.06 Policy Review—Process for Establishing a UPL.
A. Staff Recommends Frameworks and Contextual Information.
(1) Board staff shall recommend at least one framework, identified in §B of this regulation, for use in developing a UPL for the subject prescription drug product.
(2) Board staff may recommend certain contextual information identified in §C of this regulation for use in developing a UPL for the subject prescription drug product.
(3) Board staff shall:
(a) Post staff’s recommendations on the Board’s website in advance of the Board meeting; and
(b) Request public comment.
(4) The public may submit written comments by the date specified in the posting in accordance with COMAR 14.01.01.05B(4).
(5) Board staff shall present the recommendations to the Board.
B. Frameworks.
(1) Cost Effectiveness Analysis.
(a) Under this framework, a maximum UPL value may be set by:
(i) Using a cost-effectiveness analysis to model how much additional health outcome is gained per dollar of additional spending when using a drug product compared to an alternative;
(ii) Comparing this number to a threshold to determine if a product is “cost-effective”; and
(iii) Then, if the product is not already cost-effective, given the specified threshold in §B(1)(a)(ii) of this regulation and the model in §B(1)(a)(i) of this regulation, calculating the maximum UPL for which it would be “cost-effective.”
(b) When providing a UPL amount developed using this framework, Board staff shall identify the health outcome, threshold, and relevant underlying assumptions used in the analysis.
(2) Therapeutic Class Reference Upper Payment Limit.
(a) Under this framework, a UPL value may be set using the lowest net price or net cost among competitor products in the same therapeutic class.
(b) The Board may limit the prescription drug products used for analysis to a subset of drugs in the same therapeutic class.
(c) When determining whether to use a product in the same therapeutic class as a reference product, the Board may consider:
(i) A difference in indication including a difference in the patient population and disease severity; and
(ii) Comparative effectiveness research.
(3) Launch Price-Based Upper Payment Limit.
(a) Under this framework, a UPL value may be set based on the initial price at which the drug was first marketed (launch price) adjusted for inflation.
(b) The Board shall adjust the launch price using the CPI-U.
(4) Same Molecule Reference Upper Payment Limit.
(a) Under the same molecule reference UPL framework, a UPL value may be set by comparing prices of certain reference drugs:
(i) A generic drug product that is therapeutically equivalent to the product under the review;
(ii) An authorized generic of the product under review;
(iii) A drug product licensed under a BLA that has the same active ingredient and is approved for one or more of the same or similar indications as the product under review;
(iv) A biosimilar for the product under review;
(v) The reference product for the product under review; and
(vi) A drug product approved under an NDA or ANDA that has the same active ingredient and is approved for one or more of the same or similar indications as the product under review.
(b) When using this framework Board staff may consider:
(i) Any differences between the product under review and the same molecule reference products; and
(ii) The utilization of the same molecule reference products.
(5) Domestic Reference Upper Payment Limit.
(a) Under the domestic reference UPL framework, a UPL value may be set using the estimated net cost of a prescription drug product to other purchasers and payors for the same prescription drug product within the United States or the net price received by the manufacturer.
(b) Under this framework, the UPL may be set using the cost of the lowest estimated net-cost purchaser or payor, excluding Medicaid.
(c) The Board may consider information for all other payors, including information on the Medicare Maximum Fair Price.
(6) International Reference Upper Payment Limit.
(a) Under the international reference UPL framework, a UPL value may be set by comparing drug prices in other countries.
(b) Under this framework, the Board may consider the lowest price received by manufacturers for sales in the United Kingdom, Germany, France, and Canada, converted to U.S. dollars.
(7) Budget Impact-Based Upper Payment Limits.
(a) Under the budget impact-based UPL framework, a UPL value may be set so that spending on the drug does not exceed a certain percentage of a budget as specified by the Board or have a disproportionate impact on that budget.
(b) The Board may consider current spending, projected spending, and potential offsets in developing a UPL value.
(c) When setting the percentage, the Board may consider the number of patients impacted, the disease burden, the current and projected future spending on other treatments and management of the disease.
(8) Blend of Multiple Frameworks.
(a) Under this framework, Board staff may recommend potential UPL values derived from:
(i) A blend of frameworks; and
(ii) A variation in implementing a framework.
(b) When providing a blended UPL amount developed using this framework, Board staff shall identify how the potential blended UPL value was generated.
C. Contextual Information for the Prescription Drug Product:
(1) Information gathered during the cost review study process or the policy review process;
(2) Net costs for:
(a) State health plan;
(b) County, bicounty, and municipal health plans;
(c) Direct government purchases; and
(d) Medicaid;
(3) Total out-of-pocket costs in:
(a) State health plan;
(b) County, bicounty, and municipal health plans; and
(c) Medicaid;
(4) Current coverage status of the drug in:
(a) State health plan;
(b) County, bicounty, and municipal health plans; and
(c) Medicaid;
(5) Utilization in the following program by patients and prescriptions:
(a) State health plan;
(b) County, bicounty, and municipal health plans; and
(c) Medicaid;
(6) Amount of direct government purchases by units and patients served;
(7) For the Maryland State Medical Assistance Program:
(a) Number of prescriptions paid;
(b) Number of patients who received the prescription drug product; and
(c) Total amount paid for the prescription drug product;
(8) Budget impact analysis;
(9) Comparisons of health system costs to research and development costs;
(10) Life cycle revenue analysis; and
(11) Information that can be derived from the aggregation, calculation, and comparison of available information.
D. UPL Values.
(1) The Board may:
(a) Select one or more of the frameworks and contextual information identified in §§B and C of this regulation;
(b) Identify another framework;
(c) Prioritize the selected and identified frameworks and contextual information; and
(d) Direct staff to use the selected and identified frameworks and contextual information to perform analyses and calculations to obtain UPL values.
(2) Based on guidance from the Board and the regulatory criteria under Regulation .02 of this chapter, Board staff shall perform calculations and analyses to develop a collection of potential UPL values.
(3) These calculations and analyses may include appropriate adjustments to ensure that the UPL value:
(a) Reflects all discounts, rebates and price concessions;
(b) Excludes dispensing and administration fees and direct and indirect renumeration to pharmacies; and
(c) Includes patient out-of-pocket costs other than costs attributable to dispensing fees under §D(3)(b) of this regulation.
(4) Board staff shall post a public version of:
(a) The UPL values developed through analysis;
(b) Staff’s recommendation for a proposed UPL amount with a description of the calculation and analyses and relevant underlying assumptions used in the analysis such as health outcome or threshold; and
(c) A request for public written comment on the Board’s website.
(5) Board staff may also request public written comment addressing specific questions or proposing alternative analyses.
(6) The public may submit written comments by the date specified in the posting in accordance with COMAR 14.01.01.05B(4).
E. Technical Hearing.
(1) The Board may convene a hearing for the purpose of receiving technical input, technical information or expert testimony.
(2) The technical hearing shall be conducted in accordance with COMAR 14.01.01.06.
F. Amendment of Recommendations and UPL Values.
(1) Board staff may modify or amend the public version of the developed UPL values, and staff’s recommendations for a proposed UPL amount.
(2) If Board staff modifies or amends the developed UPL values and staff’s recommendations, staff shall post the amendments to the Board’s website, and request public written comment by a specified date.
(3) The public may submit written comments by the date specified in the posting in accordance with COMAR 14.01.01.05B(4).
