Melanie Mason
Oct 9, 2017
Gov. Jerry Brown approved
a measure Monday to increase disclosure on prescription drug prices, the focal
point of growing efforts to clamp down on climbing pharmaceutical costs.
Supporters call the law the nation’s most
sweeping effort to make prescription drug pricing more transparent. The measure
would require drugmakers to provide notice to health plans and other purchasers
60 days in advance of a planned price hike if the increase exceeds certain
thresholds.
The measure, SB 17 by state Sen. Ed Hernandez (D-Azusa),
will also require health plans to submit an annual report to the state that
details the most frequently prescribed drugs, those that are most expensive and
those that have been subject to the greatest year-to-year price increase.
”The essence of this bill is pretty simple,”
Brown said at a Capitol signing ceremony. “Californians have a right to know
why their medical costs are out of control, especially when pharmaceutical
profits are soaring.”
The disclosure, backers say, would help shed
light on how prescription drugs are contributing to overall healthcare costs.
“SB 17 speaks to the needs of all Californians
who have felt the strain of nonstop prescription drug price increases,” Charles
Bacchi, president and chief executive of the California Assn. of Health Plans,
said in a statement. “Pharmaceutical prices have long played an outsized role
in driving up the cost of health coverage across the board. SB 17 gives us the
tools to address the issue by helping us prepare for price hikes and
discouraging needless cost increases.”
But pharmaceutical companies strongly opposed
the measure, arguing the information would paint an inaccurate picture of drug
spending, since the disclosure centers on full sticker cost set by
manufacturers. Purchasers rarely pay the full list price, either through
negotiated discounts or through use of consumer rebates or coupons.
“It is disappointing that Gov. Brown has
decided to sign a bill that is based on misleading rhetoric instead of what’s
in the best interest of patients,” Priscilla VanderVeer, a spokeswoman for the
Pharmaceutical Research and Manufacturers of America, said in a statement. She
said the measure “ignores the reality that spending on prescription medicines
remains a much smaller portion of overall healthcare spending.”
VanderVeer said the manufacturers’ group was
ready to work to combat affordability issues but added: “It’s time to move
beyond creating new, costly bureaucratic programs that don’t make a dent in
patients’ costs for medicines.”
Escalating drug prices inspired a slate of measures from
lawmakers this year. Brown on Monday signed an additional measure, AB 265 by
Assemblyman Jim Wood (D-Healdsburg), that will restrict the use of drug rebates
or coupons for brand-name drugs when cheaper generic alternatives are
available.
The law includes a number of exemptions,
including for when patients have gotten authorization from their health
insurers for brand-name treatments. But Wood has pitched his measure as a way
to stem widespread use of such vouchers, which some researchers have said drive
higher overall healthcare costs by giving patients incentive to pick pricier
medicines.
Other related bills, including a measure to
clamp down on gifts doctors can receive from pharmaceutical companies and a
proposal to regulate pharmacy benefit managers, a little-scrutinized part of
the drug supply chain, sputtered earlier this year.
The disclosure bill was seen as the
centerpiece of the focus on drug prices, setting off a fierce lobbying battle
in which the pharmaceutical industry squared off against a coalition of backers
that included health plans, labor groups and consumer advocates.
It also garnered support from some Republican
lawmakers, who have typically been aligned with drug makers.
“Shouldn’t we do something to help make this
system operate better so we can get better cost savings for our consumers?
That’s a conservative principle,” said Assemblyman James Gallagher (R-Yuba
City).
Now, Hernandez said, he hoped the law would
inspire similar action on a national level.
“I want to challenge our federal elected
officials...to do the same thing at the national level,” he said, “so that we can
make sure that every single person in this country not only has access to
healthcare but they can afford their healthcare premium dollars.”
In his signing remarks, Brown said the angst
over rising drug costs — and manufacturers’ substantial profits — was
symptomatic of the broader gap between the haves and have-nots.
“The social and political fabric is being
ripped apart,” Brown said. “The inequities are growing. The rich are getting
richer, the powerful are getting more powerful and a growing number of people
are getting more desperate, more alienated.”
He directed a message to the pharmaceutical
industry that opposed the bill: “You’ve got to join with us. You’re part of
America. And if we all don’t pull together, we’re going to pull apart.”
http://www.latimes.com/politics/la-pol-ca-prescription-drug-price-disclosure-20171009-story.html
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