15.735 and subchapter VI (title) of chapter
2601 [precedes 601.78] of the statutes;
relating to: creating a prescription drug
3affordability review board and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill creates a prescription drug affordability review board, whose purpose
is to protect Wisconsin residents and other stakeholders from the high costs of
prescription drugs. The board consists of the commissioner of insurance and the
following members, all of whom are appointed by the governor for four-year terms:
1. Two members who represent the pharmaceutical drug industry, at least one
of whom is a licensed pharmacist.
2. Two members who represent the health insurance industry.
3. Two members who represent the health care industry, at least one of whom
is a licensed practitioner.
4. Two members who represent the interests of the public.
The bill requires the board to meet in open session at least four times per year
to review prescription drug pricing information. The board must provide at least two
weeks' public notice of its meetings, make the meeting's materials publicly available
at least one week prior to meeting, and provide the opportunity for public comment.
The bill imposes conflict of interest requirements for the board relating to recusal
and public disclosure of certain conflicts. The bill directs the board to access and
assess drug pricing information, to the extent practicable, by accessing and assessing
information from other states, by assessing spending for the drug in Wisconsin, and
by accessing other available pricing information.
Under the bill, the board must conduct drug cost affordability reviews. The first
step in the reviews is for the board to identify prescription drugs whose increase in
wholesale acquisition cost exceeds specified thresholds and other prescription drugs
that may create affordability challenges for the health care system in Wisconsin. For
each identified prescription drug, the board must determine whether to conduct an
affordability review by seeking stakeholder input and considering the average
patient cost share for the drug. During an affordability review, the board must
determine whether use of the prescription drug that is fully consistent with the
labeling approved by the federal Food and Drug Administration or standard medical
practice has led or will lead to an affordability challenge for the health care system
in Wisconsin. In making this determination, the bill requires the board to consider
a variety of factors, which include the following:
1. The drug's wholesale acquisition cost.
2. The average monetary price concession, discount, or rebate the
manufacturer provides, or is expected to provide, for the drug to health plans.
3. The total amount of price concessions, discounts, and rebates the
manufacturer provides to each pharmacy benefit manager for the drug.
4. The price at which therapeutic alternatives have been sold and the average
monetary concession, discount, or rebate the manufacturer provides, or is expected
to provide, to health plan payors and pharmacy benefit managers for therapeutic
alternatives.
5. The costs to health plans based on patient access consistent with federal
labeled indications and recognized standard medical practice.
6. The impact on patient access resulting from the drug's cost relative to
insurance benefit design.
7. The current or expected dollar value of drug–specific patient access
programs that are supported by the manufacturer.
8. The relative financial impacts to health, medical, or social services costs that
can be quantified and compared to baseline effects of existing therapeutic
alternatives.
9. The average patient copay or other cost sharing for the drug.
If the board determines that a prescription drug will lead to an affordability
challenge, the bill directs the board to establish an upper payment limit for that drug
that applies to all purchases and payor reimbursements of the drug dispensed or
administered to individuals in Wisconsin. In establishing the upper payment limit,
the board must consider the cost of administering the drug, the cost of delivering it
to consumers, and other relevant administrative costs. For certain drugs, the board
must solicit information from the manufacturer regarding the price increase and, if
the board determines that the price increase is not a result of the need for increased
manufacturing capacity or other effort to improve patient access during a public
health emergency, the board must establish an upper payment limit equal to the
drug's cost prior to the price increase.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB544,1
1Section 1
. 15.07 (3) (bm) 7. of the statutes is created to read:
AB544,3,32
15.07
(3) (bm) 7. The prescription drug affordability review board shall meet
3at least 4 times each year.
AB544,2
4Section 2
. 15.735 of the statutes is created to read:
AB544,3,7
515.735 Same; attached board. (1) There is created a prescription drug
6affordability review board attached to the office of the commissioner of insurance
7under s. 15.03. The board shall consist of the following members:
AB544,3,88
(a) The commissioner of insurance or his or her designee.
AB544,3,129
(b) Two members appointed for 4-year terms who represent the
10pharmaceutical drug industry, including pharmaceutical drug manufacturers and
11wholesalers. At least one of the members appointed under this paragraph shall be
12a licensed pharmacist.
AB544,3,1413
(c) Two members appointed for 4-year terms who represent the health
14insurance industry, including insurers and pharmacy benefit managers.
AB544,3,1715
(d) Two members appointed for 4-year terms who represent the health care
16industry, including hospitals, physicians, pharmacies, and pharmacists. At least one
17of the members appointed under this paragraph shall be a licensed practitioner.
AB544,3,1918
(e) Two members appointed for 4-year terms who represent the interests of the
19public.
AB544,4,3
1(2) A member appointed under sub. (1) may not be an employee of, a board
2member of, or a consultant to a drug manufacturer or trade association for drug
3manufacturers.
AB544,4,8
4(3) Any conflict of interest, including any financial or personal association, that
5has the potential to bias or has the appearance of biasing an individual's decision in
6matters related to the board or the conduct of the board's activities shall be
7considered and disclosed when appointing that individual to the board under sub.
8(1).
AB544,3
9Section 3
. Subchapter VI (title) of chapter 601 [precedes 601.78] of the
10statutes is created to read:
AB544,4,1312
SUBCHAPTER VI
13
Prescription drug
AB544,4,1414
affordability review board
AB544,4,15
15601.78 Definitions. In this subchapter:
AB544,4,17
16(1) “Biologic” means a drug that is produced or distributed in accordance with
17a biologics license application approved under
21 CFR 601.20.
AB544,4,19
18(2) “Biosimilar” means a drug that is produced or distributed in accordance
19with a biologics license application approved under
42 USC 262 (k) (3).
AB544,4,21
20(3) “Board” means the prescription drug affordability review board established
21under s. 15.735 (1).
AB544,4,24
22(4) “Brand name drug” means a drug that is produced or distributed in
23accordance with an original new drug application approved under
21 USC 355 (c),
24other than an authorized generic drug, as defined in
42 CFR 447.502.
AB544,5,2
1(5) “Drug product” means a brand name drug, a generic drug, a biologic, a
2biosimilar, or an over-the-counter drug.
AB544,5,6
3(6) “Financial benefit” includes an honoraria, fee, stock, the value of the stock
4holdings of a member of the board or any immediate family member, as defined in
5s. 97.605 (4) (a) 2., and any direct financial benefit deriving from the finding of a
6review conducted under s. 601.79.
AB544,5,7
7(7) “Generic drug” means any of the following:
