Illinois General Assembly - Full Text of HB3493
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Full Text of HB3493  101st General Assembly


Rep. Will Guzzardi

Filed: 2/20/2020





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2    AMENDMENT NO. ______. Amend House Bill 3493 by replacing
3everything after the enacting clause with the following:
4    "Section 1. Short title. This Act may be cited as the
5Prescription Drug Affordability Act.
6    Section 5. The General Assembly finds that:
7    (1) Prescription drugs are an essential part of good health
8care and a critical component of our health care system.
9Illinoisans spend $13,000,000,000 each year on prescription
10drugs and have a vested interest in ensuring they are
11affordable. People living with chronic conditions need
12prescription drugs to function and stay healthy. Their quality
13of life is dependent on them. Access to prescription drugs can
14be the difference between life and death.
15    (2) Illinoisans have faced increasing challenges in
16affording the prescription drugs they depend upon to be



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1healthy. The costs of brand name drugs have increased 60% since
22014 and annual cost increases regularly outpace medical
4    (3) Affordability challenges have led more and more
5Illinoisans to skip doses of prescribed medication and
6otherwise ration their medication. An estimated 46,000,000
7Americans have skipped or rationed their medications due to
8cost, sometimes leading to serious medical complications.
9    (4) The increase in prescription drug costs is the leading
10driver of increases in health insurance premiums. High
11prescription drug costs raise State costs under Medicaid and
12the State Employee Group Insurance Program, raise employer
13benefits costs, and are passed onto individuals and families.
14    (5) It is the traditional role of State government to
15protect the health, safety, and welfare of its residents.
16Illinois has a long history of ensuring services and products
17essential to life and health, such as clean water and
18electricity, are affordable. The State has a compelling reason
19to ensure prescription drug costs balance consumer access and
20returns for industry.
21    (6) The current system is causing affordability challenges
22for those who depend on insulin. The average cost of insulin
23tripled from 2002 to 2013, and one out of every 4 individuals
24living with diabetes has had to ration his or her insulin due
25to cost. This can lead to serious complications including
26kidney failure, heart disease, blindness, amputations, and



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2    (7) The current system is causing affordability challenges
3for those who need prescription drugs to treat multiple
4sclerosis (MS). Early and ongoing treatment with a
5disease-modifying therapy for MS is the best way to modify the
6course of the disease, prevent accumulation of disability, and
7protect the brain, yet many people cannot access the
8medications they need. It is estimated that 40% of those living
9with MS skip doses of medications due to cost. These
10medications routinely cost $80,000 per year or more and have
11increased five-fold since they first came to market in the
13    (8) The current system is causing affordability challenges
14for those who need prescription drugs to treat cancer.
15Prescriptions to treat cancer routinely cost more than $100,000
16per year. The incremental increase in cost for a course of
17treatment increased from $30,447 in 2006 to $161,141 in 2015.
18Cancer survivors are 2.7 times more likely to file for
19bankruptcy than those who have not been diagnosed with cancer.
20    (9) The current system is causing affordability challenges
21for those who need prescription drugs to treat rheumatoid
22arthritis. Medications to treat rheumatoid arthritis increased
2370% in only 3 years. The initial cost of rheumatoid arthritis
24medication was $10,000 per year when it was first introduced,
25but has increased to $40,000 per year despite several
26alternatives coming to market.



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1    (10) The State and its residents are facing numerous
2affordability challenges across many classes of drugs. The
3current system has not produced affordable costs. An Illinois
4Prescription Drug Affordability Board that can review multiple
5classes of drugs across the supply chain is therefore necessary
6to determine how best to deliver prescription drug costs that
7are affordable to all Illinoisans.
8    Section 10. Definitions. In this Act:
9    "Biologic" means a drug that is produced or distributed in
10accordance with a biologics license application approved under
1142 U.S.C. 447.502.
12    "Biosimilar" means a drug that is produced or distributed
13in accordance with a biologics license application approved
14under 42 U.S.C. 262(k)(3).
15    "Board" means the Prescription Drug Affordability Board.
16    "Brand name drug" means a drug that is produced or
17distributed in accordance with an original new drug application
18approved under 21 U.S.C. 355(c). "Brand name drug" does not
19include an authorized generic drug as defined by 42 CFR
21    "Council" means the Prescription Drug Affordability
22Stakeholder Council.
23    "Generic drug" means:
24        (1) a retail drug that is marketed or distributed in
25    accordance with an abbreviated new drug application,



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1    approved under 21 U.S.C. 355(j);
2        (2) an authorized generic drug as defined by 42 CFR
3    447.502; or
4        (3) a drug that entered the market before 1962 that was
5    not originally marketed under a new drug application.
6    "Manufacturer" means an entity that:
7        (1) engages in the manufacture of a prescription drug
8    product; or
9        (2) enters into a lease with another manufacturer to
10    market and distribute a prescription drug product under the
11    entity's own name; and
12        (3) sets or changes the wholesale acquisition cost of
13    the prescription drug product it manufactures or markets.
14    "Prescription drug product" means a brand name drug, a
15generic drug, a biologic, or a biosimilar.
16    Section 15. Prescription Drug Affordability Board.
17    (a) There is established a Prescription Drug Affordability
18Board. The purpose of the Board is to protect State residents,
19State and local governments, commercial health plans, health
20care providers, pharmacies licensed in the State, and other
21stakeholders within the health care system from the high costs
22of prescription drug products. The Board is a public body and
23is an instrumentality of the State. The Board is an independent
24unit of State government. The exercise by the Board of its
25authority under this Act is an essential function.



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1    (b) The 5 members of the Board and 5 alternates shall be
2appointed by the Governor with the advice and consent of the
3Senate. The Governor shall select one member to serve as Chair.
4If the Senate is not in session when the first appointments are
5made, the Governor shall make temporary appointments as in the
6case of a vacancy. No Board seat shall remain vacant more than
760 consecutive days.
8    (c) The Board members and alternates must collectively have
9expertise in health care economics and clinical medicine. A
10member or an alternate member may not be an employee of, a
11board member of, or a consultant to a manufacturer or trade
12association for manufacturers.
13    (d) Any conflict of interest, including whether the
14individual has an association, including a financial or
15personal association, that has the potential to bias or has the
16appearance of biasing an individual's decision in matters
17related to the Board or the conduct of the Board's activities,
18shall be considered and disclosed when appointing members and
19alternate members to the Board.
20    (e) The term of a member or an alternate member is 5 years.
21The terms of the members and alternate members shall be
23    (f) The Chair shall hire an executive director, general
24counsel, and staff for the Board. Staff of the Board shall
25receive a salary as provided in the budget of the Board. A
26member of the Board: (i) may receive compensation as a member



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1of the Board; and (ii) is entitled to reimbursement for
3    (g) A majority of the members of the Board shall constitute
4a quorum for the purposes of conducting the business of the
6    (h) Subject to the requirements of this subsection (h), the
7Board shall meet in open session at least once every 6 weeks to
8review prescription drug product information. Information
9concerning the location, date, and time of the meeting must be
10made publicly available in accordance with the Open Meetings
11Act. The Chair may cancel or postpone a meeting if there are no
12prescription drug products to review.
13    The Board shall perform the following actions in open
14session: (i) deliberations on whether to subject a prescription
15drug product to a cost review; (ii) any vote on whether to
16impose an upper payment limit on purchases and payor
17reimbursements of prescription drug products in the State; and
18(iii) any decision by the Board. The Board may otherwise meet
19in closed session to discuss proprietary data and information.
20    The Board shall provide public notice of each Board meeting
21at least 2 weeks in advance of the meeting. Materials for each
22Board meeting shall be made available to the public at least
23one week in advance of the meeting. The Board shall provide an
24opportunity for public comment at each open meeting of the
25Board. The Board may not make any binding decisions unless this
26comment period has been provided with a sufficient amount of



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1time. The Board shall provide the public with the opportunity
2to provide written comments on pending decisions of the Board.
3The Board may allow expert testimony at Board meetings,
4including when the Board meets in closed session.
5    Members of the Board shall recuse themselves from decisions
6related to a prescription drug product and disclose interests
7if the member, or an immediate family member of the member, has
8received or could receive any of the following: (i) a direct
9financial benefit of any amount deriving from the result or
10finding of a study or determination by or for the Board; or
11(ii) a financial benefit from any person that owns,
12manufactures, or provides prescription drug products,
13services, or items to be studied by the Board that in the
14aggregate exceeds $5,000 per year. A disclosure of interests
15under this paragraph shall include the type, nature, and
16magnitude of the interests of the member or his or her
17immediate family member involved. For the purposes of this
18paragraph, a financial benefit includes honoraria, fees,
19stock, the value of the member's or immediate family member's
20stock holdings, and any direct financial benefit deriving from
21the finding of a review conducted under this Act.
22    A conflict of interest shall be disclosed in advance of the
23first open meeting after the conflict is identified or within 5
24days after the conflict is identified. A conflict of interest
25shall be disclosed by: (i) the Board when hiring Board staff;
26(ii) the appointing authority when appointing members and



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1alternate members to the Board and members to the Council; and
2(iii) the Board when a member of the Board is recused in any
3final decision resulting from a review of a prescription drug
4product. A conflict of interest disclosed under this Section
5shall be posted on the website of the Board unless the Chair of
6the Board recuses the member from any final decision resulting
7from a review of a prescription drug product.
8    Members and alternate members of the Board, Board staff,
9and third-party contractors may not accept any gift or donation
10of services or property that indicates a potential conflict of
11interest or has the appearance of biasing the work of the
13    Section 20. Powers and duties of the Board.
14    (a) In furtherance of this Act, the Board shall identify
15prescription drug products that may create affordability
16challenges for residents of the State and conduct an
17affordability review for a minimum of 10 such prescription drug
18products over the course of a 12-month period. The Board has
19the authority to set an upper payment limit for such
20prescription drug products.
21    (b) To the extent practicable, the Board shall access
22pricing information for prescription drug products by: (i)
23entering into a memorandum of understanding with another state
24to which manufacturers already report pricing information; and
25(ii) accessing other available pricing information.



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1    (c) In addition to the powers set forth elsewhere in this
2Act, the Board may: (i) adopt rules for the implementation of
3this Act; (ii) enter into a contract with a qualified,
4independent third party for any service necessary to carry out
5the powers and duties of the Board; and (iii) exercise any and
6all other powers necessary or desirable to accomplish the
7purposes, objectives, and provisions of this Act and to perform
8its duties under this Act. Unless permission is granted by the
9Board, a third party hired by the Board may not release,
10publish, or otherwise use any information to which the third
11party has access under its contract.
12    Section 25. Prescription Drug Affordability Stakeholder
14    (a) The Prescription Drug Affordability Stakeholder
15Council is created.
16    (b) The purpose of the Council is to provide stakeholder
17input to assist the Board in making decisions as required under
18this Act.
19    (c) The Council shall consist of 25 members appointed 5
20each by the Governor, the Speaker of the House of
21Representatives, the Minority Leader of the House of
22Representatives, the President of the Senate, and the Minority
23Leader of the Senate, and shall represent the following
25        (1) two representative of a statewide health care



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1    advocacy coalition;
2        (2) one representative of a statewide advocacy
3    organization for seniors;
4        (3) one representative of a statewide organization for
5    diverse communities;
6        (4) two representative of a labor union;
7        (5) two health services researchers specializing in
8    prescription drugs;
9        (6) one representative of doctors;
10        (7) one representative of nurses;
11        (8) one representative of hospitals;
12        (9) one representative of health insurers;
13        (10) one representative of the Governor's Office of
14    Management and Budget;
15        (11) one clinical researcher;
16        (12) one representative of brand name drug
17    corporations;
18        (13) one representative of generic drug corporations;
19        (14) one representative of employers;
20        (15) one representative of pharmacy benefit managers;
21        (16) one representative of pharmacists;
22        (17) one representative of pharmacologists; and
23        (18) five members of the public.
24    (d) The members of the Council shall have knowledge of one
25or more of the following:
26        (1) the pharmaceutical business model;



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1        (2) supply chain business models;
2        (3) the practice of medicine or clinical training;
3        (4) consumer or patient perspectives;
4        (5) health care costs, trends, and drivers;
5        (6) clinical and health services research; or
6        (7) the State's health care marketplace.
7    (e) From among the membership of the Council, the Board
8chair shall appoint 2 members to be co-chairs of the Council.
9    (f) The term of a member is 3 years. The initial members of
10the Council shall serve staggered terms.
11    (g) A member of the Council may not receive compensation as
12a member of the Council, but is entitled to reimbursement for
13travel expenses.
14    (h) The Board shall ensure Council membership in accordance
15with this Section and may deny appointment if appointees do not
16comply. No Council seat shall remain vacant more than 60
17consecutive days.
18    Section 30. Drug cost affordability review.
19    (a) The Board shall identify the following prescription
20drug products and determine whether each identified
21prescription drug product should be subject to a cost review as
22described in subsection (e):
23        (1) brand name drugs and biologics that, as adjusted
24    annually for inflation in accordance with the Consumer
25    Price Index, have:



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1            (A) a launch wholesale acquisition cost of $30,000
2        or more for a year or course of treatment; or
3            (B) a wholesale acquisition cost increase of
4        $3,000 or more in any 12-month period, or course of
5        treatment if less than 12 months;
6        (2) biosimilar drugs that have a launch wholesale
7    acquisition cost that is not at least 15% lower than the
8    referenced brand biologic at the time the biosimilar is
9    launched;
10        (3) generic drugs that, as adjusted annually for
11    inflation in accordance with the Consumer Price Index, have
12    a wholesale acquisition cost:
13            (A) of $100 or more for:
14                (i) a 30-day supply lasting a patient for a
15            period 30 consecutive days based on the
16            recommended dosage approved for labeling by the
17            United States Food and Drug Administration;
18                (ii) a supply lasting a patient for fewer than
19            30 days based on the recommended dosage approved
20            for labeling by the United States Food and Drug
21            Administration; or
22                (iii) one unit of the drug if the labeling
23            approved by the United States Food and Drug
24            Administration does not recommend a finite dosage;
25            and
26            (B) that increased by 200% or more during the



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1        preceding 12-month period, as determined by the
2        difference between the resulting wholesale acquisition
3        cost and the average of the wholesale acquisition cost
4        reported over the preceding 12 months; and
5        (4) in consultation with the Council, prescription
6    drug products that may create affordability challenges for
7    the State healthcare system, including patients.
8    (b) After identifying a prescription drug product as
9required under subsection (a), the Board shall determine
10whether to conduct a cost review as described in subsection (e)
11for each identified prescription drug product by:
12        (1) seeking Council input about the prescription drug
13    product; and
14        (2) considering the average patient cost share of the
15    prescription drug product.
16    (c) The information to conduct an affordability review may
17include any document and research related to the manufacturer's
18selection of the introductory price or price increase of the
19prescription drug product, including life cycle management,
20net average price in the State, market competition and context,
21projected revenue, and the estimated value or
22cost–effectiveness of the prescription drug product.
23    (d) A manufacturer shall provide such reports as the Board
24deems necessary for the Board to conduct an affordability
25review. The Board shall not unreasonably request information
26that constitutes proprietary, privileged, or confidential



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1trade secrets under the Freedom of Information Act. Failure of
2a manufacturer to provide the Board with the information for an
3affordability review does not affect the authority of the Board
4to conduct such a review.
5    (e) If the Board conducts a review of the cost and
6affordability of a prescription drug product, the review shall
7determine whether use of the prescription drug product that is
8fully consistent with the labeling approved by the United
9States Food and Drug Administration or standard medical
10practice has led or will lead to affordability challenges for
11the State health care system or high out-of-pocket costs for
12patients. To the extent practicable, in determining whether a
13prescription drug product has led or will lead to an
14affordability challenge, the Board shall consider the
15following factors:
16        (1) the wholesale acquisition cost for the
17    prescription drug product sold in this State;
18        (2) the average monetary price concession, discount,
19    or rebate the manufacturer provides to health plans in this
20    State or is expected to provide to health plans in this
21    State as reported by manufacturers and health plans,
22    expressed as a percent of the wholesale acquisition cost
23    for the prescription drug product under review;
24        (3) the total amount of the price concession, discount,
25    or rebate the manufacturer provides to each pharmacy
26    benefit manager operating in this State for the



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1    prescription drug product under review, as reported by
2    manufacturers and pharmacy benefit managers, expressed as
3    a percent of the wholesale acquisition costs;
4        (4) the price at which therapeutic alternatives have
5    been sold in this State;
6        (5) the average monetary concession, discount, or
7    rebate the manufacturer provides or is expected to provide
8    to health plan payors and pharmacy benefit managers in this
9    State for therapeutic alternatives;
10        (6) the costs to health plans based on patient access
11    consistent with Federal Food and Drug Administration
12    labeled indications and recognized standard medical
13    practice;
14        (7) the impact on patient access resulting from the
15    cost of the prescription drug product relative to insurance
16    benefit design;
17        (8) the current or expected dollar value of
18    drug-specific patient access programs that are supported
19    by the manufacturer;
20        (9) the relative financial impacts to health, medical,
21    or social services costs as can be quantified and compared
22    to baseline effects of existing therapeutic alternatives;
23        (10) the average patient co-pay or other cost-sharing
24    for the prescription drug product in this State;
25        (11) any information a manufacturer chooses to
26    provide; and



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1        (12) any other factors as determined by the Board in
2    rules adopted by the Board.
3    (f) If the Board finds that the spending on a prescription
4drug product reviewed under this Section has led or will lead
5to an affordability challenge, the Board shall establish an
6upper payment limit after considering: (i) the cost of
7administering the drug; (ii) the cost of delivering the drug to
8consumers; and (iii) other relevant administrative costs
9related to the drug. The upper payment limit applies to all
10purchases and payor reimbursements of the prescription drug
11product dispensed or administered to individuals in the State
12in person, by mail, or by other means.
13    (g) Any information submitted to the Board in accordance
14with this Section shall be subject to public inspection only to
15the extent allowed under the Freedom of Information Act.
16    (h) This Section may not be construed to prevent a
17manufacturer from marketing a prescription drug product
18approved by the United States Food and Drug Administration
19while the product is under review by the Board.
20    Section 35. Remedies. The Attorney General shall have
21authority to enforce this Act. The Attorney General may pursue
22any available remedy under State or federal law to accomplish
23the objectives of this Act. Notwithstanding any other provision
24of law to the contrary, the Board and its staff shall forward
25any complaints regarding alleged violations of this Act or any



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1consumer protection law or other law to the Attorney General
2and work cooperatively with the Attorney General. Nothing in
3this Section shall be construed to limit the remedies available
4under State or federal law that provide greater or equal
5protection to consumers.
6    Section 40. Appeal of Board decisions.
7    (a) A person aggrieved by a decision of the Board may
8request an appeal of the decision within 30 days after the
9finding of the Board.
10    (b) The Board shall hear the appeal and make a final
11decision within 60 days of the hearing.
12    (c) Any person aggrieved by a final decision of the Board
13may petition for judicial review.
14    Section 45. Prescription Drug Affordability Board Fund.
15    (a) In this Section, "fund" means the Prescription Drug
16Affordability Board Fund.
17    (b) The Prescription Drug Affordability Board Fund is
18created. The fund shall be used only to provide funding for the
19Board and for the purposes authorized under this Act, including
20any costs expended by any State agency to implement this Act.
21    (c) Subject to subsection (g), the Board shall be funded by
22an assessment on all manufacturers. The Board shall determine
23the amount of the assessment required under this subsection
24based on each manufacturer's relative share of gross revenue



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1from drug sales.
2    (d) The Board shall pay all moneys collected from the
3assessment into the fund.
4    (e) Any investment earnings shall be retained to the credit
5of the fund.
6    (f) This Section may not be construed to prohibit the fund
7from receiving moneys from any other source.
8    (g) The Board shall be established using general funds,
9which shall be repaid to the State with the assessments
10required under subsection (c).
11    Section 50. Report.
12    (a) On or before December 31 of each year, the Board shall
13submit to the General Assembly a report that includes:
14        (1) price trends for prescription drug products;
15        (2) the number of prescription drug products that were
16    subject to Board review, including the results of the
17    review and the number and disposition of appeals and
18    judicial reviews of Board decisions; and
19        (3) any recommendations the Board may have on further
20    legislation needed to make prescription drug products more
21    affordable in this State.
22    (b) On or before June 1, 2021, the Prescription Drug
23Affordability Board shall:
24        (1) conduct a study of the operation of the generic
25    drug market in the United States that includes a review of



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1    physician-administered drugs and considers:
2            (A) the prices of generic drugs on a year-over-year
3        basis;
4            (B) the degree to which generic drug prices affect
5        yearly insurance premium changes;
6            (C) annual changes in insurance cost-sharing for
7        generic drugs;
8            (D) the potential for and history of drug
9        shortages;
10            (E) the degree to which generic drug prices affect
11        yearly State Medicaid spending; and
12            (F) any other relevant study questions; and
13        (2) report its findings to the General Assembly.
14    Section 55. Term expiration.
15    (a) The terms of the initial members and alternate members
16of the Prescription Drug Affordability Board shall expire as
18        (1) one member and one alternate member in 2023;
19        (2) two members and 2 alternate members in 2024; and
20        (3) two members, including the Chair of the Board, and
21    2 alternate members in 2025.
22    (b) The terms of the initial members of the Prescription
23Drug Affordability Stakeholder Council shall expire as
25        (1) eight members in 2023;



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1        (2) eight members in 2024; and
2        (3) nine members in 2025.
3    Section 60. ERISA plans and Medicare drug plans. This Act
4obligates State-sponsored and State-regulated health plans and
5health programs to limit drug reimbursements and drug payment
6to no more than the Board-established upper payment limit.
7Employee Retirement Income Security Act (ERISA) plans and
8Medicare Part D plans are not bound by decisions of the Board
9and can choose to reimburse more than the upper payment limit.
10Providers who dispense and administer drugs in this State to
11individuals in this State are bound to bill all payers no more
12than the upper payment limit to the patient without regard to
13whether or not an ERISA plan or Medicare Part D plan chooses to
14reimburse the provider above the upper payment limit.
15    Section 97. Severability. If any provision of this Act or
16the application thereof to any person or circumstance is held
17invalid for any reason in a court of competent jurisdiction,
18the invalidity does not affect other provisions or any other
19application of this Act that can be given effect without the
20invalid provision or application, and for this purpose the
21provisions of this Act are declared severable.
22    Section 900. The State Finance Act is amended by adding
23Section 5.930 as follows:



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1    (30 ILCS 105/5.930 new)
2    Sec. 5.930. The Prescription Drug Affordability Board
4    Section 999. Effective date. This Act takes effect January
51, 2021.".