With SB17 Passage, California Poised to Set National Policy on Prescription Drug Prices

The California State Assembly passed today, on an overwhelming, bipartisan vote, landmark prescription drug price transparency legislation.
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For Immediate Release: Monday, September 11, 2017

CONTACT: Anthony Wright, Executive Director, Health Access California, Awright@health-access.org, 916-870-4782 (cell)

Rachel Linn-Gish, Director of Communications, Health Access California, Rlinngish@health-access.org; 916-532-2128 (cell)

CALIFORNIA POISED TO SET NATIONAL POLICY ON PRESCRIPTION DRUG PRICES

WITH PASSAGE OF SB17 THROUGH CA ASSEMBLY 
  • Despite Major Opposition from PHRMA, SB 17 Represents Biggest Progress on Health Care Costs This Year–in California and Nationally.
  • With Strong Support from Consumer, Labor, Insurer, School, Patient, Health Provider, Government, and Other Community Groups, SB 17, by Senator Ed Hernandez Passes California Assembly.
  • With Senate Concurrence Vote and Governor’s Signature on SB17, California Would Provide Advance Notice and Transparency and Justification for Any Prescription Drug Price Increase Over 16% Over Two Years–National Impact and Importance.

SACRAMENTO, CA – The California State Assembly passed today, on an overwhelming, bipartisan vote, landmark prescription drug price transparency legislation. SB 17 by Senator Ed Hernandez, and co-sponsored by Health Access California, the California Labor Federation, and UNITE HERE, would provide advance notice and disclosure of prescription drug prices in order to gain greater transparency for consumers and purchasers.

The bill, strongly backed by a broad coalition of consumer, labor, business, insurer, and other health organizations, was opposed by the pharmaceutical industry who had been hiring dozen of lobbyists, running radio and newspaper ads, and otherwise spending significantly in their campaign against these protections.

“California is poised to make real progress and set national policy on prescription drug prices. In a bipartisan vote with national importance and impact, the bill will require advance notice, transparency, and justification for any prescription drug price spikes over 16% over two years. If this bill is signed into law, no longer in our nation will Big Pharma be able continue to raise prices without notice or justification,” said Anthony Wright, executive director, Health Access California, the statewide health care consumer advocacy coalition, and a co-sponsor of SB 17 with the California Labor Federation and UNITE HERE. “California consumers are reminded of prescription drug price hikes every time they visit a pharmacy. The transparency would allow us to know why drug costs go up so much; the advance notice will provide health purchasers across the nation a better ability to bargain, prepare, and manage rising pharmaceutical prices.”

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. It 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. The bill also 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.

“The passage of this bill also shows that Big Pharma is beatable, despite the obscene amount the drug companies spent on contract lobbyists, radio, newspaper and online advertising, and more to oppose SB 17 to prevent any transparency or oversight of their practices,” continued Wright. “Notice and disclosure is routine in the health care industry, but Big Pharma refuses to face these same standards.”

Also pending in the last week of legislative session (and part of a package of legislation supported by consumer groups on prescription drug prices) is 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.

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