Drug transparency targeted in Colorado House
A bill aimed at reducing prescription drug costs and prompting health insurers and drug manufacturers to open their books on drug pricing was introduced Jan. 21 in the Colorado House of Representatives.
The legislation, HB 20-1160, requires insurers to submit to the state’s commissioner of insurance information about prescription drugs covered under their health insurance plans that health insurers paid for in the preceding calendar years.
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The “Colorado Prescription Drug Price Transparency Act of 2020,” also requires health insurers to disclose information about rebates received from prescription drug manufacturers, a certification detailing how rebates were accounted for in insurance premiums and a list of all pharmacy benefit management firms (PBMs) with whom they contract.
The measure, if passed, also requires prescription drug manufacturers to notify the insurance commissioner, state purchasers, health insurers, PBMs, pharmacies, and hospitals when the manufacturer, on or before Jan. 1, 2021, increases the price of certain prescription drugs by more than specified amounts or introduces a new specialty drug in the commercial market.
HB 20-1160 also requires prescription drug manufacturers, within 15 days after the end of each calendar quarters that starts on or after Jan. 1, 2021 to provide specific information to the insurance commissioners regarding the drugs the manufacturer disclosed to purchasers.
Health insurers, as well as PBMs, also must annually report information about rebates and administrative fees received from manufacturers for prescription drugs they paid for in the prior calendar year and the average wholesale price paid for prescription drugs by individuals, small employers, and large employers enrolled in health plans issued by the health insurer.
The insurance commissioner is also required to post information received from health insurers, prescription drug manufacturers, PBMs, and nonprofit organizations on the division of insurance’s website Information the commissioner may deem proprietary would not be posted, according to the legislation.
The commissioner, or a disinterested third party, is supposed to analyze the data reported by health insurers, prescription drug manufacturers, PBMs and nonprofits, according to the legislation.
HB 20-1160 also requires the commissioners to publish an annual report on drug pricing in the state, submit the report to the governor and certain legislative committees as well as the yearly “State Measure for Accountable, Responsive, and Transparent (SMART) Government Act” hearings.
The bill authorizes the insurance commissioner to enforce provisions of the bill, including fining health insurers up to $10,000 a day for failing to report the required data. Nonprofits face a fine of up to $10,000 for failing to comply with reporting requirements.
A prescription drug manufacturer that fails to notify purchasers or fails to report required data to the commissioner is subject to discipline by the state board of pharmacy, including a penalty of up to $10,000 per day for each day the manufacturer fails to comply with the notice or reporting requirements.
Democrat State Representatives Dylan Roberts and Domique Jackson are the bill’s primary sponsors. The bill has been assigned to the House Health and Insurance Committee and the House Appropriations Committees. No hearing date has been set.