Illinois General Assembly - Full Text of SB3108
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Full Text of SB3108  103rd General Assembly



State of Illinois
2023 and 2024


Introduced 2/2/2024, by Sen. David Koehler


New Act
30 ILCS 105/5.1015 new

    Creates the Health Care Availability and Access Board Act. Establishes the Health Care Availability and Access Board to protect State residents, State and local governments, commercial health plans, health care providers, pharmacies licensed in the State, and other stakeholders within the health care system from the high costs of prescription drug products. Contains provisions concerning Board membership and terms; staff for the Board; Board meetings; circumstances under which Board members must recuse themselves; and other matters. Provides that the Board shall perform the following actions in open session: (i) deliberations on whether to subject a prescription drug product to a cost review; and (ii) any vote on whether to impose an upper payment limit on purchases, payments, and payor reimbursements of prescription drug products in the State. Permits the Board to adopt rules to implement the Act and to enter into a contract with a qualified, independent third party for any service necessary to carry out the powers and duties of the Board. Creates the Health Care Availability and Access Stakeholder Council to provide stakeholder input to assist the Board in making decisions as required by the Act. Contains provisions concerning Council membership, member terms, and other matters. Provides that the Board shall adopt the federal Medicare Maximum Fair Price as the upper payment limit for a prescription drug product intended for use by individuals in the State. Requires the Attorney General to enforce the Act. Effective 180 days after becoming law.

LRB103 39220 CES 69370 b





SB3108LRB103 39220 CES 69370 b

1    AN ACT concerning health.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the Health
5Care Availability and Access Board Act.
6    Section 5. Definitions. In this Act:
7    "Biologic" means a drug that is produced or distributed in
8accordance with a biologics license application approved under
942 U.S.C. 447.502.
10    "Biosimilar" means a drug that is produced or distributed
11in accordance with a biologics license application approved
12under 42 U.S.C. 262(k)(3).
13    "Board" means the Health Care Availability and Access
15    "Brand name drug" means a drug that is produced or
16distributed in accordance with an original new drug
17application approved under 21 U.S.C. 355(c). "Brand name drug"
18does not include an authorized generic drug as defined by 42
19CFR 447.502.
20    "Council" means the Health Care Availability and Access
21Stakeholder Council.
22    "Generic drug" means:
23        (1) a retail drug that is marketed or distributed in



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1    accordance with an abbreviated new drug application,
2    approved under 21 U.S.C. 355(j);
3        (2) an authorized generic drug as defined by 42 CFR
4    447.502; or
5        (3) a drug that entered the market before 1962 that
6    was not originally marketed under a new drug application.
7    "Manufacturer" means an entity that:
8        (1) owns the patent to a prescription drug product; or
9        (2) enters into a lease with another manufacturer to
10    market and distribute a prescription drug product under
11    the entity's own name;
12        (3) is the labeled entity of the generic product at
13    the point of manufacture; and
14        (4) sets or changes the wholesale acquisition cost of
15    the prescription drug product it manufactures or markets.
16    "Prescription drug product" means a brand name drug, a
17generic drug, a biologic, or a biosimilar.
18    Section 10. Health Care Availability and Access Board.
19    (a) There is established a Health Care Availability and
20Access Board. The purpose of the Board is to protect State
21residents, State and local governments, commercial health
22plans, health care providers, pharmacies licensed in the
23State, and other stakeholders within the health care system
24from the high costs of prescription drug products. The Board
25is a public body and is an instrumentality of the State. The



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1Board is an independent unit of State government. The exercise
2by the Board of its authority under this Act is an essential
4    (b)(1) The 5 members of the Board and 3 alternate members
5shall be appointed by the Governor with the advice and consent
6of the Senate.
7    (2) The Board membership must include individuals with
8demonstrated expertise in health care economics,
9pharmaceutical market, and clinical medicine. A member or an
10alternate member may not be an employee of, a Board member of,
11or a consultant to a manufacturer or trade association for
13    (3) Any conflict of interest, including whether the
14individual has an association, including a financial or
15personal association, that has the potential to bias or has
16the appearance of biasing an individual's decision in matters
17related to the Board or the conduct of the Board's activities,
18shall be considered and disclosed when appointing members and
19alternate members to the Board.
20    (c) The term of a member or an alternate member is 5 years,
21except that the terms of the initial members and alternate
22members shall be staggered as required by the terms provided
23for members in Section 55. Initial Board members shall be
24appointed within 4 months after the effective date of this
25Act. The Board may begin its work if there is a delay in
26appointments to the Health Care Availability and Access



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1Stakeholder Council created under Section 20.
2    (d) The Chair shall hire an executive director, general
3counsel, and staff for the Board. Staff of the Board shall
4receive a salary as provided in the budget of the Board. A
5member of the Board: (i) may receive compensation as a member
6of the Board; and (ii) is entitled to reimbursement for
8    (e) A majority of the members of the Board shall
9constitute a quorum for the purposes of conducting the
10business of the Board.
11    (f) Subject to the requirements of this subsection, the
12Board shall meet in open session at least 4 times per year to
13review prescription drug product information. Information
14concerning the location, date, and time of the meeting must be
15made publicly available in accordance with the Open Meetings
16Act. The Chair may cancel or postpone a meeting if there are no
17prescription drug products to review.
18    The Board shall perform the following actions in open
19session: (i) deliberations on whether to subject a
20prescription drug product to a cost review under subsection
21(f) of Section 25; and (ii) any vote on whether to impose an
22upper payment limit on purchases, payments, and payor
23reimbursements of prescription drug products in the State. The
24Board may otherwise meet in closed session to discuss
25proprietary data and information.
26    The Board shall provide public notice of each Board



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1meeting at least 3 weeks in advance of the meeting. Materials
2for each Board meeting shall be made available to the public at
3least 3 weeks in advance of the meeting. The Board shall
4provide an opportunity for public comment at each open meeting
5of the Board. The Board shall provide the public with the
6opportunity to provide written comments on pending decisions
7of the Board. The Board may allow expert testimony at Board
8meetings, including when the Board meets in closed session.
9    (g)(1) Members of the Board shall recuse themselves from
10decisions related to a prescription drug product if the
11member, or an immediate family member of the member, has
12received or could receive any of the following:
13        (A) a direct financial benefit of any amount deriving
14    from the result or finding of a study or determination by
15    or for the Board; or
16        (B) a financial benefit from any person who owns,
17    manufactures, or provides prescription drug products,
18    services, or items to be studied by the Board that in the
19    aggregate exceeds $5,000 per year.
20    A disclosure of interests under this paragraph shall
21include the type, nature, and magnitude of the interests of
22the member or his or her immediate family member involved.
23    For the purposes of this paragraph, "financial benefit"
24includes honoraria, fees, stock, the value of the member's or
25immediate family member's stock holdings, and any direct
26financial benefit deriving from the finding of a review



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1conducted under this Act.
2    (2) A conflict of interest shall be disclosed in advance
3of the first open meeting after the conflict is identified or
4within 5 days after the conflict is identified. A conflict of
5interest shall be disclosed by:
6        (A) the Board when hiring Board staff;
7        (B) the appointing authority when appointing members
8    and alternate members to the Board and members to the
9    Council; and
10        (C) the Board when a member of the Board is recused in
11    any final decision resulting from a review of a
12    prescription drug product.
13    (3) A conflict of interest disclosed under this Section
14shall be posted on the website of the Board unless the Chair of
15the Board recuses the member from any final decision resulting
16from a review of a prescription drug product.
17    (4) Members and alternate members of the Board, Board
18staff, and third-party contractors may not accept any gift or
19donation of services or property that indicates a potential
20conflict of interest or has the appearance of biasing the work
21of the Board.
22    Section 15. Powers and duties of the Board. In addition to
23the powers set forth elsewhere in this Act, the Board may:
24        (1) adopt rules for the implementation of this Act;
25    and



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1        (2) enter into a contract with a qualified,
2    independent third party for any service necessary to carry
3    out the powers and duties of the Board.
4    Unless permission is granted by the Board, a third party
5hired by the Board may not release, publish, or otherwise use
6any information to which the third party has access under its
8    Section 20. Health Care Availability and Access
9Stakeholder Council.
10    (a) The Health Care Availability and Access Stakeholder
11Council is created. The purpose of the Council is to provide
12stakeholder input to assist the Board in making decisions as
13required under this Act. The Council consists of 15 members
14appointed within 4 months after the effective date of this Act
15as follows:
16        (1) 3 members appointed by the Speaker of the House of
17    Representatives;
18        (2) 2 members appointed by the Minority Leader of the
19    House of Representatives;
20        (3) 3 members appointed by the President of the
21    Senate;
22        (4) 2 members appointed by the Minority Leader of the
23    Senate; and
24        (5) 5 members appointed by the Governor.
25    (b) The members of the Council shall have knowledge in one



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1or more of the following:
2        (1) the pharmaceutical business model;
3        (2) supply chain business models;
4        (3) the practice of medicine or clinical training;
5        (4) consumer or patient perspectives;
6        (5) clinical and health services research; or
7        (6) the State's health care marketplace.
8    (c) From among the membership of the Council, the Board
9Chair shall appoint one member to be Council Chair.
10    (d) The term of a member is 3 years, except that the
11initial members of the Council shall serve staggered terms as
12required by the terms provided for members in Section 55.
13    (e) A member of the Council may not receive compensation
14as a member of the Council, but is entitled to reimbursement
15for travel expenses.
16    Section 25. Drug cost affordability review.
17    (a) The Board shall limit its review of prescription drug
18products to those that are:
19        (1) brand name drugs or biologics that, as adjusted
20    annually for inflation in accordance with the Consumer
21    Price Index, have:
22            (A) a wholesale acquisition cost of $60,000 or
23        more per year or course of treatment if less than a
24        year; or
25            (B) a wholesale acquisition cost increase of



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1        $3,000 or more in any 12-month period;
2        (2) biosimilar drugs that have a wholesale acquisition
3    cost that is not at least 20% lower than the referenced
4    brand biologic at the time the biosimilars are launched,
5    and that have been suggested for review by the members of
6    public, medical professionals, and other stakeholders;
7        (3) generic drugs that, as adjusted annually for
8    inflation in accordance with the Consumer Price Index,
9    have a wholesale acquisition cost of at least $100 for a
10    30-day supply or course of treatment less than 30 days and
11    which increased by 200% or more during the immediately
12    preceding 12-month period, as determined by the difference
13    between the resulting wholesale acquisition cost and the
14    average of the wholesale acquisition cost reported over
15    the immediately preceding 12 months; and
16        (4) other prescription drug products that may create
17    affordability challenges for the State health care system
18    or patients, including, but not limited to, drugs to
19    address public health emergencies.
20    The Board is not required to identify every drug to
21identify every prescription drug that meets the criteria of
22this subsection.
23    (b) The Board shall solicit public input on prescription
24drugs thought to be creating affordability challenges that
25meet the parameters of paragraphs (1) through (4) of
26subsection (a). The Board shall determine whether to conduct a



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1full affordability review for the proposed prescription drugs
2after compiling preliminary information about the cost of the
3product, patient cost sharing for the product, health plan
4spending on the product, stakeholder input, and other
5information decided by the Board.
6    (c) If the Board conducts a review of the cost and
7affordability of a prescription drug product, the review shall
8determine whether use of the prescription drug product that is
9fully consistent with the labeling approved by the United
10States Food and Drug Administration or standard medical
11practice has led or will lead to affordability challenges for
12the State health care system or high out-of-pocket costs for
14    (d) The information to conduct an affordability review may
15include, but is not limited to, any document and research
16related to the manufacturer's selection of the introductory
17price or price increase of the prescription drug product,
18patient assistance program or programs specific to the
19product, estimated or actual manufacturer product price
20concessions in the market, net product cost to State payers,
21and other information as determined by the Board.
22    (e) Failure of a manufacturer to provide the Board with
23the information for an affordability review does not affect
24the authority of the Board to conduct such a review.
25    (f) If the Board finds that the spending on a prescription
26drug product reviewed under this Section has led or will lead



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1to an affordability challenge, the Board shall establish an
2upper payment limit considering exceptional administrative
3costs related to the distribution of the drug in the State.
4    (g) The upper payment limit applies to all purchases and
5payor reimbursements of the prescription drug product intended
6for use by individuals in the State, in person, by mail, or by
7other means.
8    (h) Any information submitted to the Board in accordance
9with this Section shall be subject to public inspection only
10to the extent allowed under the Freedom of Information Act.
11    (i) This Section may not be construed to prevent a
12manufacturer from marketing a prescription drug product
13approved by the United States Food and Drug Administration
14while the product is under review by the Board.
15    Section 30. Protections and other Board considerations.
16    (a) The Board shall examine how an upper payment limit
17would affect 340B providers.
18    (b) In determining whether a drug creates an affordability
19challenge or determining an upper payment limit amount, the
20Board may not use cost-effectiveness analyses that include the
21cost-per-quality adjusted life year or a similar measure to
22identify subpopulations for which a treatment would be less
23cost-effective due to severity of illness, age, or preexisting
24disability. In addition, for any treatment that extends life,
25if the Board uses cost-effectiveness results, the Board must



SB3108- 12 -LRB103 39220 CES 69370 b

1use results that weigh the value of all additional lifetime
2gained equally for all patients no matter their severity of
3illness, age, or preexisting disability.
4    (c) An upper payment limit is effective no sooner than 6
5months after it has been announced.
6    (d) State-regulated health plans shall inform the Board of
7how any upper payment limit-related cost savings are directed
8to the benefit of enrollees, with a priority on enrollee cost
10    (e) The upper payment limit shall not be inclusive of the
11pharmacy dispensing fee or provider administration fee.
12    (f) State licensed independent pharmacies may not be
13reimbursed less than the upper payment limit.
14    (g) The Board shall adopt the Medicare Maximum Fair Price
15as defined in 42 U.S.C. 1320f(c)(3) for a prescription drug as
16the upper payment limit for that prescription drug product
17intended for use by individuals in this State, per subsection
18(g) of Section 25.
19    Section 35. Remedies. The Attorney General shall have
20authority to enforce this Act. The Attorney General may pursue
21any available remedy under State law when enforcing this Act.
22    Section 40. Appeal of Board decisions.
23    (a) A person aggrieved by a decision of the Board may
24request an appeal of the decision within 30 days after the



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1finding of the Board.
2    (b) The Board shall hear the appeal and make a final
3decision within 60 days of the hearing.
4    (c) Any person aggrieved by a final decision of the Board
5may petition for judicial review in accordance with the
6provisions of the Administrative Review Law.
7    Section 45. Health Care Availability and Access Board
8Fund. The Health Care Availability and Access Board Fund is
9created as a special fund in the State treasury. The Board
10shall be funded by an annual assessment on all manufacturers
11whose products are sold in the State. All funds collected by
12the Board from the assessments shall be deposited into the
13Fund. The Fund shall be used only to provide funding for the
14Board and for the purposes authorized under this Act,
15including any costs expended by any State agency to implement
16this Act. All interest earned on moneys in the Fund shall be
17credited to the Fund. This Section may not be construed to
18prohibit the Fund from receiving moneys from any other source
19that does not create the appearance of a conflict of interest.
20The Board shall be established using general funds, which
21shall be repaid to the State with the assessments required
22under this Section.
23    Section 50. Reports.
24    (a) On or before December 31 of each year, the Board shall



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1submit to the General Assembly a report that includes:
2        (1) price trends for prescription drug products;
3        (2) the number of prescription drug products that were
4    subject to Board review, including the results of the
5    review and the number and disposition of appeals and
6    judicial reviews of Board decisions; and
7        (3) any recommendations the Board may have on further
8    legislation needed to make prescription drug products more
9    affordable in this State.
10    (b) On or before June 1, 2025, the Health Care
11Availability and Access Board shall submit a report to the
12General Assembly about the operation of the generic drug
13market in the United States that includes a review of
14physician-administered drugs and considers:
15        (1) the prices of generic drugs on a year-over-year
16    basis;
17        (2) the degree to which generic drug prices affect
18    insurance premiums as reported by health insurers in this
19    State or other states that collect this information;
20        (3) recent and current trends in patient cost sharing
21    for generic drugs;
22        (4) the causes and prevalence of generic drug
23    shortages; and
24        (5) any other relevant study questions.
25    Section 55. Term expiration.



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1    (a) The terms of the initial members and alternate members
2of the Health Care Availability and Access Board shall expire
3as follows:
4        (1) one member and one alternate member in 2028;
5        (2) 2 members and one alternate member in 2029; and
6        (3) 2 members, including the Chair of the Board, and
7    one alternate member in 2030.
8    (b) The terms of the initial members of the Health Care
9Availability and Access Stakeholder Council shall expire as
11        (1) 5 members in 2028;
12        (2) 5 members in 2029; and
13        (3) 5 members in 2030.
14    Section 97. Severability. If any provision of this Act or
15the application thereof to any person or circumstance is held
16invalid for any reason in a court of competent jurisdiction,
17the invalidity does not affect other provisions or any other
18application of this Act that can be given effect without the
19invalid provision or application, and for this purpose the
20provisions of this Act are declared severable.
21    Section 900. The State Finance Act is amended by adding
22Section 5.1015 as follows:
23    (30 ILCS 105/5.1015 new)



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1    Sec. 5.1015. The Health Care Availability and Access Board
3    Section 999. Effective date. This Act takes effect 180
4days after becoming law.