SB 8 — AN ACT CONCERNING DRUG AFFORDABILITY.

3098 committeesand ofrecommendations thefor Generalexpanding Assemblythe havingprogram cognizanceto ofother mattersstate-funded relatingtoappropriationsandthebudgetsofstateagencies,generallaw,and humanprivately servicesfunded andhealth publiccare health.programs.

Such report shall describe the operations of the program established pursuant to section 2 of this act and recommendations for expanding the program to other state-funded and privately funded health care programs.

(d) Each member of the board shall serve a term of three years, except sSB8as /to Filethe No.terms of the members who are first appointed to the board.

309Two such members shall serve an initial term of three years, two such members shall serve an initial term of two years and one such member LCO 10 sSB8of File29 Substitute Bill No.

3098 asshallserve toaninitialtermofoneyear,to thebedeterminedby termstheGovernor. of the members who are first appointed to the board.

Two such members shall serve an initial term of three years, two such members shall serve an initial term of two years and one such member shallserve aninitialtermofoneyear,to bedeterminedby theGovernor.

(1) Strategies for identifying and eliminating pricing or business practices that do not support or enhance innovation in drug development, (2) price trends and affordability strategies for any drug identified pursuant to subsection (b) or (c) of section 13 of this act, (3) any recommendations the board mayhave for legislationneeded to make prescription drug products more affordable in the state while supporting and enhancing innovation in drug development, (4) purchasing strategies, cost effectiveness evaluations and the development of new technologies and drugs that increase affordability, and (5) a summary and evaluation of state prescription drug advisory sSB8board /activities Fileand No.recommendations.

309(h) Members of the board may engage in private employment, or in LCO 11 sSB8of File29 Substitute Bill No.

3098 boarda activitiesprofession or business, subject to any applicable laws, rules and recommendations.regulations of the state regarding official ethics or conflict of interest.

(h) Members of the board may engage in private employment, or in a profession or business, subject to any applicable laws, rules and regulations of the state regarding official ethics or conflict of interest.

(3) Identify states with innovative programs to lower prescription drug costs and, if approved by the board, enter into memoranda of sSB8understanding /with Filesuch states to aid in the collection of transparency data for prescription drug products or any other information needed to LCO 12 of 29 Substitute Bill No.

3098 12establish sSB8similar Fileprograms No.in this state;

309 understanding with such states to aid in the collection of transparency data for prescription drug products or any other information needed to establish similar programs in this state;

sSB8(5) /Two Fileappointed by the minority leader of the Senate, who shall be (A) a representative of generic drug corporations, and (B) a LCO 13 of 29 Substitute Bill No.

3098 13representative sSB8of Filean No.academic institution with expertise in health care costs;

309 (5) Two appointed by the minority leader of the Senate, who shall be (A) a representative of generic drug corporations, and (B) a representative of an academic institution with expertise in health care costs;

(e) The administrative staff of the joint standing committee of the sSB8General /Assembly Filehaving No.cognizance of matters relating to insurance shall serve as administrative staff of the council.

309LCO 14 sSB8of File29 Substitute Bill No.

3098 General(f) AssemblyNot havinglater cognizancethan ofSeptember matters1, relating2025, toand insuranceannually thereafter, the council shall servesubmit asa administrativereport staffto the board, in accordance with the provisions of section 11-4a of the council.general statutes, on its recommendations concerning prescription drug prices.

(f) Not later than September 1, 2025, and annually thereafter, the council shall submit a report to the board, in accordance with the provisions of section 11-4a of the general statutes, on its recommendations concerning prescription drug prices.

(6) "Generic drug" means (A) a prescription drug product that is marketed or distributed in accordance with an abbreviated new drug application approved under 21 USC 355, as amended from time to time, (B) an authorized generic drug as defined in 42 CFR 447.502, as sSB8amended /from Filetime to time, or (C) a drug that entered the market before calendar year 1962 that was not originally marketed under a new LCO 15 of 29 Substitute Bill No.

3098 15prescription sSB8drug Fileproduct No.application;

309 amended from time to time, or (C) a drug that entered the market before calendar year 1962 that was not originally marketed under a new prescription drug product application;

(1) Brand-name drugs that have a launch wholesale acquisition cost sSB8of /thirty Filethousand No.dollars or more per year or course of treatment;

309LCO 16 sSB8of File29 Substitute Bill No.

3098 (2) Brand-name drugs that have a wholesale acquisition cost increase of thirtythree thousand dollars or more perin yearany ortwelve–month courseperiod; of treatment;

(2) Brand-name drugs that have a wholesale acquisition cost increase of three thousand dollars or more in any twelve–month period;

(d) After identifying prescription drug products as required by subsections (b) and (c) of this section, the board may conduct, within available appropriations, a review for any identified prescription drug product or pricing practice if, after (1) seeking input from relevant stakeholders, and (2) considering the average patient cost share of the sSB8prescription /drug Fileproduct, the board determines such review is in the LCO 17 of 29 Substitute Bill No.

3098 17interest sSB8of Fileconsumers. No.

309 prescription drug product, the board determines such review is in the interest of consumers.

(3) The total amount of the price concession, discount or rebate the manufacturer provides to each pharmacy benefits manager operating in the state for the prescription drug product under review, as reported by manufacturers and pharmacy benefits managers, expressed as a sSB8percentage /of Filethe No.wholesale acquisition costs;

309LCO 18 sSB8of File29 Substitute Bill No.

3098 percentage(4) ofThe theprice wholesaleat acquisitionwhich costs;therapeutic alternatives have been sold in the state;

(4) The price at which therapeutic alternatives have been sold in the state;

In its recommendations, the board may utilize (A) upper payment limits set sSB8by /similar Fileboards in other states, provided the board finds that the other LCO 19 of 29 Substitute Bill No.

3098 19entity's sSB8price Filejustification No.process is at least as rigorous as the process set forth in state law, (B) upper payment limits set by any other state or federal entity, provided the board finds that the other entity's price justification process is at least as rigorous as the process set forth in state law, and (C) the Medicare maximum fair price for a prescription drug.

309 by similar boards in other states, provided the board finds that the other entity's price justification process is at least as rigorous as the process set forth in state law, (B) upper payment limits set by any other state or federal entity, provided the board finds that the other entity's price justification process is at least as rigorous as the process set forth in state law, and (C) the Medicare maximum fair price for a prescription drug.

(NEW)(Effective July 1,2025)Anysavingsgeneratedby a state sSB8LCO /20 Fileof 29 Substitute Bill No.

3098 20entity, sSB8health Filebenefit No.plan, or participating ERISA plan that are attributable to the implementation of an upper payment limit established by the Prescription Drug Affordability Board shall be used to reduce health care costs to consumers, prioritizing the reduction of out-of-pocket costs for prescription drugs.

309 entity, health benefit plan, or participating ERISA plan that are attributable to the implementation of an upper payment limit established by the Prescription Drug Affordability Board shall be used to reduce health care costs to consumers, prioritizing the reduction of out-of-pocket costs for prescription drugs.

(b) The board shall assess a penalty not to exceed five hundred thousand dollars if the board determines that a manufacturer failed to sSB8LCO /21 Fileof 29 Substitute Bill No.

3098 21provide sSB8the Filenotice No.required by subsection (a) of this section before withdrawing from sale or distribution within the state a prescription drug for which the board has established an upper payment limit as determined in subsection (g) of section 13 of this act.

309 provide the notice required by subsection (a) of this section before withdrawing from sale or distribution within the state a prescription drug for which the board has established an upper payment limit as determined in subsection (g) of section 13 of this act.

and (6) "Wholesale acquisition cost" means the price of a medication set sSB8LCO /22 Fileof 29 Substitute Bill No.

3098 22by sSB8a Filepharmaceutical No.manufacturer in the United States when selling to a wholesaler.

309 by a pharmaceutical manufacturer in the United States when selling to a wholesaler.

sSB8LCO /23 Fileof 29 Substitute Bill No.

3098 23(1) sSB8"Eligible Filedrug" No.means an injectable drug product approved under Section 505(j) or 505(b)(2) of the federal Food, Drug and Cosmetic Act, as amended from time to time, that is on the drug shortage list, or has been on such list during the prior five-year period, established under Section 506E of the federal Food, Drug and Cosmetic Act, 21 USC 356e, as amended from time to time, or which has otherwise been identified as being at risk of shortage;

309 (1) "Eligible drug" means an injectable drug product approved under Section 505(j) or 505(b)(2) of the federal Food, Drug and Cosmetic Act, as amended from time to time, that is on the drug shortage list, or has been on such list during the prior five-year period, established under Section 506E of the federal Food, Drug and Cosmetic Act, 21 USC 356e, as amended from time to time, or which has otherwise been identified as being at risk of shortage;

and (4) Participate, in accordance with federal law, in the program administered under Section 340B of the Public Health Service Act, 42 sSB8LCO /24 Fileof 29 Substitute Bill No.

3098 24USC sSB8256b, Fileas No.amended from time to time.

309 USC 256b, as amended from time to time.

(4) "Manufacturer" has the same meaning as provided in section 21a- 70LCO 25 of the29 generalSubstitute statutes,Bill except that such definition shall include sSB8 / File No.

3098 2570 sSB8of Filethe No.general statutes, except that such definition shall include manufacturers of biologics;

309 manufacturers of biologics;

(b) (1) On and after July 1, 2024, if the executive director of the Office ofHealth Strategyreceivesinformationandhasareasonablebelief,after evaluating such information, that any manufacturer, third-party logisticsLCO provider,26 wholesaler or distributor, or an agent or affiliate of sSB829 /Substitute FileBill No.

3098 26logistics sSB8provider, Filewholesaler No.or distributor, or an agent or affiliate of such manufacturer, third-party logistics provider, wholesaler or distributor, has acted in violationof any provision of this section, or rule or regulation adopted thereunder, such manufacturer, third-party logistics provider, wholesaler or distributor, or an agent or affiliate of such manufacturer, third-party logistics provider, wholesaler or distributor, shall be subject to a civil penalty of up to fifty thousand dollars.

309 such manufacturer, third-party logistics provider, wholesaler or distributor, has acted in violationof any provision of this section, or rule or regulation adopted thereunder, such manufacturer, third-party logistics provider, wholesaler or distributor, or an agent or affiliate of such manufacturer, third-party logistics provider, wholesaler or distributor, shall be subject to a civil penalty of up to fifty thousand dollars.

(3) Following any hearing before the Office of Health Strategy pursuant to subdivision (2) of this subsection, if the office finds, by a preponderance of the evidence, that any manufacturer, third-party logisticsLCO provider,27 wholesaler or distributor, or an agent or affiliate of sSB829 /Substitute FileBill No.

3098 27logistics sSB8provider, Filewholesaler No.or distributor, or an agent or affiliate of such manufacturer, third-party logistics provider, wholesaler or distributor, violated or is violating any provision of this subsection, any rule or regulation adopted thereunder or any order issued by the office, theoffice shall issuea finalcease and desist order inadditionto any civil penalty the office imposes.

309 such manufacturer, third-party logistics provider, wholesaler or distributor, violated or is violating any provision of this subsection, any rule or regulation adopted thereunder or any order issued by the office, theoffice shall issuea finalcease and desist order inadditionto any civil penalty the office imposes.

14 July 1, 2025 New section July 1, 2025 Sec.

15 July 1, 2025 New section Sec.

20 July 1, 2024 New section Sec.LCO 28 of 29 Substitute Bill No.

218 from passage New section from passage Sec.

2221 from passage New section sSB8Sec. / File No.

30922 28from sSB8passage FileNew No.section HS Joint Favorable Subst.

309JUD HS Joint Favorable Subst.LCO 29 of 29

sSB8 / File No.

309 29 sSB8 File No.

309 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:

See Below Municipal Impact:

See Below Explanation The bill makes changes to address prescription drug affordability that results in various impacts described below.

Sections 1-9 create a Canadian Prescription Drug Importation Program that results in costs to the Office of Health Strategy (OHS) and the Department of Consumer Protection (DCP).

Section 2 requires OHS to submit a request for approval of the importation program to the federal Food and Drug Administration (FDA).

OHS will incur a one-time cost of $125,000 in FY 25 to hire a consultant to assist themin preparing aplan.Iftheprogramisapproved by the FDA, the bill will result in potential costs to a variety of state agencies.

OHS will incur costs of $336,000 in salary and fringe benefits beginning in FY 26 to hire a Staff Attorney 2 and a planning analyst to fulfill the requirements outlined in Sections 5&7, which mandate OHS to ensure suppliers and distributors comply with the bill's provisions.

The attorney and planning analyst will also assist the executive director with adopting regulations required by Section 8.

Section 9 requires OHS to submit an annual report describing the operations of the program.

OHS will incur costs of $327,000 in salary and fringe benefits beginning in FY 26 to hire a lead planning analyst sSB8 / File No.

309 30 sSB8 File No.

309 and a planning analyst to create the annual report.

DCP will see a significant increase in regulatory work, and the agency may have to hire two additional employees for a salary and other expenses cost of $203,000, along with associated fringe benefits costs of $82,000, all beginning in FY 26.

Sections 10-13 of the bill establish a Prescription Drug Affordability Board (PDAB) and lay out its administrative responsibilities and capabilities.

OHS will incur costs of $527,000 in salary and fringe benefits beginning in FY 26 to hire three new staff to directly support the board in its activities:

a planning specialist, a lead planning analyst, and a planning analyst.

Sections 14-15 establish an upper payment limit for state entities, health benefit plans, and participating ERISA plans to purchase drugs.

This results in a savings to state entities beginning in FY 25.

Any savings will be used to reduce out-of-pocket costs to consumers, resulting in no fiscal impact to the state or municipalities.

The plans will also submit a report to the PDAB and OHS describing the savings which will not result in a fiscal impact.

Sections17-19resultinapotentialcosttofully insuredmunicipalities that currently impose cost sharing on insulin products to the extent cost sharing is imposed.

Additional costs to municipalities can be incurred if they do not offer insulin products at the lowest wholesale acquisition cost.

There is no fiscal impact to the state to impose these provisions as insulin products are currently covered under the state employee health plan with no cost sharing.

Section 20 requires any hospital or drug purchasing agency to have a drug shortage prevention strategy covering at least 40 eligible drugs 1DCP is the state regulatory agency responsible for the pharmaceutical industry.

DCP is tasked with drug tracking, investigation, and enforcement of this marketplace.

The agency will be integrally involved in how the drug supply chains are managed and 2nforced as well as ensuring compliance with the FDA.

The employees include one drug control agent and one staff attorney.

sSB8 / File No.

309 31 sSB8 File No.

309 corresponding to at least one-third of the hospital or agency’s expected use of each drug.

This includes the Departments of Social Services, Correction, Mental Health and Addiction Services as well as UCONN Health Center.

OHS will incur costs of $145,000 in salary and fringe benefits beginning in FY 26 to hire a planning analyst that will develop a comprehensive report on compliance of hospitals, drug purchasing agencies, and their contractors that will be sent to the legislature annually beginning on April 1, 2025.

Sections 21 and 22 regarding 340B entities result in an annual significant positive financial impact to the University of Connecticut Health Center beginning in FY 25.

The health center has multiple 340B covered entities, including John Dempsey Hospital, and has not been fully benefiting from the provisions of the 340B program due to manufacturer and pharmacy benefits manager (PBM) practices.

The health center estimates that the foregone savings and revenue gain due to these practices has reached approximately $9 million annually and will continue to increase.

It is anticipated that the bill will reduce or eliminate the practices it prohibits, and consequently result in greater 340B savings and revenue gain to UConn Health Center.

Section 22 also makes OHS responsible for monitoring compliance by drug manufactures working with covered entities as part of 340b.

OHS will incur costs of $146,000 beginning in FY 26 for a staff attorney and related fringe benefits costs to assist in conducting investigations and hearings for violating the provisions of the section.

There is a potential revenue gain to the state from this section to the extent OHS renders civil penalties of up to $50,000 on applicable entities.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation and the number of civil penalties administered by OHS.

sSB8 / File No.

309 32 sSB8 File No.

309 OLR Bill Analysis sSB 8 AN ACT CONCERNING DRUG AFFORDABILITY.

TABLE OF CONTENTS:

SUMMARY §§ 1-9 — CANADIAN PRESCRIPTION DRUG IMPORTATION PROGRAM Requires OHS to consult with DCP, DPH, and DSS to establish a program to import from Canada prescription drugs with potential cost savings for Medicaid;

specifies program participation requirements for suppliers and wholesalers;

requires OHS to report annually on the program § 10 — PRESCRIPTION DRUG AFFORDABILITY BOARD Creates the Prescription Drug Affordability Board to advise OHS on prescription drug affordability;

requires the board, beginning by December 31, 2025, to report annually to certain legislative committees on drug affordability § 11 — PRESCRIPTION DRUG AFFORDABILITY STAKEHOLDER COUNCIL Establishes the Prescription Drug Affordability Stakeholder Council to advise PDAB;

requires the council to report on prescription drug prices to the board annually beginning by September 1, 2025 §§ 12 & 13 — PRESCRIPTION DRUG PRICING ASSESSMENT Requires PDAB to (1) identify drugs with high inflation or affordability challenges and (2) recommend upper payment limits for drugs with affordability challenges to OHS;

allows PDAB to review drug prices and pricing practices § 14 — PAYMENT LIMIT VIOLATIONS Prohibits state entities, health benefit plans, and participating ERISA plans from purchasing drugs at a price higher than its upper payment limit;

prohibits pharmacies from distributing to certain consumers drugs purchased at a price higher than its upper payment limit § 15 — COST SAVINGS Requires state entities, health benefit plans, and participating ERISA plans to (1) use any savings generated by an upper payment limit to lower consumers’ costs and (2) annually report to PDAB and OHS on savings achieved;

requires OHS to annually report on the savings to certain legislative committees § 16 — DRUG WITHDRAWAL Requires manufacturers to (1) provide six-months’ notice before withdrawing from sale a drug with an established upper payment limit and (2) notify PDAB within 30 days if it sSB8 / File No.

309 33 sSB8 File No.

309 expects a drug shortage;

requires PDAB to fine a manufacturer up to $500,000 for failure to give notice before withdrawing a drug §§ 17-19 — INSULIN Requires state entities and health benefit plans to cover certain insulin products at the lowest wholesale acquisition cost in a preferred tier with no copayment or out-of-pocket cost;

allows plans to cover and offer more than one insulin product § 20 — DRUG SHORTAGE PREVENTION Requires hospitals and drug purchasing agencies to (1) have drug shortage prevention strategies covering at least one-third of expected use for at least 40 drugs and (2) include in any long-term drug purchasing contract certain drug shortage mitigation strategies §§ 21 & 22 — 340B DRUGS Prohibits drug manufacturers, wholesalers, and distributors from (1) limiting a pharmacy’s access to 340B drugs and (2) requiring health care organizations or pharmacies to submit claims or utilization data as a condition for receiving 340B drugs;

establishes a hearing process and penalties for violators SUMMARY Thisbilltakesvariousstepstoaddressprescriptiondrugaffordability and access for Connecticut consumers, including:

1.

requiring the Office of Health Strategy (OHS) to establish the Canadian Prescription Drug Importation Program to import from Canada safe and effective drugs with potential cost savings for Connecticut’s Medicaid and Children’s Health Insurance Program (CHIP) programs;

2.

establishing the Prescription Drug Affordability Board (PDAB) and Prescription Drug Affordability Stakeholder Council to review and make recommendations on prescription drugs’ costs and affordability;

3.

allowing PDAB to reviewand set upper payment limits for drugs with high inflation or affordability challenges;

4.

prohibiting state entities and health insurance plans from purchasing, and pharmacies from distributing to certain consumers, drugs purchased at a price higher than its upper payment limit;

sSB8 / File No.

309 34 sSB8 File No.

309 5.

requiring state entities and health insurance plans to use cost savings attributable to an upper payment limit to reduce consumers’ health care costs;

6.

prohibiting manufacturers from withdrawing from distribution in Connecticut a drug with an established upper payment limit without first notifying the state and contracted purchasers;

7.

requiring state entities and health insurance plans to cover, in a preferred tier and without copayment or out-of-pocket costs, insulin products at the lowest wholesale acquisition cost;

8.

requiring Connecticut hospitals and drug purchasing agencies to have drug shortage prevention strategies that cover at least one- third of the expected use of at least 40 drugs;

and 9.

prohibiting drug manufacturers, wholesalers, and distributors from limiting, or requiring claims and utilization data as a condition of, a pharmacy or health care organization’s access to drugs under the federal 340B drug program.

EFFECTIVE DATE:

Various;

see below.

§§ 1-9 — CANADIAN PRESCRIPTION DRUG IMPORTATION PROGRAM Requires OHS to consult with DCP, DPH, and DSS to establish a program to import from Canada prescription drugs with potential cost savings for Medicaid;

specifies program participation requirements for suppliers and wholesalers;

requires OHS to report annually on the program The bill requires the OHS executive director, in consultation with the Department of Consumer Protection (DCP), Department of Public Health (DPH), and Department of Social Services (DSS) commissioners, to establish the “Canadian Prescription Drug Importation Program” to import from Canada safe and effective prescription drugs with the highest potential cost savings to the state’s medical assistance program (i.e., Medicaid and CHIP).

EFFECTIVE DATE:

July 1, 2024 sSB8 / File No.

309 35 sSB8 File No.

309 Application for Federal Approval (§ 2) By January 1, 2025, the OHS executive director must submit a request to the federal Food and Drug Administration (FDA) for approval of the importation program.

(Under federal law, drug importation programs require federal approval.) The request must, at least:

1.

describe the state’s plans for operating the program, 2.

demonstrate that the prescription drugs imported under the program will (a) meet all applicable federal and state safety and effectiveness standards and (b) comply with all federal tracing procedures, and 3.

disclose the program’s cost.

IftheFDAapprovestherequest,theOHSexecutivedirectorandDCP and DSS commissioners must:

1.

notify the DPH commissioner and the Appropriations, General Law, Human Services, and Public Health committees that the request was approved and 2.

withtheDPHcommissioner,beginoperatingtheprogramwithin days after the approval date.

The bill prohibits OHS from operating the importation program without federal approval.

Importation (§§ 3 & 4) Under the bill, a participating wholesaler (i.e., a wholesaler designated by DCP to distribute prescription drugs imported from Canada through the program) may import and distribute drugs if they:

1.

meet FDA safety, effectiveness, misbranding, and adulteration standards and 2.

are not (a) controlled substances, (b) biologics, (c) infused, (d) sSB8 / File No.

309 36 sSB8 File No.

309 intravenously injected, (e) inhaled during surgery, or (f) parenteral drugs that the federal Health and Human Services secretary determines pose a public health threat.

Wholesalers are also prohibited from importing prescription drugs if doing so violates federal patent laws.

Wholesalers may import and distribute prescription drugs to a pharmacy or institutional pharmacy for the medical assistance program or to a DPH-registered laboratory for analytical testing.

Track-and-Trace (§ 5) Under the bill, the OHS executive director must require Canadian suppliers and participating wholesalers to comply with all applicable track-and-trace requirements (e.g., document the manufacturer, supply, and distribution chain) and prohibits them from distributing, dispensing, or selling any imported drugs outside of Connecticut.

Under the bill, the suppliers and wholesalers must make track-and- trace recordsavailable to theexecutive director within48hoursafter her request.

Safety (§ 6) Under the bill, participating wholesalers must ensure the safety and quality of all imported drugs.

This includes:

1.

for each initial shipment of imported drugs, having a laboratory test a statistically valid sample size for each batch of each drug in the shipment for authenticity and degradation consistent with federal requirements and 2.

for subsequent shipments, test a statistically valid sample for authenticity and degradation.

Wholesalers must also:

1.

certify that each imported drug is approved for marketing in the United States, is not adulterated or misbranded, and meets sSB8 / File No.

309 37 sSB8 File No.

309 federal labeling requirements;

2.

maintain laboratory records, including data from all tests necessary to ensure the drug complies with the bill’s requirements;

and 3.

maintain documentation that the testing required by the bill was done at a laboratory in compliance with federal and state laws and regulations.

The bill requires wholesalers to maintain the records required under the bill for at least three years from the date they are submitted, as noted below.

Wholesaler Records (§ 6) The bill requires each wholesaler to maintain for each imported drug:

1.

the name and quantity of the drug’s active ingredient;

2.

a description of the drug’s dosage form;

3.

the quantity of and date on which the wholesaler received the drug, and the price it paid;

4.

the drug’s origin point and destination;

5.

a report for any drug that failed laboratory testing;

and 6.

any other information and documentation the OHS executive director requires for the protection of public health.

This information must be submitted to OHS upon the executive director’s request.

Supplier Records (§ 6) ThebillrequireseachparticipatingCanadiansuppliertomaintainthe following information for each exported drug:

1.

the drug’s original source, including the manufacturer’s name, sSB8 / File No.

309 38 sSB8 File No.

309 date and location it was manufactured, and shipment date and quantity;

2.

the quantity of each lot of drug originally received and its source;

3.

the manufacturer-assigned lot or control number and batch number;

and 4.

any other information and documentation the OHS executive director, in consultation with the DCP, DPH, and DSS commissioners, requires for the protection of public health.

This information must be submitted to the OHS executive director and the DCP commissioner upon request.

Enforcement (§ 7) The bill requires the OHS executive director to issue a written order suspending the drug’s import and distribution, or suspending all importation and distribution of drugs by a wholesaler or Canadian supplier, if she discovers the import or distribution of the drug or the wholesaler or supplier violates any of the bill’s provisions or any other applicable state or federal law or regulation.

She must also issue a written order requiring the recall or seizure of any imported drug that has been misbranded or identified as adulterated.

If the executive director issues an order against a wholesaler or supplier, she must notify the wholesaler or supplier (1) of the order, along with its legal and factual basis, and (2) that they may make a written request for a hearing within 30 days after the notice date.

If the executive director receives a timely request for a hearing, she must convene it as a contested case under the Uniform Administrative Procedure Act (UAPA) within 30 days of receiving the request, and must issue a final decision vacating, modifying, or affirming the order within 60 days after the request.

Any supplier or wholesaler aggrieved by a final decision may appeal to Superior Court according to existing sSB8 / File No.

309 39 sSB8 File No.

309 UAPA provisions.

Regulations (§ 8) The bill authorizes the OHS executive director, in consultation with the DCP, DPH, and DSS commissioners, to adopt regulations to implement the drug importation program.

Reporting (§ 9) Starting no later than 180 days after the program begins, the bill requires the OHS executive director to annually submit a report to the Appropriations, General Law, Human Services, and Public Health committees describing the importation program’s operations and recommendations for expanding the program to other state-funded and privately funded health care programs.

§ 10 — PRESCRIPTION DRUG AFFORDABILITY BOARD Creates the Prescription Drug Affordability Board to advise OHS on prescription drug affordability;

requires the board, beginning by December 31, 2025, to report annually to certain legislative committees on drug affordability The bill establishes PDAB within OHS for administrative purposes to advise the OHS executive director on decisions regarding prescription drug affordability.

Specifically, the board must:

1.

explore strategies to reduce out-of-pocket drug costs for consumers while supporting biotechnology innovations and scientific discovery, 2.

identify opportunities for consumer savings by studying the prescription drug supply chain and pharmaceutical pricing strategies, 3.

monitor prescription drug prices in Connecticut, 4.

promote innovative strategies for the use of more affordable drugs, 5.

consider recommendations from the stakeholder council established by this bill (see § 11), and sSB8 / File No.

309 40 sSB8 File No.

309 6.

recommend drug cost affordability tool options to the OHS executive director.

To carry out its duties, the bill authorizes PDAB to do the following:

1.

collect and review (a) publicly available information and (b) information available via private subscriptions about various health care organizations’ prescriptiondrug pricing andbusiness practices, including the pharmacy benefit managers’ annual report required by state law;

2.

identify innovative strategies, including importing prescription drugs from Canada or other foreign jurisdictions, to lower prescription drug costs for consumers;

3.

identify states with innovative programs to lower prescription drug costs, and, if approved by the board, enter into memoranda of understanding (MOU) with these states to collect data and information to establish similar programs in Connecticut;

and 4.

receive any aid or contributions from any source, as long as it is not a conflict of interest, to use to carry out its purposes.

EFFECTIVE DATE:

July 1, 2024 Membership Under the bill, PDAB is comprised of five gubernatorial appointees who must have an (1) advance degree and (2) experience or expertise in health care economics, health services research, pharmacoeconomics, pharmacology, or clinical medicine.

At least one member must have experience in consumer advocacy and health equity.

The governor, with approval from either legislative chamber, must make initial board appointments by January 1, 2025.

The governor must also select the board’s chairperson from among its members.

Generally, board members will serve three-year terms, except initial appointees’ terms will expire as follows:

sSB8 / File No.

309 41 sSB8 File No.

309 1.

two members will serve three-year terms, 2.

two members will serve two-year terms, and 3.

one member will serve a one-year term.

The bill allows the governor to assign these term limits among initial board members.

Under the bill, the governor may also, without review, remove any board member for malfeasance, failure to regularly attend meetings, or any reason that makes the member incapable of fulfilling PDAB duties.

The governor must fill any vacancies, and appointments occurring other than by term expiration are for the unexpired term balance.

The bill allows members to be privately employed, subject to any applicable state ethics rules, but if a member discovers a conflict of interest (i.e., a financial or personal association that may cause bias or a financial benefit related to the board’s work), he or she must report it at the next board meeting.

Meetings The bill requires the chairperson to schedule and hold the board’s first meeting by February 1, 2025, and the board must meet at least four times annually.

A majority of members constitutes a quorum for conducting business, and any determination the board makes must have majority support.

Reporting Requirement The bill requires PDAB, beginning by December 31, 2025, to annually report to the Aging, General Law, Human Services, Insurance and Real Estate, and Public Health committees on the following:

1.

strategies to identify and eliminate pricing or business practices that do not support drug development innovation;

2.

price trends and affordability strategies for specific drugs identified to have recent high-cost increases (see § 13);

sSB8 / File No.

309 42 sSB8 File No.

309 3.

recommendations for legislation to make prescription drugs more affordable while enhancing drug development innovation;

4.

purchasing strategies, cost effectiveness evaluations, and new technology or drug developmentsthat increase affordability;and 5.

a summary and evaluation of the board’s activities and recommendations.

§ 11 — PRESCRIPTION DRUG AFFORDABILITY STAKEHOLDER COUNCIL Establishes the Prescription Drug Affordability Stakeholder Council to advise PDAB;

requires the council to report on prescription drug prices to the board annually beginning by September 1, 2025 The bill establishes the 21-member Prescription Drug Affordability Stakeholder Council to advise PDAB on decisions about prescription drug affordability.

Beginning by September 1, 2025, the council must annually report its recommendations on prescription drug prices to PDAB.

Additionally, the council must give recommendations to the board at its request.

The bill designates the Insurance and Real Estate Committee’s administrative staff as the council’s administrative staff.

The council must hold its first meeting by August 30, 2024 (i.e., within 60 days after this section’s effective date).

EFFECTIVE DATE:

July 1, 2024 Membership and Appointments Under the bill, the council has seven ex officio members and the following 14 appointed members:

1.

three members appointed by the House speaker, including a representative from a statewide advocacy organization for (a) a health care coalition, (b) elderly people, and (c) diverse communities;

2.

three members appointed by the Senate president pro tempore, including a (a) labor union representative, (b) health services sSB8 / File No.

309 43 sSB8 File No.

309 researcher, and (c) consumer who has experienced barriers to getting prescription drugs due to their cost;

3.

two members appointed by the House majority leader, including a representative of (a) physicians and (b) nurses;

4.

two members appointed by the House minority leader, including a representative of (a) private insurers and (b) brand-name drug corporations;

5.

two members appointed by theSenate minority leader,including a representative of (a) generic drug corporations and (b) an academic institution with expertise in health care costs;

and 6.

two members appointed by the governor, including a representative of (a) pharmacists and (b) pharmacy benefit managers.

The council’s ex officio members are the Office of Policy and Management secretary;

DCP, DPH, DSS, and insurance commissioners;

OHS executive director;

and Healthcare Advocate, or their designees.

Under the bill, initial appointments must be made by November 1, (though the bill requires the council to hold its first meeting prior to this date), and council members serve three-year terms.

The bill requires the House and Senate leaders to select the council’s chairpersons from among its members.

§§ 12 & 13 — PRESCRIPTION DRUG PRICING ASSESSMENT Requires PDAB to (1) identify drugs with high inflation or affordability challenges and (2) recommend upper payment limits for drugs with affordability challenges to OHS;

allows PDAB to review drug prices and pricing practices The bill allows PDAB to assess prescription drug pricing information by doing the following:

1.

entering into an MOU with another state to which a drug manufacturer reports pricing information;

2.

assessing spending for a drug in Connecticut;

sSB8 / File No.

309 44 sSB8 File No.

309 3.

using data and findings, including consumer affordability strategies, developed by (a) similar boards in other states or (b) other state or federal entities;

4.

using the federally established prescription drug maximum fair price for Medicare members;

and 5.

assessing any other available pricing information.

EFFECTIVE DATE:

July 1, 2024 Annual Inflation-Adjusted Costs The bill requires PDAB, beginning July 1, 2025, to identify prescription drugs that, when adjusted annually for inflation, are:

1.

brand-name drugs with a launch wholesale acquisition cost of at least $30,000 or more per year or treatment course, 2.

brand-name drugs with a wholesale acquisition cost increase of at least $3,000 in a 12-month period, or 3.

biosimilars (i.e., drugs similar to other licensed drugs) with a launch wholesale acquisition cost not at least 15% lower than the referenced brand biologic.

The board must also identify generic drugs that have:

1.

a wholesale acquisition cost of at least $100 for (a) a 30-day dosage supply, (b) a supply lasting a patient fewer than 30 days based on the recommended dosage, or (c) one unit of drug if the FDA does not recommend a finite dosage;

or 2.

a wholesale acquisition cost that increased by at least 200% in the previous 12-month period.

Affordability Challenges Beginning July 1, 2025, the bill requires the board to identify other drugs or pricing practices that have created, or may create, affordability challenges for Connecticut’s health care system or patients, including sSB8 / File No.

309 45 sSB8 File No.

309 drugs to address significant public health priorities.

To do so, the bill allows the board to consider the following:

1.

the drug’s wholesale acquisition cost;

2.

the price of therapeutic alternatives;

3.

the price concession, discount, or rebate the manufacturer provides or is expected to provide to health plans and pharmacy benefits managers for (a) the drug under review and (b) therapeutic alternatives;

4.

the cost to health plans for patient access based on standard dosage;

5.

how the drug’s cost relative to health plan benefit design impacts patient access;

6.

the current or expected cost for manufacturer-supported patient access programs;

7.

the drug’s financial impacts on health, medical, or social services costs relative to those for therapeutic alternatives;

8.

a Connecticut patient’s average copayment or other cost sharing for the drug;

and 9.

any other factors it deems necessary or any other information the manufacturer provides.

Prescription Drug Review The bill allows PDAB to review, within available appropriations, any drug or pricing practice that has a high cost when adjusted for inflation or creates an affordability challenge if, after (1) seeking stakeholder input and (2) considering the average patient cost share of the drug, it determines a review is in the interest of consumers.

Under the bill, when doing a review, the board must examine any information related to the drug’s pricing, including:

sSB8 / File No.

309 46 sSB8 File No.

309 1.

net average price in the state;

2.

market competition and context;

3.

the manufacturer’s projected revenue;

4.

estimated value or cost effectiveness;

5.

if and how the drug is an innovative therapy or likely to improve health for target consumers;

and 6.

cost mitigation strategies relevant to the drug, such as rebates, discounts, and patient access programs.

The bill also allows the board to examine costs or potential costs of FDA breakthrough and orphan drugs (i.e., drugs to treat rare conditions).

Upper Payment Limits The bill requires the board to recommend to the OHS executive director and insurance commissioner an upper payment limit for any drug it determines has led or will lead to an affordability challenge.

The board must consider (1) the cost of administering the drug, (2) the cost of delivering the drug to patients, and (3) relevant administrative costs when determining its recommended upper payment limit.

To makes its recommendation, the bill allows the board to use:

1.

upper payments set by (a) boards in other states and (b) other state or federal entities, as long as their price justification process is as rigorous as that outlined in this bill;

and 2.

a prescription drug’s Medicare maximum fair price.

§ 14 — PAYMENT LIMIT VIOLATIONS Prohibits state entities, health benefit plans, and participating ERISA plans from purchasing drugs at a price higher than its upper payment limit;

prohibits pharmacies from distributing to certain consumers drugs purchased at a price higher than its upper payment limit The bill makes it a violation for a state entity,health benefit plan (e.g., sSB8 / File No.

309 47 sSB8 File No.

309 a commercial health insurance policy), or participating Employee Retirement Income Security Act (ERISA) plan (e.g., a health plan subject to federal minimum standards that chooses to participate in the bill’s requirements) to purchase drugs for consumers at a price higher than the PDAB-established upper payment limit.

The bill requires any contract between a state entity, health benefit plan, or participating ERISA plan and a third party to include that rates paid for drugs may not exceed the upper payment limit.

Similarly, under the bill a Connecticut-licensed retail pharmacy may not purchase drugs meant for people whose health care is provided by a state entity, health benefit plan, or ERISA plan at a price higher than the PDAB’s upper payment limit.

The bill is silent on how these violations will be assessed and what penalties may be imposed.

EFFECTIVE DATE:

July 1, 2025 § 15 — COST SAVINGS Requires state entities, health benefit plans, and participating ERISA plans to (1) use any savings generated by an upper payment limit to lower consumers’ costs and (2) annually report to PDAB and OHS on savings achieved;

requires OHS to annually report on the savings to certain legislative committees Under the bill, any savings a state entity, health benefit plan, or participating ERISA plan generates that are attributable to an implemented upper payment limit must be used to reduce consumers’ health care costs, prioritizing reducing out-of-pocket prescription drug costs.

Beginning by April 1, 2026, the bill requires the state entities and plans to annually report to PDAB and OHS on savings achieved and how savings were used to reduce consumers’ costs.

The bill requires the OHS executive director, beginning by July 1, 2026, to annually report on savings achieved and recommendations to increase savings to the Appropriations, General Law, Human Services, Insurance and Real Estate, and Public Health committees.

sSB8 / File No.

309 48 sSB8 File No.

309 EFFECTIVE DATE:

July 1, 2025 § 16 — DRUG WITHDRAWAL Requires manufacturers to (1) provide six-months’ notice before withdrawing from sale a drug with an established upper payment limit and (2) notify PDAB within 30 days if it expects a drug shortage;

requires PDAB to fine a manufacturer up to $500,000 for failure to give notice before withdrawing a drug The bill requires a manufacturer to give at least six-months’ written notice before it discontinues distributing a drug for which the board has established an upper payment limit to (1) PDAB, (2) the insurance commissioner, (3) the attorney general, and (4) any entity with which it is contracted with for the drug’s sale.

The bill also requires a manufacturer that expects a shortage of its drug to notify PDAB within days after making this determination.

Under the bill, PDAB must fine a manufacturer up to $500,000 if it fails to give the required notice before withdrawing a drug.

EFFECTIVE DATE:

July 1, 2025 §§ 17-19 — INSULIN Requires state entities and health benefit plans to cover certain insulin products at the lowest wholesale acquisition cost in a preferred tier with no copayment or out-of-pocket cost;

allows plans to cover and offer more than one insulin product The bill requires state entities and health benefit plans (other than as required in collectively bargained agreements that affect the state employee plan) to make available to beneficiaries an eligible insulin product at the lowest wholesale acquisition cost in a preferred tier with no copayment or out-of-pocket cost.

An “eligible insulin product” is an insulin product, including pens or vials, for which at least two licenses have been issued and that continues to be marketed.

Under current law, health benefit plans generally must cap the cost of insulin at $25 per 30-day supply (CGS §§ 38a-492d & -518d).

The bill also allows state entities and health benefit plans to (1) cover more than one eligible insulin product in a preferred tier and (2) offer, without out-of-pocket costs, another eligible insulin product if the product has a net cost lower than the lowest wholesale acquisition cost.

sSB8 / File No.

309 49 sSB8 File No.

309 EFFECTIVE DATE:

January 1, 2025 § 20 — DRUG SHORTAGE PREVENTION Requires hospitals and drug purchasing agencies to (1) have drug shortage prevention strategies covering at least one-third of expected use for at least 40 drugs and (2) include in any long-term drug purchasing contract certain drug shortage mitigation strategies The bill requires hospitals and drug purchasing agencies (i.e., the departments of correction, mental health and addiction services, and social services) to have a drug shortage prevention strategy that covers at least one-third of the hospital’s or agency’s expected use of at least 40 eligible drugs.

Under the bill, “eligible drugs” are federally approved injectables on the FDA’s drug shortage list, on the list within the past five years, or at risk of shortage.

EFFECTIVE DATE:

July 1, 2024 Contract Requirements In any long-term prescription drug purchase contract, a hospital or agency must require the contracting entity to:

1.

hold physical reserve inventory equal to two quarters of the contract volume to buffer supply disruption or demand, unless the drug is in shortage or subject to a supply disruption;

2.

have a competent quality control unit and processes to evaluate supplier quality;

3.

have a process to ensure drug quality and complete documentation of good manufacturing practices;

and 4.

participate, following federal law, in the 340B Drug Pricing Program.

Reporting Requirements The bill outlines the following drug shortage prevention compliance reporting requirements:

1.

beginning by January 1, 2025, hospitals must annually report to the DPH commissioner documentation of their compliance;

sSB8 / File No.

309 50 sSB8 File No.

309 2.

beginning by February 1, 2025, the correction, mental health and addiction services, DPH, and DSS commissioners must annually report to OHS on hospitals’, drug purchasing agencies’, and contractors’ compliance;

and 3.

beginning by April 1, 2025, the OHS executive director must report this information to the General Law, Human Services, Judiciary, and Public Health committees.

§§ 21 & 22 — 340B DRUGS Prohibits drug manufacturers, wholesalers, and distributors from (1) limiting a pharmacy’s access to 340B drugs and (2) requiring health care organizations or pharmacies to submit claims or utilization data as a condition for receiving 340B drugs;

establishes a hearing process and penalties for violators Under federal law, the 340B Drug Pricing Program requires drug manufacturers participating in Medicaid to provide outpatient drugs to eligible healthcare organizations that treat low-income and uninsured patients (i.e., “covered entities”) at reduced prices.

Pharmacies may contract with 340B-participating healthcare organizations (e.g., hospitals or outpatient clinics) to also purchase reduced-price outpatient drugs.

The bill prohibits manufacturers, third-party logistics providers, wholesalers, or distributors, or their agents or affiliates, from directly or indirectly taking any of the following actions:

1.

limiting a 340B-authorized pharmacy’s access to 340B drugs, unless the pharmacy’s receipt of a drug is federally prohibited;

or 2.

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.

EFFECTIVE DATE:

Upon passage Violations sSB8 / File No.

309 51 sSB8 File No.

309 Beginning July 1, 2024, the bill subjects entities to a civil penalty of up to $50,000 if the OHS executive director receives information or has reasonable belief that the entity has violated these restrictions.

The bill allows the executive director to issue notice of the violation and civil penalty by mail or personal service.

The notice must include:

1.

reference to the Connecticut law or regulation that has been violated;

2.

a short and plain language statement of the violation;

3.

a description of the activity to cease;

4.

the amount of the imposed civil penalty;

and 5.

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

Under the bill, OHS must hold requested hearings following the UAPA.

If after a hearing OHS find that a violation has occurred or that the entity has violated any OHS order, the office must issue a final cease and desist order in addition to any civil penalty imposed.

If a timely hearing request is not made, OHS must issue a cease and desist order or impose a civil penalty.

The bill specifies that its 340B drug provisions must not be applied in a way that conflicts with, or is less restrictive than, applicable state and federal laws.

COMMITTEE ACTION Human Services Committee Joint Favorable Substitute Yea 15 Nay 7 (03/19/2024) sSB8 / File No.

309 52