Published: Tue, October 10, 2017
Worldwide | By Gretchen Simon

New Law Challenges 'Evils' Of Pharma Profits, California Governor Claims

New Law Challenges 'Evils' Of Pharma Profits, California Governor Claims

Yesterday, California Governor Jerry Brown signed a bill into law that requires drug makers to explain and justify price increases.

Capitol Hill lawmakers and President Trump have harshly criticized some pharmaceutical companies for the skyrocketing prices of some drugs.

Drug companies may think twice about raising prescription drug prices more than 8%/year (or 16%/two years) and triggering the disclosure requirements.

"This pivotal moment marks a major victory for patients, healthcare providers and local governments alike in the battle to rein in spiraling prescription drug prices", says the California Association of Health Plans. The notice required by subdivision (a) shall be provided in writing at least 60 days prior to the planned effective date of the increase.

Democratic state Sen. Ed Hernandez, the bill's prime sponsor, said Congress should take a cue from California in taking similar steps to fight drug cost increases.

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So why are drug prices going up so steeply? "That is the cost of prescription drugs".

"Today we are one step closer to helping patients, governments, and businesses understand why drug prices are so high - and to using that information to bring those costs down", said Assemblymember David Chiu (D-San Francisco), a principal co-author of SB 17. "We need answers for the child who needs an Epi-pen, the Hepatitis C patient who needs Sovaldi, and the AIDS patient who needs Daraprim". It also forces insurance companies to file yearly reports with state regulators outlining the impact of medicine costs on health care premiums. "This new California law sets national policy, breaking new ground to benefit patients and purchasers against unfair and unjustified prescription drug price hikes".

"The drug that I take, I take an MS disease modifying drug as everyone with MS is encouraged to do", Fargo said after the bill signing ceremony, "just a few years ago these drugs were about $10,000 a year, the drug I take is now $91,000 a year".

The new state law requires facilities to refer to residents by their preferred name or pronoun and prohibits facilities from denying admission, involuntarily discharging, evicting or transferring a resident within a facility or to another facility based on anti-LGBT attitudes of other residents or a person's actual or perceived sexual orientation, gender, gender identity, gender expression or HIV status. Taking the costs of the regulatory process into account raises the average cost for a new drug to $2.9 billion. "SB 17 ignores the reality that spending on prescription medicines remains a much smaller portion of overall health care spending".

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