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SB21-175

Prescription Drug Affordability Review Board

Concerning the Colorado prescription drug affordability review board, and, in connection therewith, directing the board to review the affordability of certain drugs and establish upper payment limits for certain drugs; prohibiting certain entities from purchasing or reimbursing for any drug for distribution in the state at an amount that exceeds the upper payment limit established for the prescription drug; establishing penalties for violations; and making an appropriation.
Session:
2021 Regular Session
Subject:
Health Care & Health Insurance
Bill Summary

The bill creates the Colorado prescription drug affordability review board (board) as an independent unit of state government and requires the board to perform affordability reviews of prescription drugs and establish upper payment limits for prescription drugs the board determines are unaffordable for Colorado consumers. The board is also required to promulgate rules as necessary for its purposes.

The board shall determine by rule the methodology for establishing an upper payment limit for a prescription drug. An upper payment limit applies to all purchases of and payer reimbursements for the prescription drug dispensed or administered to individuals in the state in person, by mail, or by other means. Any savings generated for a health benefit plan as a result of an upper payment limit established by the board must be used by the carrier that issued the health benefit plan to reduce costs to consumers, prioritizing the reduction of out-of-pocket costs for prescription drugs.

On and after January 1, 2022, the bill prohibits, with certain exceptions, any purchase or payer reimbursement for a prescription drug from exceeding an upper payment limit established by the board for that prescription drug. A person who violates the prohibition may be subject to a fine of $1,000 for each violation. Final board decisions are subject to judicial review.

A person aggrieved by a decision of the board may appeal the decision within 60 days. The board shall consider the appeal and issue a final decision concerning the appeal within 60 days after the board receives the appeal.

Any prescription drug manufacturer (manufacturer) that intends to withdraw a prescription drug for which the board has established an upper payment limit from sale or distribution within the state must notify, at least 180 days before the withdrawal:

  • The commissioner;
  • The attorney general; and
  • Each entity in the state with which the manufacturer has contracted for the sale or distribution of the prescription drug.

A manufacturer who fails to comply with the notice requirement may be required to pay a penalty of up to $500,000.

For all prescription drugs dispensed at a pharmacy and paid for by a carrier during the immediately preceding calendar year, the bill requires each carrier and each pharmacy benefit management firm acting on behalf of a carrier to report certain information to the all-payer health claims database .

The bill creates the Colorado prescription drug affordability advisory council to provide stakeholder input to the board.

The board must submit an annual report to the governor and to subject matter committees of the general assembly summarizing the activities of the board during the preceding calendar year.

The board and its functions are repealed, effective September 1, 2026, following a sunset review by the department of regulatory agencies.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Status

Introduced
Passed
Became Law

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