Two Harmful Bills for Life Sciences Innovators Pass Out of Assembly Health Committee in Sacramento

June 28, 2017

On June 27, two bills with significant negative consequences for the life sciences industry, Senate Bill 17 (Hernandez) and SB 790 (McGuire), were passed out of California’s Assembly Health Committee. Unfortunately, neither bill faces any serious obstacles prior to arriving on the Assembly Floor, which would be the last step prior to reaching the Governor’s desk.

SB 17

SB 17 would require, among many other things, industry 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 increased 10 percent or more cumulatively over the previous two calendar years. On the date of the increase, the drug’s manufacturer would have to submit a host of information to the state, including proprietary information like expected marketing budgets for the drug. This information would then be posted publicly by the state in a manner that allows identification of the individual drugs.

Despite a valiant effort testifying in opposition by life sciences sector representatives and concerns from the committee as to why more industry amendments had not been accepted, the Senate Health Committee Chairman’s bill was passed on an 11-0 vote, with Republicans not voting on the bill.

Click here to add your voice and urge legislators to reject SB 17.

SB 790

SB 790 would restrict all “gifts,” as defined, from manufacturers to physicians unless it falls under one of the many, often confusing, exceptions under the bill. For instance, while meals provided as part of a third-party’s conference may be allowable under certain circumstances, meals as part of a group educational dinner would be subject to a limit of $250 per person, per year. Furthermore, while many expenses associated with research activities, including clinical trials, are permitted, things like equipment loans are not. It is also unclear the extent to which the distribution of investigational new drugs are permitted, as only FDA approved drugs are covered in the bill.

The bill passed by a single vote in committee, 8-3, with one Republican voting for the bill. CLSA’s own Oliver Rocroi, Senior Director of State Government Relations and Dr. Normal Lepor from the American College of Cardiology provided strong testimony in opposition.

We anticipate both bills reaching the Assembly Floor in August after the Legislature’s summer recess, though there is a possibility either could see votes in the first half of July.

Click here to add your voice and urge legislators to reject SB 790.

CLSA will continue to fight vigorously on behalf of California’s life sciences industry and to protect our ability to discover new treatments and cures for patients.

To make your voice heard on these on two pieces of legislation and other CLSA policy priorities, visit Questions? Please contact Brett Johnson, CLSA’s Senior Director, Policy and Regulatory Affairs (