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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 act creates the Colorado prescription drug affordability review board (board) in the division of insurance (division) in the department of regulatory agencies as an independent unit of state government, requires the board to perform affordability reviews of prescription drugs, and authorizes the board to 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 act prohibits, with certain exceptions, any purchase or payer reimbursement for a prescription drug at an amount that exceeds the upper payment limit established by the board for that prescription drug.

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. Final board decisions are subject to judicial review.

Any prescription drug manufacturer (manufacturer) that intends to withdraw from sale or distribution within the state a prescription drug for which the board has established an upper payment limit 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.


The commissioner may impose a penalty of up to $500,000 on a manufacturer that fails to comply with the notice requirement. The board is directed to adopt rules regarding notice to consumers of a manufacturer's intent to withdraw a prescription drug from sale or distribution in the state.

Beginning in the 2022 calendar year, for all prescription drugs dispensed at a pharmacy and paid for by a carrier during the immediately preceding calendar year, the act 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 act 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, and the chair of the board must present to those committees information concerning any prescription drug for which the board established an upper payment limit during the preceding calendar year. Upon approval of a majority of the committee members, any member of the committees may pursue legislation to discontinue the upper payment limit for a particular prescription drug, and the legislation does not count against the limit on the number of bills the member may introduce in a regular legislative session.

The board and its functions are repealed, effective September 1, 2026, following a sunset review by the department of regulatory agencies.

For the 2021-2022 state fiscal year, the act appropriates $730,711 from the division of insurance cash fund to the department of regulatory agencies. Of this amount, $325,297 is appropriated for use by the division for personal services, $22,650 is appropriated for use by the division for operating expenses, and $382,824 is appropriated for the purchase of legal services, which amount is reappropriated to the department of law for providing legal services.

(Note: This summary applies to this bill as enacted.)

Status

Introduced
Passed
Became Law

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Bill Text

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