California Assembly Passes Drug Price Transparency Bill

Source: The Mercury News
The California State Assembly on Monday overwhelmingly approved Senate Bill 17, controversial legislation that could soon become the nation’s most comprehensive law aimed at shining a light on prescription drug prices.
The 66-9 vote easily overcame the 41 votes needed to pass, though an earlier vote late Monday afternoon had come up short at 31-6. At that point, the bill was put on call and the voting roll was kept open for less than an hour until the final vote was called.
SB 17, authored by Sen. Ed Hernandez, D-West Covina and co-authored by Assemblyman David Chiu, D-San Francisco, aims to make drug prices for both public and private health plans more transparent.
It would enable health insurers to negotiate lower prices for drugs or, in many cases, replace those drugs with cheaper alternatives, according to its supporters.
“Public anger at rising drug prices has been growing for some time, and Californians expect their government to do something about it,” said Hernandez in a statement afterwards.
“Drug companies threw everything they had at this bill, but the Assembly stood up for consumers. The reason Big Pharma hates this bill so much is that it’s going to work.”
The bill is strongly opposed by the pharmaceutical industry, which deployed legions of lobbyists and paid for full-page newspaper ads leading up to the Legislature’s final votes on the measure, partially out of fear that SB 17 could become a national model and the first major step toward price controls.
On Monday night, Priscilla VanderVeer, spokeswoman for the Pharmaceutical Research and Manufacturers of America, said in a statement that “SB 17 can’t deliver on its empty promises.
“It won’t help Californians access needed medicine or make their costs at the pharmacy counter any lower,” she said. “It won’t even paint a complete picture of prescription drug spending since it only calls for information on list prices rather than the final cost after discounts and rebates.”
SB 17 would require pharmaceutical companies to notify health insurers and government health plans like Medi-Cal at least 60 days before scheduled prescription drug price hikes that would exceed 16 percent over a two-year period. It would also force drug companies to explain the reasons behind those increases.
“After two years of setbacks, I’m thrilled to see SB 17 pass the Assembly,” said Chiu in a statement. “We’re one step closer to lifting the veil on soaring drug prices and identifying meaningful strategies to ensure access to life-saving treatments.”
The bill passed the Senate 28-10 in May, but has since been amended and will need to return to the Senate for a full vote sometime this week. If it passes there, it will be forwarded to Gov. Jerry Brown, who will decide if it will become law.
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