DEPARTMENT OF REGULATORY AGENCIES Division of Insurance PRESCRIPTION DRUG AFFORDABILITY BOARD 3 CCR 702-9 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ Part 1 GENERAL PROVISIONS 1.1 Authority The statutory authority for this rule includes but is not limited to section 10-16-1403(5), C.R.S. Scope and Purpose The purpose of this rule is to provide necessary definitions of terms used throughout the rules. Defined terms are capitalized where they appear in the rules, to let the reader know to refer back to these definitions. When a term is used in a conventional sense, and is not intended to be a defined term, it is not capitalized.

1.1 Definitions “Affordability Review” means a review of a prescription drug performed by the Board pursuant to section 10-16-1406(3)-(7), C.R.S., to determine whether use of the Prescription Drug consistent with the labeling approved for Prescription Drug by the FDA or with standard medical practice is unaffordable for Colorado consumers.

“Aggrieved Person” means a Person who has suffered actual loss or injury or is being exposed to potential loss or injury to legitimate interest including, but not limited to, business and economic interests. “Board” has the same meaning as set forth in section 10-16-1401(7), C.R.S. “Board Staff” means any individual employed by the Division of Insurance providing support to and/or doing work on behalf of the Board.

“Days” means calendar days.

“Person” includes an individual, limited liability company, partnership, corporation, association, county, and public or private organization of any character other than an agency. “Prescription Drug” has the same meaning as set forth in section 10-16-1401(19), C.R.S. “Upper Payment Limit” has the same meaning as set forth in section 10-16-1401(23), C.R.S. 1 CODE OF COLORADO REGULATIONS 3 CCR 702-9 Division of Insurance Part 2 PRESCRIPTION DRUG AFFORDABILITY BOARD APPEALS 2.1 Authority The statutory authority for this rule includes but is not limited to section 10-16-1408, C.R.S. Scope and Purpose The purpose of this rule is to establish the process and timeline for an Aggrieved Person to file an appeal under section 10-16-1408, C.R.S., to the Prescription Drug Affordability Board. 2.1 Appeals A. Filing an Appeal. Any Aggrieved Person may appeal an initial decision by the Board to establish a specific Upper Payment Limit pursuant to section 10-16-1407, C.R.S., by filing via electronic mail to dora_ins_pdab@state.co.us, a written appeal with the Board within sixty (60) days after the Board’s initial decision to establish a specific Upper Payment Limit. 1. Any party who fails to properly file a written appeal within the time provided in these rules shall be deemed to have waived the right to an appeal.

2. The appeal may not include information not provided to the Board at or prior to the time the Board decision was made, unless the Aggrieved Person demonstrates good cause for providing new information not previously provided to the Board at or prior to the Board decision being made.

a. Good cause shall include newly discovered information that the Aggrieved Person could not, with reasonable diligence, have discovered and provided to the Board as part of the rulemaking record for establishing a specific upper payment limit.

b. An Aggrieved Person shall clearly identify new information not previously provided to the Board at or prior to the Board decision being made in its written appeal. The Board reserves the right to not consider such new information if it finds the Aggrieved Person did not demonstrate good cause. B. Appeal. A written appeal from the Board’s initial decision to establish a specific Upper Payment Limit shall include:

1. Name of the Aggrieved Person.

2. A statement giving the basis and grounds for the appeal. 3. Citations to the rulemaking record providing support for the appeal. 4. Requested relief.

C. Appeals are limited to Initial Decisions to Establish Specific Upper Payment Limits. Nothing in this rule creates a right to an appeal from selection by the Board of a Prescription Drug for an Affordability Review, a finding regarding a Prescription Drug’s unaffordability, or selection by the Board of an unaffordable Prescription Drug to establish an Upper Payment Limit for the Prescription Drug.

2 CODE OF COLORADO REGULATIONS 3 CCR 702-9 Division of Insurance D. Multiple Appeals. Where more than one Aggrieved Person appeals an initial decision by the Board, the Board shall consolidate all of the appeals into a single matter and consider all issues raised by the Aggrieved Person(s). The Board shall notify all Aggrieved Persons that their appeals have been consolidated.

E. Procedures for Reviewing Appeals.

1. The Board shall notify the Aggrieved Person and all persons on the rulemaking docket via electronic mail that the Board received the appeal. 2. The Board may further solicit the views of the Aggrieved Person or request a response be filed by Board Staff.

3. Within sixty (60) days of an Aggrieved Person filing an appeal or the Board consolidating the appeals of more than one Aggrieved Person, whichever is later, the Board will meet in public session to consider the appeal and issue a final written decision regarding the appeal.

F. Final Decision by the Board. Within sixty (60) days of an Aggrieved Person filing an appeal or the Board consolidating the appeals of more than one Aggrieved Person, whichever is later, the Board shall consider the appeal and issue a final decision regarding the appeal. If no appeal is filed, then the Board’s initial decision becomes a final decision pursuant to section 10-16-1408(3), C.R.S. Once the Board has a final decision, the Board shall determine whether to adopt a regulation establishing the Upper Payment Limit and may adopt, modify, or withdraw its initial decision regarding the upper payment limit including the effective date of the Upper Payment Limit.

G. Judicial Review.

1. Upon issuance of a final decision regarding the initial decision to establish a specific Upper Payment Limit, an Aggrieved Person may petition for judicial review in the district court in the city and county of Denver pursuant to section 24-4-106, C.R.S. 2. Upon adopting a regulation establishing an Upper Payment Limit, an Aggrieved Person may petition for judicial review in the district court in the city and county of Denver pursuant to section 24-4-106, C.R.S.

Part 5 REPORTING REQUIREMENTS FOR USE OF SAVINGS 5.1 Reporting Requirements for Use of Savings A. Authority The statutory authority for this part 5 is sections 10-16-1410(3) and 10-16-1403(5), C.R.S. B. Scope and Purpose The purpose of this part 5 is to establish a formula and process for carriers issuing health benefit plans to calculate savings attributable to the establishment of an upper payment limit (UPL) by the Prescription Drug Affordability Board (Board) and document their use of savings for the purposes of complying with section 10-16-1410(1), C.R.S., and establish the process by which state entities and carriers that issue a health benefit plan or optional participating plans shall submit reports to the Board describing savings achieved during the preceding plan year pursuant to section 10-16-1410(2), C.R.S. 3 CODE OF COLORADO REGULATIONS 3 CCR 702-9 Division of Insurance C. Reporting Requirements for Savings Attributable to Upper Payment Limits 1. On or before March 15, 2023 and each year after, each carrier, state entity, and optional participating plan subject to the requirements of section 10-16-1410, C.R.S., shall submit one report to the Board describing the savings achieved during the preceding plan year for each prescription drug for which the Board has established a UPL. For carriers, this report shall include the elements set forth in subsections C.2 and C.3. For state entities and optional participating plans, the report shall include the elements set forth in section C.3.

a. If the Board has not established any upper payment limits, a carrier, state entity, and optional participating plan is not required to submit a report. b. If the Board has established upper payment limits but a carrier, state entity, or optional participating plan did not make any reimbursements for any of the prescription drugs for which there is a UPL, then a carrier, state entity, or optional participating plan shall not submit a report, but shall notify the Board that they did not reimburse pursuant to a UPL.

2. Carrier Use of Savings Formula Carriers shall provide the Board with aggregated claims savings, cost-sharing savings, and premium savings, for each prescription drug with a UPL for each plan ID the carrier offered in the preceding plan year.

Claims savings are calculated and reported by determining the difference between utilization and cost of a prescription drug with a UPL compared to the estimated utilization and cost of the prescription drug without the UPL.

Cost-sharing savings and premium savings are calculated and reported in a manner that demonstrates how carriers utilized any savings generated for a health benefit plan from a prescription drug’s UPL to reduce costs to consumers, prioritizing the reduction of out-of- pocket costs.

Estimated total claims savings (C.2.a.x) must be approximately equal to the sum of both total estimated total cost-sharing savings (C.2.b.vi.) and estimated total premium savings (C.2.c.vi.). Carriers shall provide a narrative description of any discrepancies between estimated total claims savings and the sum of estimated total cost-sharing savings and estimated total premium savings.

a. Calculation of Carrier Claims Savings from Upper Payment Limits: Each carrier shall provide to the Board the following information for each prescription drug with a UPL using the “Prescription Drug Affordability Board Carrier Use of Savings Template” spreadsheet located on the Board’s website. i. The utilization of each prescription drug with a UPL in the preceding plan year, expressed as the total utilization per 1000 members per year and report for each prescription drug with a UPL the reported measurement, such as “per treatment”, “per dose”, “per 30-day supply”; 4 CODE OF COLORADO REGULATIONS 3 CCR 702-9 Division of Insurance ii. The estimated utilization of each prescription drug assuming there was no upper payment limit in the preceding plan year, expressed as the total estimated utilization per 1000 members per year and report for each prescription drug with a UPL the reported measurement, such as “per treatment”, “per dose”, “per 30- day supply”. The carrier shall provide the calculations for how the estimated utilization per 1000 members per year were determined along with a narrative description;

iii. The cost per utilization for each prescription drug with a UPL; iv. The estimated cost per utilization of each prescription drug assuming there was no upper payment limit in the preceding plan year. The carrier shall provide the calculations for how the estimated costs per utilization were determined along with a narrative description, including an explanation of any estimated trend used to determine the estimated cost; v. Total cost per member per month for each prescription drug with a UPL; vi. Estimated total cost per member per month without a UPL for each prescription drug with a UPL;

vii. Estimated total savings per member per month for each prescription drug with a UPL;

viii. Estimated total claims savings, per member per month for all prescription drugs with a UPL; and ix. Estimated total claims savings for all prescription drugs with a UPL. b. Reduction of Consumer Out-of-Pocket Costs Resulting from Carrier Claims Savings. Each carrier shall provide to the Board the following information for each prescription drug with a UPL using the “Prescription Drug Affordability Board Carrier Use of Savings Template” spreadsheet located on the Board’s website.

i. Whether each prescription drug with a UPL is subject to consumer copay or coinsurance;

ii. Cost-sharing amount for each prescription drug with a UPL that the consumer is responsible for, prior to the consumer satisfying their out-of- pocket maximum;

iii. Estimated cost-sharing amount for the prescription drug assuming there was no upper payment limit in the preceding plan year. The carrier shall provide the calculations for how the estimated cost-sharing was determined along with a narrative description, including if the estimated cost-sharing was based on cost sharing from a previous year, and any trend assumptions, if applicable;

iv. Estimated total cost-sharing savings for each prescription drug with a UPL;

v. Estimated cost-sharing savings, per member per month for all prescription drugs with a UPL; and 5 CODE OF COLORADO REGULATIONS 3 CCR 702-9 Division of Insurance vi. Estimated total cost-sharing savings for all prescription drugs with a UPL. c. Reduction of Consumer Premiums Resulting from Carrier Claims Savings. Each carrier shall provide to the Board the following information for each prescription drug with a UPL using the “Prescription Drug Affordability Board Carrier Use of Savings Template” spreadsheet located on the Board’s website. i. Total allowed paid claims amount for each prescription drug with a UPL; ii. Estimated total allowed paid claims amount without a UPL for each prescription drug with a UPL;

iii. Premium savings per member per month due to implementation of a UPL for each prescription drug with a UPL;

iv. Total premium impact expressed as a percentage due to implementation of the UPL for each prescription drug with a UPL;

v. Estimated total premium savings, per member per month for all prescription drugs with a UPL; and vi. Estimated total premium savings for all prescription drugs with a UPL. 3. Savings Description Report Carriers, state entities, and optional participating plans shall prioritize the reduction of out-of-pocket costs for consumers and provide a detailed analysis and description of the out-of-pocket cost savings achieved during the preceding plan year for each prescription drug for which the Board has established a UPL. The analysis shall include at a minimum:

a. An explanation of how total claims savings were achieved; b. An explanation of how total claims savings were used to reduce out-of-pocket costs for prescription drugs including prescription drugs subject to an upper payment limit and prescription drugs not subject to an upper payment limit, and, as appropriate, any reductions in premiums; and c. Any changes made to the plan formulary resulting from the Board establishing a UPL, including removing or adding prescription drugs to the formulary or changing tiering of a prescription drug.

D. Confidentiality Reports submitted to the Board pursuant to section 10-16-1410(1)-(3), C.R.S., may contain trade secret or confidential commercial or financial information such that the information is not subject to the Colorado Open Records Act, as determined after review by the Board. A carrier, state entity, and optional participating plan that submits a report pursuant to this part 5 shall clearly identify any such information in its report that it asserts is not public as “confidential” and provide a justification for the assertion of confidentiality. Any information not marked as confidential or otherwise confidential under state law may be disclosed pursuant to the Colorado Open Records Act. 6 CODE OF COLORADO REGULATIONS 3 CCR 702-9 Division of Insurance _________________________________________________________________________ Editor’s Notes History New rules Parts 1, 2 eff. 03/30/2022.

Part 5 eff. 10/15/2022.

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