CLSA Leads Charge In Defeating AB 463 (Mandatory Expense Reporting Legislation)

Jan. 18, 2016

On Jan. 12, AB 463, the so-called Pharmaceutical Cost Transparency Act, died in California’s Assembly Health Committee when the author, Asm. David Chiu (D – San Francisco), decided not to put the bill up for a vote, stating that he did not have the votes to pass it. Because the bill needed to be passed out of the committee by Jan. 15, it is officially dead for this session. CLSA, working with our members and life sciences sector partner stakeholders, was instrumental in ensuring this defeat.

The bill would have required the reporting of reams of information related to any drug that has a wholesale acquisition cost (WAC) of more than $10,000 per year or per course of treatment. These drug-specific costs were expected to be itemized, documented, and audited by an independent third-party auditor and would have included costs for clinical trials, raw materials, research and development, and marketing, among other things. Furthermore, if a medicine had been acquired from another company, those same expenses incurred by the previous company would also have to be reported. This cost information would have then been reported to the California Office of Statewide Health Planning and Development (OSHPD) to compile an annual report for submission to the state legislature and to be posted on a public website.

While AB 463’s defeat was an important victory, it is likely that several similar bills will be introduced prior to the Feb. 19 bill introduction deadline. CLSA will be closely monitoring these developments and will keep membership informed of our progress towards again defeating these problematic legislative efforts.

Click here to view CLSA’s statement on AB 463. Click here to view CLSA’s letter of opposition to AB 463. For questions, please contact Oliver Rocroi, CLSA’s Senior Director of State Government Relations (