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CLSA Wire

State Holds Industry Workshop for Drug Price Reporting Legislation
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April 19, 2018
By Brett Johnson

Last year, Governor Brown signed Senate Bill 17 (Hernandez) into law. The law requires manufacturers 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 has increased 16 percent or more cumulatively over the previous two calendar years, including the current year’s increase. It also requires more comprehensive quarterly reporting on those drugs, as well as on new drugs with an initial list price of over $670 per month.

The law’s advance notice provisions officially took effect on January 1, 2018. Additional quarterly reporting and reporting on new drugs by manufacturers is required beginning January 1, 2019.

The agency charged with implementing and administering the law, California’s Office of Statewide Health Planning and Development (OSHPD), recently began its stakeholder engagement process with separate workshops for users and the submitters of the drug price data. Each workshop had roughly fifty attendees, which included CLSA staff and several member companies.

At the April 11 workshop, which was focused on companies submitting drug price data, OSHPD staff walked through their approach and current thinking on implementing SB 17’s reporting requirements. The presentation included a roundtable discussion with industry representatives, which included CLSA staff and two member companies.  The goal of the workshop for OSHPD was to learn from drug makers how best to collect and report the required drug price information.

OSHPD staff stated an intent to maintain flexibility in reporting standards where possible in the initial reporting cycles, though they were rigid on several standards. For instance, all drug price reporting will be submitted at the 11-digit National Drug Code (NDC) level, and late reporting penalties also will be applied at that 11-digit NDC level. OSHPD will be using the Medi-Span Electronic Drug File v2 to monitor drug makers’ compliance and to assess the data submitted.

CLSA has submitted follow-up written comments to the workshop discussions. OSHPD has stated has already begun drafting the regulations and intends to submit the draft regulatory package to the Office of Administrative Law (OAL) in July, which would commence the official “notice and comment” rulemaking process.

Any CLSA members who would like to provide input or would like further information on the OSHPD process are asked to reach out to Oliver Rocroi (orocroi@califesciences.org) or Brett Johnson (bjohnson@califesciences.org).