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Bill Detail: HB20-1160

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Title Drug Price Transparency Insurance Premium Reductions
Status House Committee on Appropriations Refer Amended to House Committee of the Whole (03/13/2020)
Bill Subjects
  • Health Care & Health Insurance
House Sponsors D. Jackson (D)
D. Roberts (D)
Senate Sponsors J. Ginal (D)
K. Donovan (D)
House Committee Health and Insurance
Senate Committee
Date Introduced 01/21/2020
Description

Section 1 of the bill enacts the Colorado Prescription Drug Price
TransparencyAct of 2020, which requires:
  • Health insurers, starting in 2021, to submit to the
commissioner of insurance (commissioner) information
regarding prescription drugs covered under their health
insurance plans that the health insurers paid for in the
preceding calendar year, including information about
rebates received from prescription drug manufacturers, a
certification regarding how rebates were accounted for in
insurance premiums, and a list of all pharmacy benefit
management firms (PBMs) with whom they contract;
  • Prescription drug manufacturers to notify the
commissioner, state purchasers, health insurers, PBMs,
pharmacies, and hospitals when the manufacturer, on or
after January 1, 2021, increases the price of certain
prescription drugs by more than specified amounts or
introduces a new specialty drug in the commercial market;
  • Prescription drug manufacturers, within 15 days after the
end of each calendar quarter that starts on or after January
1, 2021, to provide specified information to the
commissioner regarding the drugs about which the
manufacturer notified purchasers;
  • Health insurers or, if applicable, PBMs to annually report
specified information to the commissioner regarding
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 or that contain prescription drug benefits
managed or administered by the PBM; and
  • Certain nonprofit organizations to compile and submit to
the commissioner an annual report indicating the amount of
each payment, donation, subsidy, or thing of value received
by the nonprofit organization or its officers, employees, or
board members from a prescription drug manufacturer,
PBM, health insurer, or trade association and the
percentage of the nonprofit organization's total gross
income that is attributable to those payments, donations,
subsidies, or things of value.
The commissioner is required to post the information received
from health insurers, prescription drug manufacturers, PBMs, and
nonprofit organizations on the division of insurance's website, excluding
any information that the commissioner determines is proprietary.
Additionally, the commissioner, or a disinterested third-party contractor,
is to analyze the data reported by health insurers, prescription drug
manufacturers, PBMs, and nonprofit organizations and other relevant
information to determine the effect of prescription drug costs on health
insurance premiums. The commissioner is to publish a report each year,
submit the report to the governor and specified legislative committees,
and present the report during annual State Measurement for
Accountable, Responsive, and Transparent (SMART) Government Act
hearings. The commissioner is authorized to adopt rules as necessary to
implement the requirements of the bill.
Health insurers that fail to report the required data are subject to
a fine of up to $10,000 per day per report. Nonprofit organizations are
subject to a fine of up to $10,000 for failure to comply with reporting
requirements.
Section 2 specifies that failing to ensure that a PBM that a health
insurer uses to manage or administer its prescription drug benefits is
complying with reporting requirements constitutes an unfair method of
competition and an unfair or deceptive act or practice in the business of
insurance.
Section 3 specifies that a PBM is an entity that manages or
administers prescription drug benefits for a health insurer, either pursuant
to a contract or as an entity associated with the health insurer.
Under sections 4 and 5, 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. The commissioner is to report
manufacturer violations to the state board of pharmacy.
Section 6 requires a health insurer to reduce premiums for the
health plans it issues or renews on or after January 1, 2022, to adjust for
the rebates the health insurer received from prescription drug
manufacturers in the previous plan year.

Committee Reports
with Amendments
Full Text
Full Text of Bill (pdf) (most recent)
Fiscal Notes Fiscal Notes (02/11/2020) (most recent)  
Additional Bill Documents Bill Documents
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  • Past fiscal notes
  • Committee activity and documents
  • Bill History
 
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