2019 - 2020 LEGISLATURE
March 7, 2019 - Introduced by Representatives Myers, Anderson, Subeck, Sinicki,
Vruwink, Zamarripa, Fields, Brostoff, Spreitzer, Shankland and Hebl,
cosponsored by Senators L. Taylor and Carpenter. Referred to Committee on
AB62,1,2 1An Act to create 632.863, 632.864 and 632.865 (2) (c) of the statutes; relating
manufacturer and insurer disclosure of prescription drug costs.
Analysis by the Legislative Reference Bureau
This bill imposes disclosure requirements related to prescription drug costs on
drug manufacturers and health insurers.
First, the bill requires that a manufacturer of a prescription drug whose
wholesale acquisition cost exceeds $40 notify certain purchasers of the drug,
including the state, health insurers, and pharmacy benefit managers doing business
in Wisconsin, when the cost for a course of therapy increases by more than 16 percent.
The notice must be provided at least 60 days prior to the increase to the purchasers
who have registered with the Office of the Commissioner of Insurance to receive
notification. In addition to notifying the purchasers, the manufacturer must provide
OCI with specified information about the increase, including the financial and
nonfinancial factors used to make the decision to increase the drug's cost. Under the
bill, a drug manufacturer must also notify OCI if the manufacturer releases a new
drug whose wholesale acquisition cost exceeds the specialty drug tier threshold
under the Medicare Part D program, which is currently $670 for a one-month supply.
The bill directs OCI to publish the information it receives from manufacturers about
cost increases and high-cost new drugs on its website. A manufacturer who fails to
report information to OCI may be liable for a penalty of $1,000 for each day of the
Second, the bill requires that an insurer issuing health insurance coverage in
this state annually file a report with OCI that identifies which of the plan's covered

drugs have the highest prescription rates and costs and, for large group plans,
provides information about the relationship between prescription drug costs and
premium rates. The bill directs OCI to use this information to annually compile a
report that analyzes the overall impact in this state of drug costs on health care
premiums. The report must be distributed to the legislature and published on OCI's
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB62,1 1Section 1. 632.863 of the statutes is created to read:
AB62,2,3 2632.863 Prescription drug manufacturer notifications. (1) Definitions.
3In this section:
AB62,2,74 (a) “Course of therapy” means the recommended daily dosage units of a
5prescription drug pursuant to its prescribing label as approved by the federal food
6and drug administration for 30 days or for a normal course of treatment that is less
7than 30 days.
AB62,2,98 (b) “Manufacturer” means a manufacturer of a prescription drug that is
9purchased or reimbursed by any of the following:
AB62,2,1110 1. A state or local government purchaser in Wisconsin or an entity acting on
11behalf of the state or local government.
AB62,2,1212 2. An insurer, as defined in s. 632.745 (15).
AB62,2,1313 3. A pharmacy benefit manager, as defined in s. 632.865 (1) (c).
AB62,2,1414 4. Any other purchaser identified in rules promulgated by the commissioner.
AB62,3,5 15(2) Notification to purchaser. A manufacturer of a prescription drug with a
16wholesale acquisition cost of more than $40 for a course of therapy shall notify each
17purchaser described in sub. (1) (b) 1. to 4. who registers with the commissioner to
18receive notification if the increase in the wholesale acquisition cost of the drug
19exceeds 16 percent, including the proposed increase and the cumulative increases

1that occurred within the previous 2 calendar years prior to the current year. The
2commissioner shall make available to manufacturers a list of purchasers who
3register to receive notification under this subsection. The notice shall be provided
4at least 60 days prior to the planned effective date of the increase and shall include
5all of the following:
AB62,3,66 (a) The date of the increase.
AB62,3,77 (b) The current wholesale acquisition cost of the drug.
AB62,3,98 (c) The dollar amount of the future increase in the wholesale acquisition cost
9of the drug.
AB62,3,1110 (d) A statement of whether a change or improvement in the drug necessitates
11the price increase and a description of any change or improvement.
AB62,3,15 12(3) Notification to commissioner. A manufacturer required to report an
13increase in the wholesale acquisition cost of a drug under sub. (2) shall report to the
14commissioner, at the time and in the format prescribed by the commissioner, all of
15the following information:
AB62,3,1816 (a) The amount of the increase and a description of the specific financial and
17nonfinancial factors used to make the decision to increase the cost, including an
18explanation of how the factors justify the increase.
AB62,3,2019 (b) A schedule of the manufacturer's wholesale acquisition cost increases for
20the drug during the previous 5 years.
AB62,3,2421 (c) If the drug was acquired by the manufacturer within the previous 5 years,
22the name of the company from which it was acquired, the date acquired, the purchase
23price, and the drug's wholesale acquisition cost on the date acquired, the date one
24year prior to acquisition, and the date the drug was introduced to market.
AB62,3,2525 (d) The patent expiration date of the drug if under patent.
1(e) A statement of whether the drug is a multiple source drug, an innovator
2multiple source drug, a noninnovator multiple source drug, or a single source drug,
3as each of these terms is defined in 42 USC 1396r–8 (k) (7) (A).
AB62,4,54 (f) A description of any change or improvement in the drug that necessitates
5the cost increase.
AB62,4,66 (g) The volume of sales of the drug in the United States for the previous year.
AB62,4,16 7(4) Notification for new drugs. A manufacturer that introduces a new
8prescription drug to market at a wholesale acquisition cost that exceeds the specialty
9tier threshold set by the federal centers for medicare and medicaid services under the
10Medicare Part D program shall notify the commissioner no later than 3 days after
11the release of the drug in the commercial market. A manufacturer may make this
12notification pending approval by the federal food and drug administration if
13commercial availability is expected within 3 days of approval. No later than 30 days
14after providing the notification, the manufacturer shall file with the commissioner
15a report, in a format prescribed by the commissioner, that contains all of the
AB62,4,1817 (a) A description of the marketing and pricing plans used in the launch of the
18drug in the United States and internationally.
AB62,4,1919 (b) The estimated volume of patients that may be prescribed the drug.
AB62,4,2220 (c) A statement of whether the drug was granted breakthrough therapy
21designation or priority review by the federal food and drug administration prior to
22final approval.
AB62,4,2423 (d) The date and price of acquisition if the drug was not developed by the
1(5) Limits on disclosure. A manufacturer may limit the information reported
2to the commissioner under sub. (3) or (4) to information that is in the public domain
3or publicly available.
AB62,5,8 4(6) Public disclosure of information. The commissioner shall publish the
5information it receives under subs. (3) and (4) on its Internet site within 60 days of
6receiving the information from a manufacturer. The information shall be published
7in a manner that identifies the information that is disclosed on a per-drug basis and
8may not be aggregated in a manner that does not allow identification of each drug.
AB62,5,14 9(7) Penalty. A manufacturer that fails to provide information to the
10commissioner under sub. (3) or (4) when due may be subject to a $1,000 penalty for
11each day the manufacturer fails to provide the information. The commissioner may
12reduce or waive a penalty under this subsection for good cause. The commissioner
13may commence civil proceedings to enforce this subsection if a manufacturer fails to
14provide any information required under sub. (3) or (4) when due.
AB62,2 15Section 2. 632.864 of the statutes is created to read:
AB62,5,16 16632.864 Reporting related to prescription drug costs. (1) In this section:
AB62,5,1917 (a) “Covered prescription drug” means a drug covered under a disability
18insurance policy or group health benefit plan that is dispensed at a plan pharmacy,
19network pharmacy, or mail order pharmacy for outpatient use.
AB62,5,2020 (b) “Group health benefit plan” has the meaning given in s. 632.745 (9).
AB62,5,2121 (c) “Insurer” has the meaning given in s. 632.745 (15).
AB62,5,2422 (d) “Specialty drug” means a drug whose cost exceeds the specialty tier
23threshold set by the federal centers for medicare and medicaid services under the
24Medicare Part D program.
1(2) Annually no later than October 1, an insurer shall file a report with the
2commissioner that contains all of the following information for each health benefit
3plan covering individuals in this state or eligible employees of one or more employers
4in this state:
AB62,6,55 (a) The 25 covered prescription drugs that are most frequently prescribed.