Prescription Drug Price Legislation Looms as Policymakers Return to Sacramento This Week

Following price spikes for EpiPen and other life-saving drugs, strong voter support, and inaction at the federal level, momentum continues in the California Legislature to protect consumers from skyrocketing prescription drug costs. A package of five bills targeting high prescription drug prices need final votes before this year’s session ends in less than a month on September 15th.

With these bills, the California legislature can take real, tangible steps toward addressing unexplained and exorbitant prescription drug price spikes. Employers, union trusts, and insurers all struggle with paying too much more for medications–not to mention consumers who have hard time affording prescriptions every time they visit the pharmacy. Too many people skip their prescriptions, cut pills in half or go without necessary care as a result of higher and higher drug costs.

SB 17 by Senator Ed Hernandez is the most high profile of several bills currently pending in the California Legislature that shines a spotlight on why prescription drug prices keep going up. The bill provides greater transparency on prescription drug prices through advance notice and disclosure and is strongly backed by a broad coalition of consumer, labor, business, insurer, and other health organizations, but opposed by the pharmaceutical industry.

Big Pharma is spending significantly to defeat SB 17, lobbying to prevent any transparency or oversight of their practices. This is brewing to be the biggest legislative lobbying fight of the fall. Given the intense opposition, these companies seem to fear that if consumers know more about their practices, they won’t like what they see.

SB 17 requires advance notice of price hikes for existing drugs be given to public purchasers like Medi-Cal and CalPERS and private purchasers including health plans and insurers. This gives health purchasers better ability to bargain, prepare, and manage rising pharmaceutical prices. The bill also enhances public disclosure of information about drug pricing by requiring drug manufacturers to file information about the rationale for pricing increase, marketing costs, and other specifics with the Office of Statewide Health Planning and Development. Lastly, SB 17 requires health plans and insurers to disclose information about drug pricing through existing rate review processes at the Department of Managed Health Care and Department of Insurance. All other actors in the health care market must disclose these costs. Why should pharmaceutical companies be any different?

The package of legislation supported by consumer groups to put more scrutiny on prescription drug price increases also includes:

  • SB 790 (McGuire) to limit gifts from drug manufacturers to physicians or teaching hospitals.
  • AB 265 (Wood) to prohibit prescription drug manufacturers from offering discounts for name-brand drugs, if a less-expensive equivalent brand is available, preventing the use of higher priced drugs when unnecessary.
  • AB 315 (Wood) to require pharmacy benefit managers (PBMs) to disclose information about drug acquisition costs and negotiated rates to a purchaser. The bill passed committee on a bi-partisan basis.
  • AB 587 (Chiu) to establish a California Pharmaceutical Collaborative for state purchasers of prescription drugs to achieve greater savings.

The legislature is appropriately looking at all the factors that inflate prescription drug costs, from their marketing to their pricing. Given how much we spend as the pharmacy, we need to explore every avenue to address these rising costs

Read more:

Los Angeles Times: With new allies and approaches, California lawmakers try again to confront high prescription drug prices.