An Act Requiring Reference-based Pricing to Reduce Prescription Drug Costs
Maine Legislature, Session 131, LD 1816
Committee: Health Coverage, Insurance and Financial Services
Sponsors: PERRY, BAILEY, ARFORD

Legislative Document
No. 1816
H.P. 1162
House of Representatives, April 27, 2023
An Act Requiring Reference-based Pricing to Reduce Prescription 
Drug Costs
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative PERRY of Calais.
Cosponsored by Senator BAILEY of York and
Representative: ARFORD of Brunswick.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA c. 603, sub-c. 1-C is enacted to read:
SUBCHAPTER 1-C
REFERENCE-BASED PRESCRIPTION DRUG PRICING
§2689.  Reference-based prescription drug pricing
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A. "Carrier" has the same meaning as in Title 24-A, section 4301-A, subsection 3.
B. "ERISA plan" means a plan qualified under the federal Employee Retirement 
Income Security Act of 1974.
C.  "Health plan" has the same meaning as in Title 24-A, section 4301-A, subsection 
7.
D.  "Maximum fair price" means the maximum rate for a prescription drug published 
by the Secretary of the United States Department of Health and Human Services 
pursuant to United States Public Law 117-169, Section 1195 (2022).
E.  "Participating ERISA plan sponsor" means an ERISA plan sponsor that has elected 
to participate in the requirements and restrictions of this section as described in 
subsection 3.
F.  "Prescription drug" has the same meaning as in Title 32, section 13702-A, 
subsection 30.
G.  "Price applicability period" means the period of time defined in United States Public 
Law 117-169, Section 1191 (2022).
H. "Referenced drugs" means prescription drugs subject to a maximum fair price. 
I.  "State entity" means any agency of State Government that purchases prescription 
drugs on behalf of the State for a person whose health care is paid for by the State, 
including any agent, vendor, fiscal agent, contractor or other party acting on behalf of 
the State.  "State entity" does not include the medical assistance program established 
under 42 United States Code, Section 1396 et seq.
2.  Payment in excess of maximum fair price prohibited.  The following practices 
are prohibited.
A. It is a violation of this section to dispense, deliver or administer to a consumer in 
the State in person, by mail or by another means a prescription drug for a cost that 
exceeds the maximum fair price during the price applicability period. 
B.  It is a violation of this section for a state entity, carrier offering a health plan or 
participating ERISA plan sponsor to purchase referenced drugs or seek reimbursement 
for referenced drugs to be dispensed or delivered to a consumer in the State, whether 
directly or through a distributor, for a cost higher than the maximum fair price. 
Contracts entered into by a state entity, carrier or participating ERISA plan sponsor 
and a 3rd party for the purchase of prescription drugs must expressly provide that rates 
paid for referenced drugs may not exceed the maximum fair price. 
C.  It is a violation of this section for a retail pharmacy licensed in the State to purchase 
for sale or seek reimbursement for a prescription drug to be dispensed or delivered to 
a consumer whose health care is provided by a state entity, health plan or participating 
ERISA plan at a cost that exceeds the maximum fair price. The maximum fair price 
does not include a dispensing fee paid to a retail pharmacy, and this chapter may not 
be construed to prevent a retail pharmacy from receiving a dispensing fee above the 
maximum fair price. 
3. ERISA plan sponsor participation.  An ERISA plan sponsor may elect to 
participate in the provisions of this section. An ERISA plan sponsor that elects to 
participate in the requirements of this section shall notify the Superintendent of Insurance 
in writing by December 15th of each year.
4. Rules.  The Superintendent of Insurance may adopt rules to carry out the purposes 
of this subchapter. Rules adopted pursuant to this subsection are routine technical rules 
under Title 5, chapter 375, subchapter 2-A.
5.  Registered agent and office within the State.  An entity that sells, distributes, 
delivers or offers for sale any prescription drug in the State shall maintain a registered agent 
and office within the State.
6.  Use of savings.  The following provisions govern the use of savings generated as a 
result of the requirements in subsection 2.
A.  Any savings generated as a result of the requirements in subsection 2 during the 
price applicability period must be used to reduce costs to consumers. A state entity, 
carrier or participating ERISA plan sponsor shall calculate its savings and use the 
savings directly to reduce costs for its members. In determining how to use savings in 
order to comply with this subsection, a state entity, health plan or participating ERISA 
plan shall consider strategies that promote greater health equity by addressing health 
disparities across communities. 
B.  No later than April 1st of each calendar year, each state entity, health plan or 
participating ERISA plan subject to this section shall submit to the Superintendent of 
Insurance a report describing the savings achieved for each referenced drug for the 
previous calendar year and how those savings were used to achieve the requirements 
under paragraph A, including if the savings were used to promote greater health equity 
by addressing health disparities across communities. 
C. The Superintendent of Insurance shall adopt and implement rules setting forth the 
method for calculating savings and the format and manner for submitting the report 
under paragraph B.
7.  Enforcement.  Each violation of this section is subject to a fine of $1,000. Each 
individual transaction in violation of subsection 2 is a separate violation.  The Attorney 
General is authorized to enforce the provisions of this section on behalf of any state entity 
or consumer of prescription drugs. The refusal of a manufacturer or distributor of 
prescription drugs to negotiate in good faith as described in subsection 8 is a valid 
affirmative defense in any enforcement action brought under this subchapter. 
8.  Prohibition on withdrawal of referenced drugs for sale.  The following 
provisions govern the withdrawal of a referenced drug.
A.  A manufacturer or distributor of a referenced drug may not withdraw that drug from 
sale or distribution within the State for the purpose of avoiding the effect of the rate 
limitations set forth in subsection 2.
B.  A manufacturer that intends to withdraw a referenced drug from sale or distribution 
from within the State shall provide a notice of withdrawal in writing to the 
Superintendent of Insurance and to the Attorney General at least 180 days prior to the 
withdrawal.
C. A manufacturer or distributor of a referenced drug may not refuse to negotiate in 
good faith with a payor or seller of prescription drugs a price that does not exceed the 
maximum fair price for that drug. 
D.  The Superintendent of Insurance shall assess a penalty of $500,000 or the amount 
of annual savings determined by the superintendent in accordance with subsection 6, 
whichever is greater, on any manufacturer or distributor of a referenced drug, that the 
superintendent determines has withdrawn a referenced drug from sale or distribution 
in the State in violation of paragraph A or B or has failed to negotiate in good faith in 
violation of paragraph C.
Sec. 2. Purpose; legislative findings.  The purpose of this Act is to protect the 
safety, health and economic well-being of the people of this State by safeguarding them 
from the negative and harmful effects of excessive and unconscionable prices for 
prescription drugs. The Legislature finds that:
1.  Access to prescription drugs is necessary for the people of this State to maintain or 
acquire good health;
2.  Excessive prices negatively affect the ability of the people of this State to obtain 
prescription drugs, and price increases that exceed reasonable levels endanger the health 
and safety of the people of this State;
3.  Excessive prices for prescription drugs threaten the economic well-being of the 
people of this State and endanger their ability to pay for other necessary and essential goods 
and services, including housing, food and utilities;
4.  Excessive prices for prescription drugs contribute significantly to a dramatic and 
unsustainable rise in health care costs and health insurance costs and threaten the overall 
ability of the people of this State to obtain health insurance coverage and maintain or 
acquire good health; and
5.  Excessive prices for prescription drugs contribute significantly to rising costs to the 
State for health care provided and paid for through health insurance programs for public 
employees, including employees of the State, municipalities and counties, school districts, 
institutions of higher education and retirees whose health care costs are funded by public 
programs, thereby threatening the ability of the State to fund those programs adequately 
and further threatening the ability of the State to fund other programs necessary for the 
public good and safety, such as public education and public safety.
Based on findings in subsections 1 to 5, the Legislature finds that excessive prices for 
prescription drugs threaten the safety and well-being of the people of this State and finds it 
necessary to act in order to protect the people of this State from the negative effects of 
excessive costs.
SUMMARY
This bill requires that a state entity, health plan or participating plan qualified under 
the federal Employee Retirement Income Security Act of 1974 may not purchase 
prescription drugs to be dispensed or delivered to a consumer of this State at a cost that 
exceeds the maximum fair price.  The maximum fair price of a prescription drug is the 
maximum rate for a drug determined by the Secretary of the United States Department of 
Health and Human Services under the federal Medicare program. Any savings generated 
as a result must be used to reduce costs to consumers.