California governor signs drug pricing transparency measure

California Gov. Jerry Brown (D) on Monday signed a bill aimed at increasing transparency in prescription drug pricing.

The new law requires drug manufacturers to notify insurers before they raise the price of a prescription drug by more than 16 percent over a two-year period. Drug companies would also have to explain why the price is increasing.

“This is, I believe, the first measure of its kind nationwide, but it’s the best of its kind as well,” state Senate President Pro Tempore Kevin de León (D) said. “It’s our hope that we can export these policies nationwide and that other states will follow suit and look at how sensible transparency makes sense for everyday consumers throughout the country.”

{mosads}An insurance CEO, a consumer advocacy coalition, a union group and more lauded the bill at a news conference on Monday. They described the difficult road to the bill’s passage and offered hope other states would take up similar measures.

The bill’s author, state Sen. Ed Hernandez (D), called the legislation “one of the most comprehensive bills in the country.”

“This has been a hard-fought bill,” he said.

Since January 2015, drug companies have spent $16.8 million in lobbying efforts aimed at killing various drug measures in the state, San Francisco’s KQED reported. California had a drug-pricing initiative on its ballot last November, but it ultimately failed.

A powerful drug industry trade group on Monday called the bill’s signing “disappointing,” saying it’s “based on misleading rhetoric instead of what’s in the best interest of patients.”

“There is no evidence that SB 17 will lower drug costs for patients because it does not shed light on the large rebates and discounts insurance companies and pharmacy benefit managers (PBMs) are receiving that are not always being passed on to patients,” Priscilla VanderVeer, a Pharmaceutical Research and Manufacturers of America spokeswoman, said in a statement.

“Nothing in SB 17 will help patients get the benefits of the savings that insurance companies and PBMs are getting.”

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

In his first news conference as president-elect, Trump said the pharmaceutical industry was “getting away with murder.”

In June, details of an executive order Trump was preparing in an effort to lower drug prices leaked. Critics felt it was friendly toward the drug industry, and it hasn’t been finalized.

Lawmakers have berated drug company CEOs at hearings, introduced bills and launched investigations in an effort to examine why companies increased the price tag of their drugs.

But there has yet to be any real legislative movement on drug pricing

Tags Pharmaceutical industry Prescription costs

The Hill has removed its comment section, as there are many other forums for readers to participate in the conversation. We invite you to join the discussion on Facebook and Twitter.

Most Popular

Load more


See all Video