New Disclosure Bill Posing Challenge for the Industry

April 12, 2016

On March 30, Senator Ed Hernandez, chair of the Senate Health Committee, amended Senate Bill 1010 to impose a number of requirements on the manufacturers of both brand and generic medications.

The bill would require, among other things, a manufacturer to provide a 60-day notice to all payers in California and the chairs of all fiscal committees in the state legislature if the price of a drug increases more than 10 percent in a 12-month period or if a drug will be marketed at an initial price of $10,000 or more annually or per course of treatment.

At 30 days, the manufacturer would be required to submit drug-specific information on “public funding received,” anticipated marketing budget, and a justification of the increase or initial price “including all information and supporting documentation.”

Insurers are required to submit cost information on a few categories of drugs, and this information is then combined with the information from manufacturers into an annual report, which is the subject of an annual hearing.

CLSA has submitted comments opposing the bill. We are concerned that the bill conflicts with federal law, fails to actually get at the true costs, could lead to shortages, and completely ignores any benefits of the targeted medicines.

The author of the bill has held a couple stakeholder meetings to discuss potential amendments.

As of the time of this writing, the bill was scheduled to be heard in the Senate Health Committee on Wednesday, April 13th, and is expected to pass out of that committee. CLSA will continue to vigorously engage on the bill.

Questions? Please contact Brett Johnson, CLSA’s Director of State and Local Government Policy (