California Lawmakers Try Again to Require More Transparency on Drug Prices
California Democrats, labor unions, health insurers and consumer advocacy groups — along with newly joined backer Tom Steyer, the billionaire activist — are restarting their effort to shed more light on prescription drug prices after a similar measure sputtered last year.
State Senator Ed Hernandez (D-West Covina) unveiled his new bill at a Capitol news conference Wednesday. He said the legislation would curtail the "arms race of profit generation" by the pharmaceutical industry by requiring manufacturers to give 90 days' notice to purchasers before significantly increasing a drug's price.
The proposal, SB 17, also would require health plans to release data on drug purchasing trends, including the most prescribed and most expensive medications.
The plan comes as escalating drug prices continue to capture national attention, most recently when the cost of EpiPens, used to treat severe allergic reactions, surged by more than 500%.
Supporters were quick to acknowledge the firepower of the pharmaceutical industry, which raised more than $100 million to defeat a Bernie Sanders-endorsed ballot measure last year aimed at curbing what state agencies could pay for prescription drugs.
But backers of the legislation said the political climate favored their cause.
Since introducing his previous bill last year, Hernandez said "over 20 states across the nation have been following suit, and the industry has started to restrain themselves to avoid public scorn."
"Transparency works, and that's why drugmakers will fight this bill," Hernandez said.
Priscilla VanderVeer, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, or PhRMA, said the association was willing to work with lawmakers on the issue, but signaled wariness of Hernandez's proposal.
"Rather than creating a new bureaucratic system that creates layers of red tape, Californians would be well served if we focus on market-based solutions that better align payment with the value to the patient," VanderVeer said in a statement. "Just as a one-size-fits-all [approach] doesn't work in caring for patients, neither should we use that strategy in pricing medical care."
She also countered the narrative of surging prices, noting that the federal government expects drug costs to follow the same cost trends as the rest of the healthcare sector.
"We should not legislate to a one-year spike that occurred now more than two years ago," she said.
As the bill's proponents girded for battle against drug manufacturers, they vowed to flex their own political muscle.
Caitlin Vega of the California Labor Federation, a co-sponsor of the bill, said the group's members "will fill the halls of the Capitol to tell their stories and to explain why this bill is so important."
Steyer, who is considering a gubernatorial run in 2018, said it's not yet been determined how his group, NextGen, will rally for the measure.
"We want to make sure that this process is transparent, so that people in California who are paying outrageous prices for medical care and for drugs ... know who is representing their interest and who isn't," Steyer said.
LA Times 3/15