101 CMR 801.04 - Determination of Target Value

(1) General. EOHHS may determine a target value for any covered drug that meets the following requirements:

(a) The covered drug must be a high-cost drug; and

(b) The covered drug must have been the subject of a failed direct negotiation under 101 CMR 801.03(2)(b).

(2) Process for Determining Target Value.

(a) EOHHS may publicly post a proposed target value for any covered drug that meets the requirements of 101 CMR 801.04(1).

(b) At least 30 days before finalizing the proposed target value, EOHHS will afford interested persons an opportunity to present data, views or arguments in regard to the proposed target value.

(c) At the sole discretion of the Secretary, EOHHS may hold a public hearing on the proposed target value, provided that EOHHS provides notice to the public at least 30 days prior to the hearing. Any testimony at the public hearing will be given under oath.

(d) In order to provide public notice of the opportunity to comment, and advertise a public hearing, if applicable, EOHHS will, on a dedicated location of the EOHHS website, post a notice, including the following:

1. the proposed target value of the covered drug;

2. a summary of the rationale for the proposed target value;

3. a list of any third-party cost-effectiveness analysis relied on in setting the proposed target value;

4. the manner in which data, views, or arguments regarding the proposed target value may be submitted to the agency by any interested person, including the deadline for such comments; and

5. the time and place of a public hearing, if applicable.

EOHHS may file a copy of such notice with the Secretary of the Commonwealth for publication in the Massachusetts Register.

(e) Not later than concurrently with the posting of the public notice described in 101 CMR 801.04(2)(d), EOHHS will provide written notice to the manufacturer of its proposed target value, a copy of the public notice described at 101 CMR 801.04(2)(d), and will share with the manufacturer for review and input any information, analyses or reports regarding a covered drug relied on by EOHHS in developing the proposed target value described in 101 CMR 801.04(2)(a) and, if different, any information, analyses or reports regarding a covered drug relied on by EOHHS in developing any proposed supplemental rebate amount included in the offer or counteroffer described in 101 CMR 801.03(2)(b)2.

(f) Prior to finalizing the proposed target value, EOHHS will consider any comments or testimony received by the specified deadline, including any comments, clarifications, or data submitted by the manufacturer of the covered drug, and will make updates to the proposed target value, as appropriate, and consider whether to reopen negotiations with the manufacturer under 101 CMR 801.04(2)(a).

(g) After completion of the analysis described in 101 CMR 801.04(2)(f), and subject to 101 CMR 801.04(4), if applicable, EOHHS may post a final target value for the covered drug on a dedicated location of the EOHHS website, and also may file a copy of the target value with the Secretary of the Commonwealth for publication in the Massachusetts Register.

(3) Factors for Consideration.

(a) In establishing a target value for a covered drug, EOHHS may consider the following factors, as applicable:

1. Information regarding the clinical efficacy, effectiveness, and outcomes of the covered drug;

2. Information relating to the pricing of the covered drug including, but not limited to, information relating to prices paid in other countries;

3. The covered drug's net price to the Medicaid program as compared to its therapeutic benefits including, but not limited to, the seriousness and prevalence of the disease or condition that is treated by the drug, and the extent to which the drug addresses an unmet medical need or benefits particular patient subpopulations;

4. The extent of utilization or expected utilization of the covered drug within the Medicaid population;

5. The likelihood that the use of the covered drug will reduce the need for other care, reduce caregiver burden, or enhance quality of life;

6. Whether there are therapeutic equivalents of the covered drug, and the number of such equivalents available;

7. Characteristics of the drug, including means and setting of administration, dosing frequency, duration of therapy, side effects, interactions and contraindications, and potential for misuse or abuse;

8. Analyses by independent third parties, provided that EOHHS will consider, as available, the methodologies and models used in the analysis, any assumptions and potential limitations of the analysis, and outcomes for specific subpopulations, if applicable;

9. Any information supplied by the manufacturer or the public; and

10. Other appropriate measures or analysis related to the value, efficacy or outcomes of the covered drug.

(b) If EOHHS engages a third-party to provide a cost-effectiveness analysis in establishing a target value, the analysis must include:

1. a description of the methodologies and models used in the analysis;

2. any assumptions and potential limitations of the analysis; and

3. outcomes for specific subpopulations, if applicable.

(4) Opportunity to Reopen Negotiations.

(a) At any time prior to posting a final target value for a covered drug under 101 CMR 801.04(2)(g), EOHHS may reopen direct negotiations with a manufacturer by presenting the manufacturer with an updated offer or counteroffer including, at minimum, the material SRA terms desired by EOHHS, provided that the manufacturer has a reasonable opportunity to accept or reject such terms.

(b) In the event that EOHHS and the manufacturer do not execute an SRA for the covered drug after direct negotiations are reopened under 101 CMR 801.04(4)(a), EOHHS may post a final target value for the covered drug under 101 CMR 801.04(2)(g).

(c) EOHHS may also initiate a request, or consider a request by a manufacturer to reopen direct negotiations at any time prior to referring a covered drug to the HPC under 101 CMR 801.05, provided that nothing obligates EOHHS to enter into such further negotiations.

Notes

101 CMR 801.04

Adopted by Mass Register Issue 1412, eff. 3/6/2020.