Drug Pricing Legislation – AB 463 (Chiu)

May 21, 2015

This bill would have required pharmaceutical companies to file an annual report with the Office of Statewide Health Planning for any drug whose wholesale acquisition cost exceeds $10,000 per course of treatment or per year. The report would have to include the total cost of production to the manufacturer and any predecessor company, including research and development costs, clinical trial and regulatory costs, manufacturing and administrative costs, acquisition costs, marketing and advertising costs, and any costs paid by any other entity, including government grants or subsidies.

Although we prevailed when the author withdrew his bill after it became clear that he would not be able to pass the bill through the Assembly Health Committee, we are confident that some form of this bill will emerge either later this year or at the beginning of next year. Both Assemblymember Chiu (D-San Francisco) and the proponents of the legislation have stated publicly and privately that they intend to resurrect this legislation. Even without the legislation, the issue of drug pricing continues to take center stage in Sacramento. View CLSA’s press release on the outcome of AB 463.