Bill Summary: Raised Bill No. 1202 - Prescription Drug Affordability

• Prohibits purchasers (state entities, health benefit plans, and participating ERISA plans) from paying more than the maximum fair price set by Medicare under the federal Inflation Reduction Act of 2022 for referenced prescription drugs, effective January 1, 2024.

• Requires purchasers to calculate savings from maximum fair price compliance and apply those savings to reduce prescription drug costs for insured individuals, with annual reporting to the Insurance Department by January 15th.

• Prohibits manufacturers and distributors from withdrawing referenced drugs from the state market to avoid revenue losses, with penalties up to $500,000 or annual savings amount (whichever is greater) and requires 180 days' notice before any withdrawal.

• Establishes a Prescription Drug Payment Evaluation Committee with 14+ members to recommend upper payment limits on at least 8 prescription drugs based on comparisons with other states and countries, with first report due December 1, 2023.

• Modifies drug listing procedures under the Office of Health Strategy, lowering cost-increase thresholds from 20% to 16% annually and from $60 to $40 for course of therapy, and adds public comment period for preliminary drug lists.