California Legislature Heads to Summer Recess with Major Bills in Flux

July 24, 2017

As California’s legislature heads into its break for the summer, returning on Aug. 21, the top three bills of concern to the life sciences industry all face the potential for amendments before reaching their respective final floor votes.  Those priority bills are Senate Bill 17 (Hernandez), SB 790 (McGuire) and Assembly Bill 265 (Wood).

SB 17

SB 17 would require, among many other things, industry to provide a 60-day advance notice of any price increase on a drug to all California public agency purchasers, health insurers, and pharmacy benefit managers (PBM) if that drug’s price increased 10 percent or more cumulatively over the previous two calendar years. On the date of the increase, the drug’s manufacturer would have to submit a host of information to the state, including proprietary information like expected marketing budgets for the drug. This information would then be posted publicly by the state in a manner that allows identification of the individual drugs.

SB 17 is currently before the Assembly Appropriations Committee. CLSA and our partner trade associations are pushing for amendments to make the bill less administratively burdensome and costly for the industry, as well as requesting the same confidentiality protections granted to insurers under the bill.

Click here to add your voice and urge legislators to reject SB 17.

SB 790

SB 790 would restrict all “gifts,” as defined, from manufacturers to physicians unless it falls under one of the many, often confusing, exceptions under the bill. For instance, while meals provided as part of a third-party’s conference may be allowable under certain circumstances, meals as part of a group educational dinner would be subject to a limit of $250 per person, per year. Furthermore, while many expenses associated with research activities, including clinical trials, are permitted, things like equipment loans are not. It is also unclear the extent to which the distribution of investigational new drugs are permitted, as only FDA approved drugs are covered in the bill.

CLSA has been the lead for the life sciences sector in lobbying against SB 790, and the bill is now eligible to be taken up on the Assembly floor, which is the last stop before reaching the Governor’s desk. In addition to lobbying in the Capitol, CLSA has spearheaded an aggressive letter-writing campaign that has resulted in roughly 400 letters from member company employees being sent to the Assembly.

We anticipate that the bill will be taken up on the floor shortly after the legislature returns from recess, though, prior to that vote, we also anticipate the bill will be heavily amended to specify the activities it aims to restrict, as opposed to its current broad restriction with a laundry list of exceptions.

Click here to add your voice and urge legislators to reject SB 790.

AB 265

AB 265 would prohibit a drug manufacturer from offering in California “any discount, rebate, product voucher, or other reduction in an individual’s out-of-pocket expenses, including, but not limited to, a copayment or deductible” if a lower cost and therapeutically equivalent brand or generic drug is “available.” The bill has gone through several rounds of amendments and now excludes biologics and instances where a patient has received a prior authorization or step therapy exception.

The bill is currently eligible to be taken up on the Senate floor, and we anticipate a few substantive amendments to the bill prior to that vote.

CLSA will continue to fight vigorously on behalf of California’s life sciences industry and to protect our ability to discover new treatments and cures for patients. Questions? Please contact Brett Johnson, CLSA’s Senior Director, Policy and Regulatory Affairs (