An Act To Establish the Maine Prescription Drug Affordability Board
Maine Legislature, Session 129, LD 1499
Committee: Health Coverage, Insurance and Financial Services
Sponsors: JACKSON, GIDEON, CLAXTON, FOLEY, GRATWICK, VITELLI, FECTEAU, MOONEN, TEPLER
Amends: 5 MRSA §12004-G, 5 MRSA §2041

Legislative Document
No. 1499
S.P. 461
In Senate, April 4, 2019
An Act To Establish the Maine Prescription Drug Affordability 
Board
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by President JACKSON of Aroostook.
Cosponsored by Speaker GIDEON of Freeport and
Senators: CLAXTON of Androscoggin, FOLEY of York, GRATWICK of Penobscot, 
SANBORN, H. of Cumberland, VITELLI of Sagadahoc, Representatives: FECTEAU of 
Biddeford, MOONEN of Portland, TEPLER of Topsham.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA c. 167 is enacted to read:
CHAPTER 167
MAINE PRESCRIPTION DRUG AFFORDABILITY BOARD
§2041.  Maine Prescription Drug Affordability Board established
1.  Board established.  The Maine Prescription Drug Affordability Board, as 
established in section 12004-G, subsection 14-I and referred to in this chapter as "the 
board," shall carry out the purposes of this chapter.
2.  Membership.  The board has 5 members with expertise in health care economics 
or clinical medicine, who are appointed as follows:
A.  Two members are appointed by the President of the Senate.  The President of the 
Senate shall also appoint one alternate board member who will participate in 
deliberations of the board in the event a member appointed by the President of the 
Senate elects to be recused as provided in subsection 8;
B.  Two members are appointed by the Speaker of the House of Representatives.  The 
Speaker of the House of Representatives shall also appoint one alternate board 
member who will participate in deliberations of the board in the event a member 
appointed by the Speaker of the House of Representatives elects to be recused as 
provided in subsection 8; and
C.  One member is appointed by the Governor.  The Governor shall also appoint one 
alternate board member who will participate in deliberations of the board in the event 
the member appointed by the Governor elects to be recused as provided in subsection 
8.
3.  Terms.  Members are appointed to 5-year terms.  Of the initial appointees, the 
member appointed by the Governor serves an initial term of 5 years, one member 
appointed by the President of the Senate and one member appointed by the Speaker of the 
House of Representatives serves an initial term of 4 years and one member appointed by 
the President of the Senate and one member appointed by the Speaker of the House of 
Representatives serves an initial term of 3 years.
4.  Quorum.  A majority of board members constitutes a quorum.
5.  Chair.  The Governor shall name the chair.
6.  Meetings.  The board shall meet in public session at least every 6 weeks to review 
prescription drug information submissions. Meetings may be cancelled or postponed at 
the discretion of the chair if there are no pending submissions.
A.  Each public meeting must be announced 2 weeks in advance, and materials for 
the meeting must be made public at least one week in advance.
B.  Each public meeting must provide opportunity for comment from the public in 
attendance at the meeting, and the board shall provide the opportunity for the public 
to submit written comments on pending decisions.
C.  The board may allow expert testimony at public meetings and any meeting 
conducted in executive session as permitted by paragraph F.
D.  The board shall publicly deliberate on whether to conduct a full cost review of a 
prescription drug pursuant to this chapter.
E.  The board shall publicly review a prescription drug cost analysis and take a public 
vote on whether to impose a cost or payment limit on payors for a prescription drug.
F.  The board may meet in executive session, except that any decision of the board 
must be made in public.
7.  Public access to data.  All information submitted to the board relating to a 
prescription drug price notice and prescription drug cost review is available to the public, 
except for proprietary information that is designated by the board as confidential upon 
application of the person submitting the information.  After public notice and comment, 
the board shall establish parameters for what is considered proprietary information and 
designated confidential, including specific consideration for information submitted 
related to a prescription drug not yet available in the market.
8.  Conflicts of interest.  The following provisions govern any conflict of interest for 
a member of the board or advisory council established pursuant to subsection 11 or staff 
or contractor of the board.
A.  When appointing a member of the board or the advisory council established 
pursuant to subsection 11, the appointing authority shall consider any conflict of 
interest disclosed by the prospective member.  A member shall elect to be recused 
from any board activity in the case in which the member or an immediate family 
member of the member has a conflict of interest directly related to the prescription 
drug under review.  For the purposes of this paragraph, "conflict of interest" means an 
association, including a financial or personal association, that has the potential to bias 
or have the appearance of biasing an individual's decisions in matters related to the 
board or the conduct of the board's activities.
B.  A board member or staff or contractor to the board with a conflict of interest with 
regard to a prescription drug under review shall elect to be recused from the review.  
For purposes of this paragraph, "conflict of interest" means any instance in which a 
member of the board or an immediate family member has received or could receive 
either of the following:
(1)  A direct financial benefit of any amount deriving from the results or findings 
of a study or determination by or for the board; or
(2)  A financial benefit from individuals or companies that own or manufacture 
prescription drugs, services or items to be studied by the board that in the 
aggregate exceeds $5,000 per year. For purposes of this subparagraph, "financial 
benefit" includes honoraria, fees, stock or other financial benefit and the current 
value of the member's or immediate family member's already existing stock 
holdings, in addition to any direct financial benefit deriving from the results or 
findings of a review conducted under this section.
C.  A conflict of interest must be disclosed in the following manner:
(1)  By the board in the employment of board senior staff;
(2)  By the Governor, President of the Senate or Speaker of the House of 
Representatives when appointing members to the board and advisory council 
established pursuant to subsection 11;
(3)  By the board, describing any recusals as part of any final decision resulting 
from a review of a prescription drug; and
(4)  By the 5th day after a conflict is identified or, if a public meeting of the 
board will occur within that 5-day period, in advance of the public meeting.
D.  Conflicts of interest must be publicly posted on the website of the board. The 
information disclosed must include the type, nature and magnitude of the interests of 
the individual involved, except to the extent that the individual elects to be recused 
from participation in any activity with respect to which the potential conflict exists.
E.  The board, the advisory council established pursuant to subsection 11, a member 
of the board or staff of or any contractor to the board may not accept gifts, bequests 
or donations of services or property that suggest a conflict of interest or have the 
appearance of creating bias in the work of the board or advisory council.
F.  A member of the advisory council established pursuant to subsection 11 who 
accepts a gift, bequest or donation of services or property that suggests a conflict of 
interest or has the appearance of creating a bias in the work of the advisory council 
shall disclose the gift, bequest or donation publicly.
9.  Staff.  The board may employ an executive director and any necessary staff. Staff 
positions and salary, to the extent feasible, must comport with state personnel rules and 
requirements.
10.  Compensation.  A member of the board or the advisory council established 
pursuant to subsection 11 is entitled to legislative per diem and reimbursement for 
expenses as provided in section 12004-G, subsection 14-I.
11.  Advisory council.  An 11-member advisory council is established to advise the 
board on prescription drug cost issues and represent stakeholder views in accordance with 
this subsection.
A.  The advisory council members must be selected based on their knowledge of one 
or more of the following: the pharmaceutical business model; practice of medicine or 
clinical knowledge and training; patients' perspectives; health care cost trends and 
drivers; clinical and health services research; or the state health care marketplace 
generally.
B.  Members of the advisory council are appointed as follows:
(1)  Four members are appointed by the President of the Senate: one member 
representing physicians; one member representing nurses; one member 
representing hospitals; and one member representing health insurers;
(2)  Four members are appointed by the Speaker of the House of Representatives: 
one member representing a statewide health care advocacy coalition; one member 
representing a statewide advocacy coalition for seniors; one member with 
expertise in health services research specializing in prescription drugs; and one 
member representing the public; and
(3)  Three members are appointed by the Governor: one member representing 
pharmaceutical manufacturers; one member representing employers; and one 
member representing pharmacists.
C.  Members of the advisory council are appointed to 3-year terms.
D.  The Governor shall name the chair, and the chair shall designate a cochair from 
among the other members of the advisory council.
§2042.  Required manufacturer notice of introductory price and price increases
1.  Patented prescription drug.  A prescription drug manufacturer shall notify the 
board if the manufacturer is increasing the wholesale acquisition cost of a patent-
protected brand-name prescription drug by more than 10% or by more than $3,000 per 
course of treatment during any 12-month period or if the manufacturer intends to 
introduce to market a brand-name prescription drug that has a wholesale acquisition cost 
of $30,000 per year or per course of treatment.  The notice must be provided in writing at 
least 30 days prior to the planned effective date of the increase or introduction and 
include a justification as detailed in subsection 5.
2.  Biosimilar drugs.  A prescription drug manufacturer shall notify the board if the 
manufacturer intends to introduce to market a biosimilar drug that has a wholesale 
acquisition cost that is not at least 15% lower than the referenced brand biologic at the 
time the biosimilar drug is introduced to market.  The notice must be provided in writing 
at least 30 days prior to the planned effective date of the increase or introduction and 
include a justification as detailed in subsection 5.
3.  Generic prescription drugs and off-patent sole source brand-name 
prescription drugs.  A prescription drug manufacturer shall notify the board if the 
manufacturer is increasing the wholesale acquisition cost of a generic or off-patent sole 
source brand-name prescription drug by more than 25% or by more than $300 per course 
of treatment during any 12-month period or if the manufacturer intends to introduce to 
market a generic prescription drug that has a wholesale acquisition cost of $1,200 or more 
annually. The notice must be provided in writing at least 30 days prior to the planned 
effective date of the increase or introduction and include a justification as detailed in 
subsection 5.
4.  Other drugs requiring notice to board.  After consultation with the advisory 
council, the board shall require a prescription drug manufacturer to provide notice to the 
board as described in this section for other prescription drugs that create challenges to 
affordability for the state health care system.
5.  Justification.  As part of the notice required by a manufacturer under this section, 
the manufacturer shall justify the proposed price increases or introductory price specified 
in this section by providing all documents and research related to the manufacturer's 
selection of the price increase or introductory price, including, but not limited to, life 
cycle management; net average price in the State that is net of all price concessions but 
does not include in-kind concessions; market competition and context; projected revenue; 
and, if available, the estimated value and cost-effectiveness of the prescription drug.
§2043.  Criteria for selection of prescription drugs for review of cost
1.  Public comment.  The board shall keep the public informed about notices 
provided by manufacturers as required under section 2042.  The board shall provide the 
public an opportunity to request board review of the cost of any prescription drug that is 
the subject of a notice under section 2042.
2.  Role of chair.  The board chair shall review the public comments under 
subsection 1 and decide whether to undertake a review of a particular prescription drug 
that is the subject of a notice under section 2042.  The chair may decide that the board 
will undertake a review in the absence of public comments.
3.  Role of board members.  A board member may request a vote on whether to 
undertake a review under subsection 2 if there is not consensus with the decision of the 
chair.
§2044.  Determining excess costs to payors and consumers
1.  Review of excess costs.  Once a decision has been made to undertake a cost 
review pursuant to section 2043, the review undertaken by the board must determine if 
appropriate utilization, fully consistent with the federal Food and Drug Administration 
label or consistent with standard medical practice, of a prescription drug has led or will 
lead to excess costs for health care systems in the State.  For the purposes of this section, 
"excess costs" means:
A.  Costs of appropriate utilization of a prescription drug that exceed the therapeutic 
benefit relative to other therapeutic options or alternative treatments; or
B.  Costs of appropriate utilization of a prescription drug that are not sustainable to 
public and private health care systems over a 10-year time frame.
2.  Phase one determination.  The board may consider the following factors in 
determining cost and excess cost:
A.  The price at which the prescription drug has been or will be sold in the State;
B.  The average monetary price concession, discount or rebate the manufacturer 
provides to payors in the State or is expected to provide to payors in the State as 
reported by manufacturers;
C.  The price at which therapeutic alternatives have been or will be sold in the State;
D.  The average monetary price concession, discount or rebate the manufacturer 
provides to payors in the State or is expected to provide to payors in the State for 
therapeutic alternatives;
E.  The cost to payors based on patient access consistent with federal Food and Drug 
Administration labeled indications or consistent with standard medical practice;
F.  The effect on patient access resulting from the cost of the prescription drug 
relative to insurance benefit design;
G.  The current or expected value of manufacturer-supported, drug-specific, patient 
access programs;
H.  The relative financial effects on health, medical and other social services costs, as 
can be quantified and compared to baseline effects of existing therapeutic 
alternatives; and
I.  Other such factors determined relevant by the board.
3.  Phase 2 determination.  If, after considering the factors in subsection 2, the board 
is unable to determine if a prescription drug will produce or has produced excess costs, 
the board may consider the following:
A.  Manufacturer research and development costs, as shown on the manufacturer's 
federal tax filing for the most recent tax year, multiplied by the ratio of manufacturer 
sales in the State to United States sales;
B.  That portion of direct to consumer marketing costs eligible for favorable federal 
tax treatment in the most recent tax year that are specific to the prescription drug 
under review and that are multiplied by the ratio of total manufacturer sales in the 
State to total manufacturer United States sales for the prescription drug under review;
C.  Gross and net manufacturer revenues for the most recent tax year; and
D.  Any additional factors determined by the board relevant to the circumstances, as 
may be proposed by the manufacturer.
§2045.  Board determinations, compliance and remedies
1.  Rate setting.  In the event the board finds that the cost of the prescription drug 
under review pursuant to section 2043 creates excess costs as defined in section 2044, 
subsection 1 for payors and consumers, the board shall establish the rate of 
reimbursement that must be billed and paid by payors and pharmacies, health care 
providers administering prescriptions, wholesalers, distributors and uninsured and insured 
consumers.
2.  Compliance with rate setting.  The failure to bill and pay for a prescription drug 
at the rate set by the board under subsection 1 constitutes a violation of this chapter and 
must be referred to the Attorney General for enforcement.  Upon a finding of 
noncompliance with the board requirements, the Attorney General may pursue any 
remedy available under civil and criminal law.  The Attorney General may not consider a 
person in noncompliance with this chapter if a payor obtains price concessions from a 
manufacturer that result in a payor's net cost being lower than the rate established by the 
board.  The Attorney General shall provide guidance to stakeholders concerning activities 
that could be considered noncompliant and payment transactions in which prescription 
drug costs exceed the board-established limit.
3.  Compliance with reporting.  The failure of a manufacturer to submit a notice 
under section 2042 constitutes a violation of this chapter and must be referred to the 
Attorney General for enforcement.  Upon a finding of noncompliance with the board 
requirements, the Attorney General may pursue any remedy available under civil law.
§2046.  Appeals
1.  Appeals.  A person affected by a decision of the board may appeal the decision 
within 30 days.  The full board shall consider the appeal and render a decision within 60 
days.
2.  Judicial review.  A decision of the board after appeal is subject to judicial review.
§2047.  Annual reports
Beginning January 1, 2021, and annually thereafter, the board shall report to the 
Governor, the Legislature and the public on general prescription drug price trends, the 
number of manufacturers required to provide notice under section 2042 because of 
prescription drug pricing decisions and the number of prescription drugs that were subject 
to board review and analysis, including the results of that analysis, as well as the number 
and disposition of appeals and judicial reviews.
Sec. 2.  5 MRSA §12004-G, sub-§14-I is enacted to read:
14-I.  
SUMMARY
This bill creates the Maine Prescription Drug Affordability Board to determine the 
reasonableness of the costs for certain prescription drug products.  The bill requires 
prescription drug manufacturers to notify the board when the introductory price or 
proposed price increase for a brand-name or generic drug reaches a specified threshold.  
The board is directed to review the information submitted by manufacturers to justify the 
price or increase.
The bill requires the board to have a public process for each prescription drug 
required to be reviewed based on certain criteria.  The board is directed to determine if 
the cost to the health care system of appropriate utilization of a drug is commensurate 
with its benefit to the system and whether the drug is affordable to state residents.  If the 
board finds that the cost in the State is not affordable to state health care systems and 
Health care
Maine Prescription 
Drug Affordability 
Board and advisory 
council
Legislative Per 
Diem and Expenses
MRSA §2041
state residents, the board is authorized to establish a cost or payment rate for the drug to 
which all state programs, local governments, licensed commercial health plans, including 
state marketplace plans, licensed pharmacies, wholesalers and distributors must abide.  
These covered entities are prohibited from paying more for the drugs than the board-
established rate.