SB 494 — AN ACT CONCERNING PRESCRIPTION DRUG SHORTAGES, PRESCRIPTION DRUG REBATES AND PROHIBITED MANUFACTURER PRACTICES CONCERNING CERTAIN PRESCRIPTION DRUGS.

(1) Deny, restrict, prohibit, discriminate against or otherwise limit the acquisition of a 340B drug by, or delivery of a 340B drug to, a pharmacy that is under contract with, or otherwise authorized by, a covered entity to receive 340B drugs on behalf of the covered entity unless such receipt is prohibited under federal law;

or (2) Require a covered entity, or a pharmacy that is under contract with a covered entity, to submit any claims or utilization data as a condition for allowing the acquisition of a 340B drug by, or delivery of a 340B drug to, a covered entity, or a pharmacy that is under contract with a covered entity, unless the claims or utilization data sharing is required by the United States Department of Health and Human Services.

(b) (1) On and after July 1, 2026, if the Commissioner of Consumer Protection receives information and has a reasonable belief, after evaluating such information, that any manufacturer, or an agent or affiliate of such manufacturer, has acted in violation of any provision of this section or regulation adopted thereunder, such manufacturer, or an agent or affiliate of such manufacturer, shall be subject to a civil penalty of not more than fifty thousand dollars for each violation.

The commissioner shall issue a notice of violation and civil penalty and may issue such notice by first-class mail or personal service.

Such notice shall include:

(A) A reference to the section of the general statutes or regulationofConnecticutstateagenciesbelievedorallegedtohavebeen violated;

(B) a short and plain-language statement of the matters asserted or charged;

(C) a description of the activity to cease;

(D) a statement of the amount of the civil penalty or penalties that may be imposed;

(E) a statement concerning the right to a hearing;

and (F) a statement that such manufacturer, or an agent or affiliate of such manufacturer, may, not later than ten business days after receipt of such notice, make a request for a hearing on the matters asserted.

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483 (2) The manufacturer, or an agent or affiliate of such manufacturer, to whom such notice is provided pursuant to subparagraph (A) of subdivision (1) of this subsection may, not later than ten business days after receipt of such notice, make written application to the Department of Consumer Protection to request a hearing to demonstrate that such violation did not occur.

The failure to make a timely request for a hearing shall result in the issuance of a cease and desist order or imposition of a civil penalty by the department.

All hearings held under this subsection shall be conducted in accordance with the provisions for contested cases under chapter 54 of the general statutes.

(3) Following any hearing before the Department of Consumer Protection pursuant to subdivision (2) of this subsection, if the department finds, by a preponderance of the evidence, that any manufacturer, or an agent or affiliate of such manufacturer, violated or is violating any provision of this subsection, any regulation adopted thereunder or any order issued by the department, the department shall issue a final cease and desist order in addition to any civil penalty the department imposes.

(c) Nothing in this section shall be construed or applied to be in conflict with or less restrictive than:

(1) Applicable federal law and related regulations, including 21 USC 355-1, as amended from time to time;

or (2)Other lawsofthisstate totheextentsuchlawsare compatible with applicable federal law.

(d) The Commissioner of Consumer Protection shall adopt regulations in accordance with the provisions of chapter 54 of the general statutes to implement the provisions of this section.

2 July 1, 2026 New section Sec.sSB494 / File No.

3483 July8 1,sSB494 2026File 17b-491cNo. Statement of Purpose:

To483 setSec. term limits and administrative support for a prescription drug task force, require the Commissioner of Economic and Community Development to expand the Strategic Supply Chain Initiative to include efforts to prevent or mitigate prescription drug shortages and require the Commissioner of Social Services to negotiate more supplemental prescription drug rebates.

[Proposed3 deletionsJuly are1, enclosed2026 in17b-491c brackets.Sec.

Proposed4 additionsfrom arepassage indicatedNew by underline, except that when the entire text of a bill or resolution or a section ofSec. a bill or resolution is new, it is not underlined.] LCO No.

28535 6from passage New section Statement of 6Legislative Commissioners:

The title was changed, and in Section 4(4), the definition of "manufacturer" was rewritten for consistency with standard drafting conventions.

HS Joint Favorable Subst.

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483 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 27 $ FY 28 $ Treasurer, Debt Serv.

GF - Potential See Below See Below Cost Social Services, Dept.

GF - Potential See Below See Below Savings Consumer Protection, Dept.

GF - Cost 199,182 195,182 State Comptroller - Fringe GF - Cost 79,166 79,166 Benefits Resources of the General Fund GF - Potential See Below See Below Revenue Gain UConn Health Ctr.

Other Funds - See Below See Below Potential Savings Note:

GF=General Fund Municipal Impact:

None Explanation The bill makes various changes regarding prescription drugs resulting in the impacts described below.

Section 1 has no fiscal impact by modifying the membership of a task force to study emergency preparedness and mitigation strategies for prescription drug shortages.

Section 2 expands the Strategic Supply Chain Initiative program, which is funded by General Obligation (GO) bond funds, to include 1The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

The estimated active employee fringe benefit cost associated with most personnel changes is 41.82% of payroll in FY 27.

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483 efforts to prevent or mitigate prescription drug shortages.

Future General Fund debt service costs may be incurred sooner under the bill to the degree that it causes authorized GO bond funds to be expended more rapidly than they otherwise would have been.

To date, the State Bond Commission allocated $49.5 million in total bond funds to the Strategic Supply Chain Initiative program.

The bill does not change GO bond authorizations relevant to the program.

Section3 requiresthe Department ofSocialServices(DSS) to develop and implement a plan to increase the number of supplemental rebates for drugs on the preferred drug list or formulary by at least 20%.

To the extent DSS is able to achieve higher rebate levels, DSS will experience related pharmacy savings.

Sections 4 – 5 require the Department of Consumer Protection (DCP) to regulate the 340B marketplace resulting in a cost to the state.

DCP does not currently regulate this marketplace or have the expertise to do so and will have to hire two employees to meet the requirements of the bill.

DCP will need to hire one drug control agent and one staff attorney for a salary and other expenses cost of $199,182 in FY 27 and $195,182 in FY 28, along with associated fringe benefit costs of $79,166 per year.

These sections also create a civil penalty of $50,000 for every violation resulting in a potential revenue gain to the state to the extent that violations occur.

Sections 4 – 5 also result in a potential savings to UConn Health Center (UCHC) annually beginning in FY 27.

The sections restrict the ability of prescription drug manufacturers to limit the purchasing of 340Bdrugsby covered entities,which includesUCHC.Any savings will vary based on any increase in the purchase of 340B drugs that occurs due to the bill.

From 2024 to 2025, UCHC incurred approximately $8 million in unrealized savings due to 340B drug purchasing limits 2The State Bond Commission reallocated funding from the Manufacturing Assistance Act program towards the Strategic Supply Chain Initiative at the August 2025 and December 2025 meetings.

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483 imposed by prescription drug manufacturers, and which the bill restricts.

The Out Years The annualized ongoing fiscal impact identified above would continue into thefuture subject to employeewage increases,thenumber of violations, and inflation.

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483 OLR Bill Analysis sSB 494 AN ACT CONCERNING PRESCRIPTION DRUG SHORTAGES, PRESCRIPTION DRUG REBATES AND PROHIBITED MANUFACTURER PRACTICES CONCERNING CERTAIN PRESCRIPTION DRUGS.

SUMMARY This bill makes several changes in laws related to prescription drug prices and prescription drug shortages.

Existing law authorizes the Department of Social Services (DSS) to enter contracts for supplemental rebates for drugs on the department’s preferred drug list or formulary.

The bill requires DSS to develop and implement a plan, starting July 1, 2026, to increase the number of supplemental rebates by at least 20% and sets a related reporting requirement.

Existing law establishes an ongoing task force to study emergency preparedness and mitigation strategies for prescription drug shortages.

The bill adds the Human Services Committee chairpersons to the task force and makes them the task force’s chairpersons.

Among other things, it sets requirements for member terms and new deadlines to appoint members and meet.

The bill requires the Department of Economic and Community Development (DECD) to expandthe StrategicSupply Chain Initiative to include efforts to prevent or mitigate prescription drug shortages.

The bill also generally prohibitsdrug manufacturersfrom(1)limiting access to 340B drugs (see below) for pharmacies contracting with covered entities or (2) requiring pharmacies or covered entities to submit claims or utilizationdataasaconditionfor receiving 340Bdrugs.

It also establishes a hearing process and penalties for violators.

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483 EFFECTIVE DATE:

Upon passage, except provisions on the Strategic Supply Chain Initiative and supplemental rebates are effective July 1, 2026.

§ 3 — SUPPLEMENTAL REBATES The federal Medicaid Drug Rebate Program requires a drug manufacturer to enter into a rebate agreement in exchange for Medicaid coverage ofmost ofthemanufacturer’sdrugs.Statesmay negotiate with drug manufacturers for supplemental rebates in addition to federal rebates.

Starting July 1, 2026, the bill requires DSS to develop and implement a plan to increase the number of supplemental rebates by at least 20%.

It also requires DSS to report to the Human Services Committee annually by January 15 on the number of (1) prescription rebates received the previous calendar year and any increase or decrease from the prior calendar year and (2) supplemental rebates negotiated by DSS and any increase or decrease from the prior calendar year.

§ 1 — TASK FORCE ON PRESCRIPTION DRUG SHORTAGES Under current law, the House speaker and Senate president pro tempore select the taskforce’s chairpersons.

The bill adds the Human Services Committee chairpersons to the task force and makes them the taskforce’s chairpersons.

It changes responsibility for administrative staffing for the task force from the General Law Committee to the Human Services Committee.

Existing law requires legislative leaders to appoint eight task force members and allows the task force’s chairpersons to appoint more members as they find necessary (in addition to certain ex-officio members).

Under the bill, these appointed members have two-year terms, but subsequent appointments are made on a staggered basis, as follows:

1.

two-year terms for members appointed by the House Speaker, Senate president pro tempore, House majority leader, and the Human Services Committee chairpersons;

and sSB494 / File No.

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three-year terms for members appointed by the Senate majority leader, House minority leader, and Senate minority leader.

Under the bill, all initial appointments must be made by August 1, 2026, and thetask force must hold its first meeting by September 1, 2026.

Its annual report is due January 1, 2027, to the General Law, Human Services, and Insurance and Real Estate, and Public Health committees.

§ 2 — STRATEGIC SUPPLY CHAIN INITIATIVE ThebillrequirestheDECDcommissionertoexpandthedepartment’s StrategicSupplyChainInitiativetoincludeeffortstopreventormitigate prescription drug shortages, including task force recommendations (see above).

Under the bill, this initiative is a DECD-administered program to help state-based companies increase their production capacity to win new business and attract out-of-state and international supply chain operations.

§§ 4 & 5 — 340B PROGRAM Section 340B of the federal Public Health Service Act (the 340B Drug Pricing Program) requires drug manufacturers participating in Medicaid to sell certain outpatient prescription drugs at discounted prices to health care organizations that care for uninsured and low- income patients.

Pharmacies may contract with 340B-participating healthcare organizations to also purchase reduced-price outpatient drugs.

The bill prohibits drug manufacturers (including biologics manufacturers), and their agents or affiliates, from directly or indirectly taking any of the following actions:

1.

denying or limiting access to 340B drugs for a pharmacy contracting or otherwise working with a covered entity (see below) to obtain them on the entity’s behalf, unless the pharmacy’s receipt of a drug is federally prohibited, or sSB494 / File No.

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requiring a covered entity, or pharmacy contracted with a covered entity, to submit claims or utilization data as a condition for acquiring a 340B drug, unless the claims or data sharing is federally required.

For these restrictions, “covered entities” are the UConn Health Center, federally qualified health centers, family planning clinics, and Ryan White clinics (clinics that receive specified HIV and AIDS-related federal funding).

(Federal law allows other organizations to participate in the 340B program, such as hospitals that serve a disproportionate number of low-income patients.) Also, under these provisions, 340B drugs are those that a covered entity (1) purchases under the program and that are subject to the program’s pricing requirements or (2) would purchase except for the prohibited conduct.

The bill subjects violators to civil penalties (see below).

It also requires the Department of Consumer Protection (DCP) commissioner to adopt implementing regulations.

Thebillspecifiesthatits340Bprovisionsmust notbeappliedina way that conflicts with, or is less restrictive than, applicable state and federal laws (including the federal law on drug risk evaluation and mitigation strategies (REMSs);

see BACKGROUND).

Violations Beginning July 1, 2026, the bill subjects drug manufacturers (or their agents or affiliates) to a civil penalty of up to $50,000 per violation if the DCP commissioner has a reasonable belief, based on received information, that they have violated these provisions or regulations.

The commissioner must issue the violation notice by first-class mail or personal service, and it must include:

1.

a reference to the law or regulation that has allegedly been violated;

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483 2.

a short and plain language statement of the matter;

3.

a description of the activity to cease;

4.

the penalty amount that may be imposed;

and 5.

an explanation of the right to request, in writing to DCP, a hearing within 10 business days after receiving the notice.

Under the bill, DCP must hold requested hearings as contested case hearings under the Uniform Administrative Procedure Act (UAPA).

If after a hearing, DCP finds by a preponderance of the evidence that there was a violation or that the entity violated any DCP order, the department must issue a final cease and desist order in addition to any civil penalty imposed.

If the manufacturer, agent, or affiliate does not timely request a hearing, DCP must issue a cease and desist order or impose a civil penalty.

BACKGROUND REMS Federal law authorizes the FDA to require a drug safety program (called“REMS”)for certainprescriptionmedicationswithserioussafety concerns to ensure that the medications are used safely and the risks of serious or life-threatening side effects are minimized for patients, pharmacies, and providers (21 U.S.C.

§ 355-1).

COMMITTEE ACTION Human Services Committee Joint Favorable Substitute Yea 15 Nay 8 (03/19/2026) sSB494 / File No.

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