(1) Under the authority of chapter 43.71C RCW, this chapter implements the Washington drug price transparency program.

(2) The purpose of the Washington drug price transparency program is to improve transparency relating to the cost and price of prescription drugs to provide accountability to the state for rising drug costs and a consumer's ability to afford prescription drugs.

(3) The authority publishes a data submission guide to the authority's website, detailing the data elements to report as required by chapter 43.71C RCW, and how to submit the data.

For the purposes of this chapter:

(1) "Authority" means the health care authority.

(2) "Calendar days" means the same as in WAC 182-526-0010.

(3) "Calendar year" means the period from January 1st to December 31st of each year.

(4) "Confidential information" means information collected by the authority according to RCW 43.71C.020 through 43.71C.080, which is not subject to public disclosure under chapter 42.56 RCW and must be held confidential by all data recipients, according to WAC 182-51-0900.

(5) "Course of treatment" means the duration of the actual administration of a drug to treat a condition.

(6) "Covered drug" means any prescription drug that:

(a) A covered manufacturer intends to introduce to market at a wholesale acquisition cost of $10,000 or more for a course of treatment lasting less than one month or a 30-day supply, whichever period is longer; or

(b) Meets all of the following:

(i) Has been introduced to market;

(ii) Is manufactured by a covered manufacturer; and

(iii) Has a wholesale acquisition cost of more than $100 for a course of treatment lasting less than one month or a 30-day supply, and, taking into account only price increases that take effect on or after October 1, 2019, the manufacturer increases the wholesale acquisition cost such that:

(A) The new wholesale acquisition cost is 20 percent higher than the wholesale acquisition cost on the same day of the month, 12 months before the date of the proposed increase; or

(B) The new wholesale acquisition cost is 50 percent higher than the wholesale acquisition cost on the same day of the month, 36 months before the date of the proposed increase.

(7) "Covered manufacturer" means a person, corporation or other entity engaged in the manufacture of prescription drugs sold in or into Washington state. "Covered manufacturer" does not include a private label distributor or retail pharmacy that sells a drug under the retail pharmacy's store label, or a prescription drug repackager.

(8) "Data" means all data provided to the authority under RCW 43.71C.020 through 43.71C.080 and any analysis prepared by the authority.

(9) "Data recipient" means an individual or entity authorized to receive data under RCW 43.71C.100.

(10) "Data submission guide" means the document that identifies the data required under chapter 43.71C RCW, and provides instructions for submitting this data to the authority, including guidance on required format for reporting, for each reporting entity.

(11) "Food and drug administration (FDA) approval date" means the deadline for the FDA to review applications for new drugs or new biologics after the new drug application or biologic application is accepted by the FDA as complete in accordance with the Prescription Drug User Fee Act of 1992 (106 Stat. 4491; P.L. 102-571).

(12) "Health plan," "health carrier," and "carrier" mean the same as in RCW 48.43.005.

(13) "Introduced to market" or "introduce to market" means to make available for purchase in Washington state.

(14) "Pharmacy benefit manager" means the same as defined in RCW 48.200.020.

(15) "Pharmacy services administrative organization" means an entity that:

(a) Contracts with a pharmacy to act as the pharmacy's agent with respect to matters involving a pharmacy benefit manager, third-party payor, or other entities, including negotiating, executing, or administering contracts with the pharmacy benefit manager, third-party payor, or other entities; and

(b) Provides administrative services to pharmacies.

(16) "Pipeline drug" means a drug or biologic product, not yet approved by the Food and Drug Administration, for which a manufacturer intends to seek initial approval from the Food and Drug Administration under an original new drug application under 21 U.S.C. Sec. 355(b) or under a biologics license application under 42 U.S.C. Sec. 262.

(17) "Prescription drug" means a drug regulated under chapter 69.41 or 69.50 RCW that is prescribed for outpatient use and distributed in a retail setting, including generic, brand name, specialty drugs, and biological products.

(18) "Private label distributor" means a firm that does not participate in the manufacture or processing of a drug but instead markets and distributes under its own trade name, and labels a drug product made by someone else.

(19) "Public domain" means information that is available to the general public, whether through internet search, Freedom of Information Act request, or through purchase or subscription, and includes information submitted to or reviewed by the Food and Drug Administration, information contained in financial statements, and information published or otherwise made available through drug information resources. "Public domain" does not include trade secrets as defined by RCW 19.108.010 and information protected by copyright law.

(20) "Qualifying price increase" means a price increase described in subsection (6)(b) of this section.

(21) "Rebate" means negotiated price concessions, discounts, however characterized, that accrue directly or indirectly to a reporting entity in connection with utilization of prescription drugs by reporting entity members including, but not limited to, rebates, administrative fees, market share rebates, price protection rebates, performance-based price concessions, volume-related rebates, other credits, and any other negotiated price concessions or discounts that are reasonably anticipated to be passed through to a reporting entity during a coverage year, and any other form of price concession prearranged with a covered manufacturer, dispensing pharmacy, pharmacy benefit manager, rebate aggregator, group purchasing organization, or other party which are paid to a reporting entity and are directly attributable to the utilization of certain drugs by reporting entity members.

(22) "Reporting entity" means carriers, covered manufacturers, health carriers, health plans, pharmacy benefit managers, and pharmacy services administrative organizations, which are required to or voluntarily submit data according to chapter 43.71C RCW.

(23) "Wholesale acquisition cost" means, with respect to a prescription drug, the manufacturer's list price for the drug to wholesalers or direct purchasers in the United States, excluding any discounts, rebates, or reductions in price, for the most recent month for which the information is available, as reported in wholesale acquisition cost guides or other publications containing prescription drug prices.

(1) A reporting entity must register with the authority and provide the required contact information as defined in the applicable data submission guide. Reregistration is required only if the contact information previously provided has changed.

(2) It is the responsibility of the reporting entity to maintain current and accurate contact information with the authority.

(3) Failure to register and provide or maintain accurate contact information with the authority may result in a reporting entity's inability to submit required data in compliance with this chapter.

(1) No later than October 16, 2020, a health carrier must submit to the authority the prescription drug cost and utilization data for calendar years 2018 and 2019, for each health plan it offered in Washington state in calendar years 2018 and 2019, following the guidelines set in the authority's applicable data submission guide.

(2) Beginning October 1, 2021, and no later than October 1st annually thereafter, a health carrier must submit to the authority the prescription drug cost and utilization data for the previous calendar year for each health plan it offered in Washington state, following the guidelines set in the authority's applicable data submission guide.

(3) A carrier may voluntarily submit the data described in subsection (1) of this section for other health plans it administers such as employer-sponsored, self-funded health plans; Taft-Hartley trust health plans; worker's compensation plans; medicare Part D plans; medicare advantage plans; or medicaid managed care plans.

(4) The authority may assess fines for not complying with the requirements in this section. See WAC 182-51-1100.

(1) No later than March 1st of each year, a pharmacy benefit manager must submit to the authority all data specified in RCW 43.71C.030, following the guidelines set in the authority's applicable data submission guide.

(2) The authority may examine or audit a pharmacy benefit manager's financial records to ensure the information submitted under this section is accurate. Information the authority acquires in an examination of financial records according to this subsection is treated as proprietary and confidential. The information collected according to this subsection is not subject to public disclosure under chapter 42.56 RCW.

(3) A pharmacy benefit manager may voluntarily submit the data described in subsection (1) of this section for other health plans it administers such as employer-sponsored, self-funded health plans; Taft-Hartley trust health plans; worker's compensation plans; medicare Part D plans; medicare advantage plans; or medicaid managed care plans.

(4) The information submitted according to this section is not subject to public disclosure under chapter 42.56 RCW.

(5) The agency may assess fines for not complying with the requirements in this section. See WAC 182-51-1100.

(1) No later than March 1st of each year, each pharmacy benefit manager must file with the authority an attestation in the format required by the authority for the preceding calendar year, stating that the pharmacy benefit manager is in compliance with this chapter.

(2) A pharmacy benefit manager must not cause or knowingly permit the use of any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading.

(1) On or before December 31, 2020, a covered manufacturer must submit to the authority all data specified in RCW 43.71C.050 and 43.71C.070, following the guidelines set in the authority's applicable data submission guide for each new covered drug introduced to market, or a covered drug that had a qualifying price increase between and including October 1, 2019, and October 15, 2020.

(2) Beginning October 16, 2020, a covered manufacturer must submit to the authority all data specified in RCW 43.71C.050 and 43.71C.070, following the guidelines set in the authority's applicable data submission guide, for each covered drug as follows:

(a) Sixty days in advance of a qualifying price increase for a covered drug already introduced to market; or

(b) Within 30 days of a new covered drug introduced to market.

(3) For any drug approved under section 505(j) of the federal Food, Drug, and Cosmetic Act as it existed on August 18, 2020, or a biosimilar approved under section 351(k) of the federal Public Health Service Act as it existed on August 18, 2020, if submitting data in accordance with subsection (2)(a) of this section is not possible 60 days before the price increase, that submission must be made as soon as known but no later than the date of the price increase.

(4) The information submitted according to this section is not subject to public disclosure under chapter 42.56 RCW.

(5) The authority may assess fines for not complying with the requirements in this section. See WAC 182-51-1100.

(1) On or before December 31, 2020, a manufacturer must submit to the authority all data specified in RCW 43.71C.060(1), following the guidelines set in the authority's applicable data submission guide for all new drug applications or biologic license applications for pipeline drugs submitted on or after October 1, 2019, through October 15, 2020, for which the manufacturer has received an FDA approval date.

(2) Beginning October 16, 2020, a manufacturer must submit to the authority all data specified in RCW 43.71C.060(1), following the guidelines set in the authority's applicable data submission guide for all new drug applications or biologic license applications for pipeline drugs submitted on or after October 16, 2020, within sixty calendar days of the manufacturer receiving the FDA approval date.

(3) The authority considers fifty thousand dollars per biennium to be a significant impact on state expenditures. Reporting entities may anticipate a request for additional information per RCW 43.71C.060(3) from the authority for products expected to exceed fifty thousand dollars per biennium. To improve efficiency in reporting, manufacturers who submit a new drug application or a biologics license application for a pipeline drug or a biologics license application for a biological product that is expected to cost the state more than fifty thousand dollars per biennium may submit the data elements in RCW 43.71C.060(3) at the same time they submit the notice of the new drug application.

(4) A manufacturer may limit the information reported according to this section to information that is in the public domain or publicly reported.

(5) The agency may assess fines for not complying with the requirements in this section. See WAC 182-51-1100.

(1) No later than October 16, 2020, and October 1st of each year thereafter, a pharmacy services administrative organization representing a pharmacy or pharmacy chain in Washington state must submit to the authority the data specified in RCW 43.71C.080 following the guidelines set in the authority's applicable data submission guide.

(2) Any pharmacy services administrative organization whose revenue is generated from flat service fees not connected to drug prices or volume, and paid by the pharmacy, is exempt from reporting, subject to audit by the authority. These organizations must petition the authority for exemption from the reporting requirements according to the frequency listed and the formatting guidelines in the authority's applicable data submission guide.

(3) The authority may assess fines for not complying with the requirements in this section. See WAC 182-51-1100.

(1) The authority provides data only after the data recipient, as defined by this chapter, has signed a nondisclosure agreement. The authority may prohibit access to or use of the data by a data recipient who violates the nondisclosure agreement.

(2) Data recipients must keep data confidential by:

(a) Accessing, using, and disclosing information only in accordance with this section and consistent with applicable statutes, regulations, and policies;

(b) Having a public policy purpose to access and use the confidential information according to chapter 43.71C RCW;

(c) Protecting all confidential information against unauthorized use, access, disclosure, or loss by employing reasonable security measures, including physically securing any computers, documents, or other media containing confidential information and viewing confidential information only on secure workstations in nonpublic areas;

(d) Destroying all confidential information when it is no longer needed to perform authorized activities; and

(e) Adhering to the confidentiality requirements in this section after the data recipient is no longer an authorized data recipient under RCW 43.71C.100.

(3) Data recipients must not:

(a) Disclose any confidential information, as defined by WAC 182-51-0100, or otherwise publicly release the confidential information;

(b) Use or disclose any confidential information for any commercial or personal purpose, or any other purpose that is not authorized in chapter 43.17C RCW;

(c) Attempt to identify people who are the subject of the confidential information;

(d) Discuss confidential information in public spaces in a manner in which unauthorized individuals could overhear;

(e) Discuss confidential information with unauthorized individuals, including spouses, domestic partners, family members, or friends;

(f) Have any conflicts of interests under the ethics in public service act that would prevent the data recipient from accessing or using confidential information; and

(g) Share information received according to this chapter with any person who is not authorized to receive confidential information as specified by this chapter.

(1) All data and data files must be submitted to the authority in accordance with the requirements in this chapter and the respective data submission guide for the respective reporting period. Data submission guides are located on the authority's website.

(2) The authority develops data submission guides and has final approval authority over them. The authority provides reporting entities the opportunity to comment on changes to data requirements in the applicable data submission guide, at least thirty days before the effective date of the change.

(3) At its discretion, the authority may grant reporting entities an extension to comply with any changes the authority makes to the data submission guides. Reporting entities must request extensions in accordance with WAC 182-51-1200.

(1) RCW 43.71C.090 allows the authority to assess a fine of up to one thousand dollars per day for failure to comply with the requirements of RCW 43.71C.020 through 43.71C.080 and the requirements of this chapter. See WAC 182-51-1300 for fines for failing to comply with reporting requirements and WAC 182-51-1400 for the amount of fines based on culpability.

(2) The authority may grant an extension of time to a reporting requirement deadline under WAC 182-51-1200.

(1) The authority may grant:

(a) An extension of time to a reporting requirement deadline; or

(b) Permission to correct a previously submitted and accepted report.

(2) Extensions.

(a) A reporting entity may request an extension of time for submitting a report or the resubmission of a report due to extenuating circumstances affecting the reporting entity's ability to submit the data by the deadline.

(b) The request for an extension must contain a detailed explanation as to the reason the reporting entity is unable to meet the reporting requirements for that period.

(c) A reporting entity must submit a request for an extension to the authority at least 30 calendar days before the applicable reporting deadline unless the requestor is unable to meet this deadline due to circumstances beyond the reporting entity's control. If unable to meet this deadline, the reporting entity must notify the authority in writing as soon as the reporting entity determines that an extension is necessary.

(d) The authority may approve a request for an extension for a period of time based on the specific circumstances or other extenuating circumstances. The authority provides written notification of the approval or denial to the requestor within 15 calendar days from when the authority receives the request from the reporting entity. If the authority does not approve a request for an extension, the written notification includes the reason for the denial.

(e) A reporting entity may not appeal the authority's decision to deny an extension.

(1) The authority may assess fines for failure to comply with the general reporting requirements of this chapter including, but not limited to, failing to report data or reporting erroneous or inaccurate data.

(2) Unless the authority has approved an extension or has received a request to correct previously submitted data, the authority may assess a fine for failure to comply with general reporting requirements contained in chapter 43.71C RCW and this chapter including, but not limited to, the following:

(a) Failure to timely submit required data files; or

(b) Failure to accurately submit all data elements.

(3) Unless the authority has approved an extension or has received a request to correct previously submitted data, the authority may assess fines for failure to comply with data file requirements outlined in the applicable data submission guide in effect for the required reporting period including, but not limited to, the following:

(a) Submitting a data file in an unapproved layout;

(b) Submitting a data element in an unapproved format;

(c) Submitting a data element with unapproved coding;

(d) Failing to submit a required data element;

(e) Failing to comply with the approved data submission schedule; or

(f) Transmitting data files using an unapproved process.

(1) In determining the amount of any fine, the authority considers the level of culpability associated with the violation. The levels of culpability, in the order of least severe to most severe, are as follows:

(a) Did not know. The reporting entity did not know and by exercising reasonable diligence, could not have known the violation had occurred.

(b) Reasonable cause. The reporting entity knew, or by exercising diligence should have known, that the violation had taken place, but the reporting entity did not act with willful neglect.

(c) Willful neglect - Corrected. The violation was due to the reporting entity's intentional failure or reckless indifference, and the violation was corrected within thirty calendar days from the date the reporting entity knew or with reasonable diligence should have known of the violation.

(d) Willful neglect - Uncorrected. The violation was due to the reporting entity's intentional failure or reckless indifference, and the violation was not corrected within thirty calendar days from the date the reporting entity knew or with reasonable diligence should have known of the violation.

(2) The fine ranges for each level of culpability and the daily cap for violations of a similar nature are as follows:

(3) Fines begin to accrue on the first day after the reporting deadline. For those reporting entities granted an extension by the authority, fines begin to accrue on the first day after the extended due date.

(4) Fines continue to accrue daily until the reporting entity comes into compliance, settles through an informal dispute resolution conference under WAC 182-51-1700, or files a formal appeal under WAC 182-51-1800.

(1) Upon failing to comply with a reporting requirement in this chapter, the authority first issues a warning notice to a reporting entity. The authority sends the warning notice to the reporting entity's last known email or physical address. The warning notice describes the failure to comply with the requirements of this chapter and gives the reporting entity thirty days to become compliant or request an extension of time to report the required data according to WAC 182-51-1200(2).

(2) When a reporting entity fails to comply with reporting requirement(s) after receiving a warning notice, the authority may assess a fine(s) as established in WAC 182-51-1400. The authority mails a preliminary notice of violation and fine(s) to the reporting entity's last known address by certified mail, return receipt requested.

(3) The preliminary notice of violation and fine(s) includes the following information:

(a) The specific reasons and criteria that support the imposition of the assessed fine(s);

(b) The legal authority that supports the imposition of a fine or fines;

(c) The amount of the fine(s) as of the date of the preliminary notice of violation and fine(s);

(d) Notice that fines will continue to accrue at the assessed daily rate, per WAC 182-51-1400, until the reporting entity either complies with the reporting requirements or settles through an informal dispute resolution conference; and

(e) An explanation of the reporting entity's right to request an informal dispute resolution conference under WAC 182-51-1700.

(1) Each reporting entity to whom the authority issues a preliminary notice of a violation and fine(s) may request an informal dispute resolution conference under WAC 182-51-1700.

(2) If the reporting entity requests an informal dispute resolution conference under WAC 182-51-1700, the reporting entity must complete the informal dispute resolution process before requesting an administrative hearing.

(3) In lieu of an informal dispute resolution conference, the reporting entity may request a formal appeal under WAC 182-51-1800 in writing, in a manner that provides proof of receipt, within 28 calendar days after receipt of the preliminary notice of violation and fine(s). Upon receipt of the reporting entity's request, the authority issues a final notice of violation and fine(s) with an explanation of the reporting entity's administrative hearing rights under WAC 182-51-1800.

(4) If the reporting entity does not request an informal dispute resolution conference or formal appeal within 28 calendar days after receipt of the preliminary notice of violation and fine(s), the authority issues a final notice of violation with an explanation of the reporting entity's administrative hearing rights under WAC 182-51-1800.

(1) A reporting entity may informally dispute the authority's preliminary determination of a violation under this chapter.

(2) A reporting entity must submit a request for an informal dispute resolution conference to the authority in writing, in a manner that provides proof of receipt, within twenty-eight calendar days after receipt of the preliminary notice of violation and fine(s).

(3) Requests should specify:

(a) The name of the reporting entity requesting the informal dispute resolution conference and the reporting entity's, or representative's, mailing address, telephone number, and email address (if available);

(b) The items, facts, or conclusions in the preliminary notice of violation being contested; and

(c) The basis for contesting the authority's action, including any mitigating factors upon which the reporting entity relies and the outcome the reporting entity is seeking.

(4) If the agency grants the reporting entity's request for a dispute resolution conference, the conference occurs within sixty calendar days of the date the reporting entity received the authority's written acceptance of the request for a dispute resolution conference.

(5) The reporting entity must notify the authority of who will attend the dispute resolution conference on the reporting entity's behalf at least five business days before the conference.

(6) The authority may terminate the dispute resolution process at any time.

(7) Upon completion or termination of the informal dispute resolution process, the authority will issue a final notice of violation and fine(s).

(8) Nothing in this chapter prevents settlement discussions between the parties. All settlement discussions are informal and without prejudice to the rights of the participants in the discussions.

A reporting entity has a right to an administrative hearing (formal appeal), and any resulting appeals process available under chapters 34.05 RCW and 182-526 WAC, if the authority assesses a final notice of violation and fine(s) against the reporting entity under any section of chapter 43.71C RCW and this chapter. See WAC 182-526-0203.