An Act to Reduce Prescription Drug Costs by Requiring Reference-based Pricing
Maine Legislature, Session 131, LD 1829
Committee Amendment CA_A_S613 (Senate)
Amends: 5 MRSA §2041, 5 MRSA §2042

COMMITTEE AMENDMENT" /1 " to S.P. 745, L.D. 1829, "An Act to Reduce 
Prescription Drug Costs by Requiring Reference-based Pricing" 
Amend the bill by striking out the title and substituting the following: 
'An Act to Direct the Maine Prescription Drug Affordability Board to Assess 
Strategies to Reduce Prescription Drug Costs and to Take Steps to Implement 
Reference-based Pricing' 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 5 MRSA §2041, sub-§2, as repealed and replaced by PL 2021, c. 293, Pt. 
A, §5, is amended to read: 
2. Membership. 
The board has~ 2. members with expertise in health policy, health 
care data, health care economics or clinical medicine, who may not be affiliated with or 
represent the interests of a pharmaceutical manufacturer or a public payor, as that teim is 
defined in section 2042, and 1tYho are appointed as follows: 
A. Two members 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 7, paragraph B; 
B. Two members 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 paiticipate 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 7, paragraph B; an-a 
C. One member 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 
7, paragraph B,; and 
COMMITTEE AMENDMENT 
Ros· 
COMMITTEE AMENDMENT" (1 "to S.P. 745, L.D. 1829 ($ laf:)) 
D. The executive director of the Maine Health Data Organization, or the executive 
director's designee, who serves as an ex officio nonvoting member. 
Sec. 2. 5 MRSA §2041, sub-§9, as repealed and replaced by PL 2021, c. 293, Pt. 
A, §5, is amended to read: 
9. Compensation. A Except for the member under subsection 2, paragraph D, a 
member of the board and a member of the advisory council appointed pursuant to 
subsection 10, paragraph L are entitled to legislative per diem and reimbursement for 
expenses as provided in section 12004-G, subsection 14-I. 
Sec. 3. 5 MRSA §2041, sub-§10, as repealed and replaced by PL 2021, c. 293, Pt. 
A, §5, is amended to read: 
10. Advisory council. 
A 12-member advisory council is established to advise the 
board on establishing annual spending targets pursuant to section 2042, subsection 1 and 
determining methods for meeting those spending targets pursuant to section 2042, 
subsection 3. The advisory council consists of: 
A. The Governor or the governor's designee; 
B. The Commissioner of Administrative and Financial Services or the commissioner's 
designee; 
C. The Commissioner of Corrections or the commissioner's designee; 
D. The Commissioner of Health and Human Services or the commissioner's designee; 
E. The Attorney General or the Attorney General's designee; 
F. The Executive Director of Employee Health and Benefits, within the Department 
of Administrative and Financial Services, Bureau of Human Resources, or the 
executive director's designee; 
G. A representative from the Maine &ate Service Employees Association, appointed 
by the Governor, based on a nomination by the association; 
H. 
A representative from the Maine Education Association, appointed by the 
Governor, based on a nomination by the association; 
I. A representative from the Maine Municipal Association, appointed by the Governor, 
based on a nomination by the association; 
J. A representative from the University of Maine System, appointed by the Governor, 
based on a nomination by the system; 
K. A representative from the Maine Community College System, appointed by the 
Governor, based on a nomination by the system; and 
L. A representative of consumer interests, appointed by the Governor, who serves a 
3-year term. 
Sec. 4. 5 MRSA §2041, sub-§12, as repealed and replaced by PL 2021, c. 293, Pt. 
A, §5, is repealed. 
Sec. 5. 5 MRSA §2042, as repealed and replaced by PL 2021, c. 293, Pt. A, §5, is 
amended to read: 
§2042. Powers and duties of the board 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" fl" to S.P. 745, L.D. 1829 (,5-(.Q/3) 
The board has the following powers and duties. 
1. Preseription drug spending targets. 
The board has the following powers and 
duties. For the purposes of this section, the tenn "public payer" means any division of state, 
county or municipal government that administers a health plan for employees of that 
division of state, county or municipal government or an association of state, county or 
municipal employers that administers a health plan for its employees, except for the 
MaineCare program. The board shall: 
A. 
Beginning for the year 2021 and in consultation ·with the advisory council 
established under section 2041, subsection 10, determine annual spending targets for 
prescription drugs purchased by public payers based upon a 10 year rolling average of 
the medical care services component of the United States Department of Labor, Bureau 
of Labor Statistics Consumer Price Index medical care services inde~( plus a reasonable 
percentage for inflation and minus a spending target determined by the board for 
pharmacy savings; 
B. 
Detennine spending targets on specific prescription drugs that may cause 
affordability challenges to enrollees in a public payer health plan; and 
C. Determine \Yhich public payers are likely to exceed the spending targets determined 
under paragraph A. 
1-A. Strategies to reduce costs of prescription drugs. The board shall: 
A. Review prescription drug spending and utilization data to identify causes of high 
spending or rising spending affecting public and private payors and impacting 
consumers; 
B. Solicit public input to identify cost-related barriers to accessing prescription drugs; 
and 
C. Assess strategies to reduce the cost of prescription drugs and reduce the rate of 
growth in prescription drug spending and to reduce cost barriers for consumers. The 
review of strategies must include consideration of the strategies' likely impact on 
consumers and overall health care costs and the feasibility of implementing such 
strategies. At a minimum, the board shall assess the following strategies: 
(1) Empowering the board to assess the affordability of drugs and to establish 
upper payment limits; 
(2) 
Implementing reference-based pricing tied to the Medicare drug price 
negotiation program established in United States Public Law 117-169 (August 16. 
2022); 
(3) Implementing new methods for the purchase of prescription drugs by public 
payors, including group purchasing and prescription drug formula1y alignment; 
( 4) Implementing transparency requirements regarding discounts and rebates in 
prescription drug costs and regulating supply chain entities, including but not 
limited to phatmacy benefits managers; 
(5) Regulating insurance to reduce out-of-pocket costs for prescription drugs; 
(6) Establishing spending targets for prescription drugs that could be applied to 
one or more segments of the state-regulated commercial insurance market; 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" A 
"to S.P. 745, L.D. 1829 { S, (e 13) 
(7) Developing opportunities for engagement with providers and other health care 
professionals to disseminate information about prescription drug costs and pricing: 
and 
(8) Aligning the payment for prescription drugs with actual drug acquisition costs, 
except for prescription drugs obtained under federal discount programs. 
1-B. Other states' experiences. To accomplish the duties under subsection 1-A, the 
board shall consider and review the experiences of other states, including the role of 
prescription drug affordability boards established in other states that are authorized to 
assess affordability of prescription drugs and to establish upper payment limits or 
reference-based pricing requirements. 
1-C. Upper payment limits. The board may set upper payment limits for prescription 
drugs as follows. 
A. No later than Januaiy 1, 2026, the board shall establish by rule a methodology for 
setting upper payment limits in accordance with this subsection. Rules adopted 
pursuant to this paragraph are major substantive rules as defined in chapter 375, 
subchapter 2-A. 
B. At a minimum, the methodology adopted by the board by rule under paragraph A 
must take into consideration: 
(1) The cost of the prescription drug: 
(2) Whether the Medicare program has negotiated a maximum fair price for the 
prescription drug through the Medicare drug price negotiation program established 
in United States Public Law 117-169 (August 16, 2022): 
(3) An estimate of the potential savings to the State if an upper payment limit is 
required for one or more of the prescription drugs for which the Medicare program 
has negotiated a maximum fair price: 
(4) Whether an upper payment limit would improve affordability and generate 
savings to the State's health care system and the extent to which an upper payment 
limit would reduce barriers of cost and access to prescription drugs for public and 
private payors and consumers in the State: 
(5) A process for selecting, on an annual basis, the maximum fair prices for drugs 
negotiated by the Medicare program through the Medicare drug price negotiation 
program for which the board has established an upper payment limit: 
(6) The applicability of upper payment limits to public and private payors in the 
State, including a process to voluntarily opt in to upper payment limits for plans 
regulated under the federal Employee Retirement Income Security Act of 1974: 
(7) The applicability of upper payment limits to purchases of prescription drugs in 
the State, including consideration of the supply chain for prescription drugs: and 
(8) Other relevant criteria that the board determines necessary after input from the 
advisory council established by section 2041. subsection 10 or other stakeholders. 
C. Beginning Januaiy 1. 2026 and as long as rules have been finally adopted pursuant 
to paragraph A. the board may establish upper payment limits for public or private 
payors for one or more of the first 10 prescription drugs for which the Medicare 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" fl" to S.P. 745, L.D. 1829 (s-la /7) 
program has negotiated maximum fair prices through the Medicare drug price 
negotiation program established in United States Public Law 117-169 (August 16, 
2022). Beginning Januaiy 1, 2027 and annually thereafter, the board may establish 
upper payment limits for one or more prescription drugs for which the Medicare 
program has negotiated maximum fair prices through the Medicare drug price 
negotiation program. 
D. The board may suspend an upper payment limit if it determines that there is a 
shortage of the prescription drug in the State. 
E. The board shall publish on its publicly accessible website a list of prescription drugs 
for which it has set an upper payment limit. 
F. The board shall determine an effective date for an upper payment limit set by the 
board. The upper payment limit must apply to a prescription drug subject to an upper 
payment limit on or after the effective date established by the board. 
G. The establishment of an upper payment limit constitutes final agency action subject 
to judicial review pursuant to chapter 375, subchapter 7. 
2. Prescription drug spending data. The board may consider the following data to 
accomplish its duties under this section: 
A. A public payer's prescription Prescription drug spending data, which the not 
available through the Maine Health Data Organization. The board may request data 
under this paragraph from 3rd-party administrator administrators or insurer for the 
public payer's health plan shall provide to the board on behalf of the public payor upon 
request insurers notwithstanding any provision of law to the contrary, including: 
(1) Expenditures and utilization data for prescription drugs for each plan offered 
by a public payor; 
(2) The fonnulary for each plan offered by a pubtie payor and prescription drugs 
common to each fonnulary; 
(3) 
Pha1macy benefit management benefits manager services and other 
administrative expenses of the prescription drug benefit for each plan offered by a 
public payor; and 
( 4) Enrollee cost sharing for each plan offered by a public payor and other 
available inf01mation regarding costs to consumers, including premiums and out-
of-pocket costs; and 
B. Data compiled by the Maine Health Data Organization under Title 22, chapter 1683. 
Prescription drug spending data provided to the board under this subsection is confidential 
to the same extent it is confidential while in the custody of the entity that provided the data 
to the board. 
3. Recommendations. Based upon the prescription drug spending data received 
assessment conducted under subsection 2-1-A, paragraph C, the board, in consultation 1.vith 
a representative of each public payor identified under subsection 1, paragraph A, shall 
determine methods for the public payor to meet the spending targets established under 
subsection 1. The board shall determine whether the following methods reduce costs to 
individuals purchasing prescription drugs through a public payor and allov,· public payers 
COMMITTEE AMENDMENT 
ROS 
COMMITTEE AMENDMENT" 4 
"to S.P. 745, L.D. 1829 { yl.Q f ~ 
to meet the spending targets established under subsection 1: shall recommend one or more 
strategies for adoption by the State in any annual report to the Legislature pursuant to 
subsection 4. Any recommendation of one or more strategies by the board must include 
guidance for implementation, enforcement and necessary funding. 
A. Negotiating specific rebate amounts on the prescription drugs that contribute most 
to spending that exceeds the spending targets; 
B. Changing a formulary 1,vhen sufficient rebates cannot be secured under paragraph 
At 
C. Changing a formulary with respect to all of the prescription drugs of a manufacturer 
\Vithin a fonnulary when sufficient rebates cannot be secured under paragraph l ... ; 
D. Establishing a common prescription drug formulaf)' for all public payers; 
B. Prohibiting health insurance can-iers in the State from offering on their fo1mularies 
a prescription drug or any of the prescription drugs manufactured by a particular 
manufacturer 1.vhen the methods described in paragraph B or C are implemented; 
F. Purchasing prescription drugs in bulk or through a single purchasing agreement for 
use among public payers; 
G. Collaborating with other states and state prescription drug purchasing consortia to 
purchase prescription drugs in bulk or to jointly negotiate rebates; 
H. Allowing health insurance carriers providing coverage to small businesses and 
individuals in the State to participate in the public payer prescription drug benefit for 
a-feet 
I. Procuring common ex.pert services for public payers, including but not limited to 
pharmacy benefit management serYices and actuarial services; and 
J. Any other method the board may determine. 
4. Report. The board shall report its recommendations, including prescription drug 
spending targets, and the progress of implementing those recommendations pursuant to 
subsection 3 to the joint standing committee of the Legislature having jurisdiction over 
health coverage and insurance matters no later than October 1, 2020 and on January 30th 
annually thereafter. The joint standing committee may report out legislation based upon the 
report. 
Sec. 6. 
Appropriations and allocations. The following appropriations and 
allocations are made. 
OFFICE OF AFFORDABLE HEALTH CARE 
Office of Affordable Health Care Z320 
Initiative: Provides funding for contracts required to meet the new requirements of the 
Maine Prescription Drug Affordability Board. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
Office of Affordable Health Care Z320 
2023-24 
$0 
$0 
COMMITTEE AMENDMENT 
2024-25 
$1,100,000 
$1,100,000 
ROS 
COMMITTEE AMENDMENT" fj" to S.P. 745, L.D. 1829 ( S, l.ti/3) 
Initiative: Provides funding to establish one Public Service Coordinator II position and one 
Planner II position to administer the new requirements of the Maine Prescription Drug 
Affordability Board. 
GENERAL FUND 
POSITIONS - LEGISLATIVE COUNT 
Personal Services 
All Other 
GENERAL FUND TOTAL 
OFFICE OF AFFORDABLE HEALTH CARE 
DEPARTMENT TOTALS 
GENERAL FUND 
DEPARTMENT TOTAL-ALL FUNDS 
2023-24 
0.000 
$0 
$0 
$0 
2023-24 
$0 
$0 
2024-25 
2.000 
$232,358 
$3,985 
$236,343 
2024-25 
$1,336,343 
$1,336,343 
Amend the bill by relettering or renumbering any nonconsecutive Patt letter or section 
number to read consecutively. 
SUMMARY 
This amendment replaces the bill and makes the following changes to the laws 
governing the Maine Prescription Drug Affordability Board. 
1. It adds the executive director of the Maine Health Data Organization as an ex officio 
nonvoting member. 
2. It removes the authority of the board to recommend that public payors pay an 
assessment to supp01t the administration of the board. 
3. It changes the scope of the duties of the board to focus on an assessment of strategies 
to reduce prescription drug costs, reduce the rate of growth in prescription drug spending 
and reduce cost batTiers for consumers. 
4. It requires the board to review in its next annual repo1t how states with authority to 
establish upper payment limits have implemented that authority, to recommend whether 
the board should have comparable authority and to include an estimate of savings to the 
State if the State applies reference-based pricing to the first 10 prescription drugs for which 
the Medicare program has negotiated maximum fair prices through the Medicare drug price 
negotiation program. 
The amendment also authorizes the Maine Prescription Drug Affordability Board to 
set upper payment limits to be paid by public and private payors in the State for prescription 
drugs. The amendment requires the board to adopt, no later than January 1, 2026, rules 
establishing a methodology for setting upper payment limits and designates those rules as 
major substantive rules, which require approval of the Legislature before being finally 
adopted. The methodology adopted by the board must take into consideration certain 
minimum criteria, including the cost of the prescription drug; whether the Medicare 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" /J "to S.P. 745, L.D. 1829 (5-&/3) 
program has negotiated a maximum fair price for the prescription drug through the 
Medicare drug price negotiation program; an estimate of the potential savings to the State 
if an upper payment limit is required for one or more of the prescription drugs for which 
the Medicare program has negotiated a maximum fair price; whether an upper payment 
limit would improve affordability and generate savings to the State's health care system 
and the extent to which an upper payment limit would reduce ba11'iers of cost and access to 
prescription drugs for public and private payors and consumers in the State; a process for 
selecting, on an annual basis, the maximum fair prices for drugs negotiated by the Medicare 
program through the Medicare drug price negotiation program for which the board has 
established an upper payment limit; the applicability of upper payment limits to public and 
private payors in the State, including a process to voluntarily opt in to upper payment limits; 
the applicability of upper payment limits to purchases of prescription drugs in the State, 
including consideration of the supply chain for prescription drugs; and other relevant 
criteria that the board determines is necessary after input from the board's advisory council 
or other stakeholders: 
Beginning January 1, 2026 and as long as the major substantive rules have been 
adopted, the amendment authorizes the Maine Prescription Drug Affordability Board to 
establish upper payment limits for public or private payors for one or more of the first 10 
prescription drugs for which the Medicare program has negotiated maximum fair prices 
through the Medicare drug price negotiation program. Beginning Januaiy 1, 2027 and 
annually thereafter, the board is authorized to establish upper payment limits for one or 
more prescription drugs for which the Medicare program has negotiated maximum fair 
prices through the Medicare drug price negotiation program. The amendment provides that 
the board may suspend an upper payment limit if it dete1mines that there is a shortage of 
the prescription drug in the State. The amendment requires the board to dete1mine an 
effective date for an upper payment limit set by the board and to publish on its publicly 
accessible website a list of prescription drugs for which it has set an upper payment limit. 
The amendment specifies that the establishment of an upper payment limit constitutes final 
agency action subject to judicial review pursuant to the Maine Revised Statutes, Title 5, 
chapter 375, subchapter 7. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03/01/24 ;::k?ae 
LD 1829 
LR 735(02) 
An Act to Reduce Prescription Drug Costs by Requiring Reference-based Pricing 
Fiscal Note for Bill as Amended by Committee Amendment "4' (5-<ilf5) 
Committee: Health Coverage, Insurance and Financial Services 
Net Cost (Savings) 
General Fund 
ppropriations/ Allocations 
General Fund 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2023-24 
FY 2024-25 
$0 
$1,336,343 
$0 
$1,336,343 
Projections 
FY 2025-26 
$1,147,961 
$1,147,961 
Projections 
FY 2026-27 
$1,160,160 
$1,160,160 
This bill expands the charter of the Prescription Drug Affordability Board (PDAB) and directs the board to assess 
strategies to reduce prescription drug costs arid to take steps to implement reference-based pricing. There are many 
changes th.at could be identified by the PDAB, such as, setting upper payment limits, referenced-based pricing or 
potential regulation of prescription drug cost-sharing requirements. The bill includes General Fund appropriations to 
the Office of Affordable Health Care of $1,336,343 in fiscal year 2024-25 to establish one Public Se1'1ice Coordinator 
II position, one Planner II position and for contracts to administer the new requirements of the Maine Prescription 
Drug Affordability Board. 
The potential changes identified in the bill wo.uld have a large future biennium impact to the State Employee Health 
Plan, but it is not known at this time which, if any, of these changes may be made by the PDAB and the potential 
future impact to the SEHP cannot be determined at this time. 
LR0735(02) - Fiscal Note - Page 1 of 1