State Nears Final Rules on SB 17 Implementation

By Brett Johnson
Sept. 17, 2018

On Aug. 29, California’s Office of Statewide Health Planning and Development (OSHPD) held a public hearing regarding proposed regulations to implement Senate Bill 17, which was signed into law last year.

The statute requires manufacturers to provide a 60-day advance notice of certain price increases to all California public agency purchasers, health insurers, and pharmacy benefit managers (PBM). It also requires further reporting to OSHPD on those drugs, as well as reporting on new drugs with an initial list price of over $670 per month, which is the Medicare Part D specialty drug threshold.

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

The proposed rules primarily provide for the implementation of those statutory sections requiring manufacturer reporting to OSHPD. On Monday, Sept. 17, OSHPD also made minor revisions to those proposed regulations, providing for another 15-day comment period ending on Oct. 2.

OSHPD began its Aug. 29 hearing with an overview of the rulemaking process but did not walk through or elaborate on the proposed regulations. CLSA provided the only public comments, reiterating that the most important issue for CLSA is verifying the registered purchasers who receive advance notice. CLSA has continued to stress in both written and oral comments that SB 17 identifies four types of entities eligible to receive notices, which implies that non-listed entities may not receive SB 17 notices and, consequently, that a specific OSHPD process to identify and separate eligible from ineligible entities is necessary.

We anticipate OSHPD finalizing its regulations next month, which will allow for completion of its manufacturer data submission portal with sufficient time for beta testing of the system prior to Jan. 1, 2019 (i.e., when reporting to OSHPD on certain new drugs is required).

The proposed rules posted for public comment are available here. For a copy of CLSA’s written comments or other additional information, please contact Brett Johnson, CLSA’s Senior Director of Policy & Regulatory Affairs (