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Bill

HB 5941

Health: pharmaceuticals; reports on certain costs and other information associated with prescription drugs; require manufacturers of prescription drugs to file with the department. Creates new act.

2025-2026 Regular Session Introduced by Karl Bohnak

Michigan would require drugmakers to file detailed cost and R&D data before significant price increases and publish annual public reports on pricing factors.

bill electronically reproduced 05/12/2026
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Bill Summary · HB 5941

Overview

HB 5941, introduced in Michigan for the 2025-2026 session, would require prescription drug manufacturers to file detailed data with the state and establish reporting, timing, and enforcement mechanisms. The bill aims to increase transparency around drug pricing, development costs, and related activities, with annual public reporting and penalties for noncompliance. It takes effect January 1, 2027.

Main purpose and intent

  • Increase transparency in prescription drug pricing and related costs.
  • Gather information on research and development (R&D), government funding, advertising, lobbying, patents, and market entries/adjustments.
  • Provide policymakers and the public with aggregated data to better understand factors driving drug costs and access.

Key provisions and changes

  • Definitions:
    • Department: Michigan Department of Insurance and Financial Services.
    • Drug manufacturer, prescription drug, and wholesale acquisition cost (WAC) defined for reporting purposes.
  • Mandatory reporting before price hikes:
    • If a drug’s WAC increases by 5% or more for one course of treatment (exceeding $40 initial cost) in a year, or by 15% over three years, manufacturers must file a report at least 90 days before the increase.
    • Reports go to the department and theHouse/Senate fiscal agencies and must include:
    • Drug name and type (brand, generic, biological, biosimilar).
    • Effective date and percentage change in WAC.
    • Aggregate, company-level R&D costs for the prior calendar year.
    • Amount spent on researching and developing the drug.
    • FDA approval history (drugs approved in prior 5 years by the manufacturer).
    • Drugs losing patent exclusivity in the prior 5 years.
    • Government funding received for R&D (federal/state/other).
    • Direct-to-consumer advertising spend (including TV).
    • Lobbying expenditures related to R&D, FDA approval, and inclusion as a mandated benefit.
    • Patent expiration date, any changes to the drug or device since patent, and pursuit of new patents for similar drugs.
  • Information quality:
    • Data submitted must be of comparable quality to the information in a company’s SEC Form 10-K.
  • New drug market introductions:
    • Manufacturers must notify the department within 3 days of introducing a new prescription drug with a WAC above the Medicare Part D specialty threshold.
    • Optional advanced notification if FDA approval is anticipated and commercially available within 3 days after approval.
    • Notice must include: breakthrough therapy or priority review status, acquisition details if not developed in-house, and R&D costs funded by government programs.
  • Public reporting:
    • The department must produce an annual report with aggregate data, excluding information that could cause financial, competitive, or proprietary harm.
    • The annual report is to be shared with legislative committees, fiscal agencies, and caucus policy offices, and posted on the department’s website.
  • Confidentiality and FOIA:
    • Information disclosed to the department is exempt from Michigan’s Freedom of Information Act.
  • Penalties and enforcement:
    • Violators may face civil fines up to $100,000 per month for each month of noncompliance.
    • Prosecution may be brought by the county prosecutor or the attorney general.
  • Rulemaking:
    • The department may promulgate rules as needed to implement the act.
  • Effective date:
    • The act takes effect January 1, 2027.

Who and what is affected

  • Primary: Drug manufacturers that market prescription drugs in Michigan.
  • Departments and agencies: Michigan Department of Insurance and Financial Services; Michigan House and Senate fiscal agencies; health policy committees and caucus offices.
  • Indirectly: Consumers and policymakers who rely on the annual department report for price and development cost transparency.

Procedural and timeline aspects

  • Reporting trigger: Price increases meet specified thresholds (5% annual or 15% over 3 years) with a 90-day prior notification.
  • New drug notifications: Must be provided within 3 calendar days of market release (or pending FDA approval with near-term availability).
  • Annual reporting cycle: Department prepares and publishes an annual aggregate report (publicly accessible with redactions to protect proprietary information).
  • Compliance enforcement: Civil fines up to $100,000 per month; potential criminal or civil prosecution by state authorities.
  • Rulemaking: Department authorized to issue rules to implement the act.

This summary captures the bill’s core aims, required data items, timing triggers, confidentiality protections, and enforcement provisions.

Compiled from official sources — confirm details with the bill’s official record.

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