Drug Pricing Transparency Bill Approved by the Assembly

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Senator Hernandez’ SB 17 heads to the Senate Floor for concurrence, then to the Governor’s Desk

SACRAMENTO – On Monday, Senate Bill 17, authored by Senator Dr. Ed Hernandez, O.D., chair of the Senate Health Committee, passed the Assembly Floor with bipartisan support. SB 17 will shine a light on Big Pharma and the reasons for rising drug prices in California.

“Public anger at rising drug prices has been growing for some time, and Californians expect their government to do something about it,” said Senator Hernandez (D-West Covina). “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.”

SB 17 promotes transparency in the health care system by requiring drug makers to give prior notice to purchasers before raising prices and requiring health plans to report the proportion of the health insurance that is spent on prescription drugs. [SB 17 Fact Sheet]

Assemblymember Jim Wood, chair of the Assembly Health Committee, jockeyed the measure on the Assembly Floor.

“There is no question that the drug industry plays a vital and, at times, life-saving role in patient treatment,” said Assemblymember Jim Wood (D-Healdsburg), SB 17 co-author. “And we cannot stifle innovation, but we must put reasonable parameters around pricing practices that, in the past, have focused too often on what the market will bear. There are many players that contribute to these escalating costs, and as a legislative body, no one will escape scrutiny. Now is the time to pass this important bill.”

Millions of Californians have health insurance, but affordability remains a critical issue.

“Californians deserve to know why their medicine costs so much. With the ACA’s health care gains under attack in Washington, D.C., we must do everything we can in California to fight real health care challenges like the skyrocketing costs of prescription drugs,” said Assemblymember David Chiu, SB 17 co-author. “After two years of setbacks, I’m thrilled to see SB 17 pass the Assembly. We’re one step closer to lifting the veil on soaring drug prices and identifying meaningful strategies to ensure access to life-saving treatments.”

Co-sponsored by California Labor Federation, Health Access California and Unite HERE!, SB 17 has amassed a strong support coalition of consumer, labor, business, insurer, and other health organizations.

“For too long, spiking prescription drug costs have been squeezing working people and seniors who are barely making ends meet,” said California Labor Federation Executive Secretary-Treasurer Art Pulaski. “We commend the legislature for taking bold action today. By passing SB 17, California is setting an example for the rest of the country. We thank Sen. Hernandez for his leadership on this issue and look forward to Gov. Brown signing this critical measure into law.”

“Addressing the rising cost of prescription drugs can’t wait another year. California patients are reminded of the rising prices of prescription drugs every time they visit a pharmacy, every month, every week, every day,” said Anthony Wright, Executive Director of Health Access California. California is poised to set national policy on prescription drug pricing, benefitting patients and purchasers.”

This transparency bill is opposed by Big Pharma, which has hired dozens of lobbyists, run radio and newspaper ads, and spent a lot of money to kill this bill.

Drug companies try to hide their price gouging by helping consumers with their co-payments or providing discounts to the uninsured, but all this does is shield consumers from the true cost of the drug while driving up insurance premiums for everyone.

Just last week, members of the SB 17 support coalition announced they had more than 31,000 petition signatures from Californians agreeing they deserve to know why their drug prices keep rising.

“Passing SB 17 proves once again that the people — not corporate special interests — are the strongest force in our democracy,” said NextGen America President Tom Steyer. “Despite PhRMA’s war against transparency and obscene efforts to outspend us, a majority of Assemblymembers justly sided with the people of California today. SB 17 is a crucial step towards reining in skyrocketing drug prices, but the fight is not over. California must continue to lead to make the best possible health care affordable and accessible to all.”

SB 17 was approved by a vote of 66-9. This number may change as members are allowed to change their vote once session adjourns for the day.

Once the Senate concurs in the Assembly amendments, SB 17 will head to the Governor’s desk.

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