AB 463, as introduced, Chiu. Pharmaceutical Cost Transparency Act of 2015.
Existing law establishes the Office of Statewide Health Planning and Development, which is vested with all the duties, powers, responsibilities, and jurisdiction of the State Department of Public Health relating to health planning and research development.
This bill would require each manufacturer of a prescription drug, made available in California, that has a wholesale acquisition cost of $10,000 or more annually or per course of treatment to file a report, no later than May 1 of each year, with the Office of Statewide Health Planning and Development on the costs for each qualifying drug, as specified. The bill would require the office to issue a report annually to the Legislature outlining the information submitted pursuant to this act, and the office would be required to post the report on its Internet Web site. The bill would also require the office to convene an advisory workgroup, as provided, to develop the reporting form required by this act.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Chapter 9 (commencing with Section 127675)
2is added to Part 2 of Division 107 of the Health and Safety Code,
3to read:
4
The Legislature finds and declares all of the following:
9(a) It is the intent of the Legislature to make information
10available to the public about the cost of ultra-high-priced
11pharmaceuticals, in order to make pharmaceutical pricing as
12transparent as the pricing in other sectors of the health care
13industry.
14(b) To fulfill this goal, the Legislature finds that there should
15be annual cost reporting on the most expensive drugs that would
16be of use by policymakers, government agencies, and others to
17understand costs for these important products.
(a) Each manufacturer of a prescription drug, made
19available in California, that has a wholesale acquisition cost (WAC)
20of ten thousand dollars ($10,000) or more annually or per course
21of treatment, shall file a report pursuant to this section on the costs
22for each qualifying drug.
23(b) The report shall include all of the following for each drug:
24(1) The total costs for the production of the drug, including all
25of the following:
26(A) The total research and development costs paid by the
27manufacturer, and separately, the total research and development
28costs paid by any predecessor in the development of the drug.
29(B) The total costs of clinical trials and other regulatory costs
30paid by the manufacturer, and separately, the total costs of clinical
31trials and other regulatory costs paid by any predecessor in the
32development of the drug.
33(C) The total costs for materials, manufacturing, and
34administration attributable to the drug.
35(D) The total costs paid by any entity other than the
36manufacturer or predecessor for research and development,
37including any amount from federal, state, or other governmental
38programs or any form of subsidies, grants, or other support.
P3 1(E) Any other costs to acquire the drug, including costs for the
2purchase of patents, licensing or acquisition of any corporate entity
3owning any rights to the drug while in development, or all of these.
4(F) The total marketing and advertising costs for the promotion
5of the drug directly to consumers, including, but not limited to,
6costs associated with direct to consumer coupons and amount
7redeemed, total marketing and advertising costs for promotion of
8the drug directly or indirectly to prescribers, and any other
9advertising for the drug.
10(2) A cumulative annual history of average wholesale price
11(AWP) and WAC increases for the drug (expressed as percentages),
12including the months each increase in each category, AWP and
13WAC, took effect.
14(3) The total profit attributable to the drug as represented in
15total dollars and represented as a percentage of the total company
16profits that were derived from the sale of the drug.
17(4) The total amount of financial
assistance the manufacturer
18has provided through patient prescription assistance programs, if
19available.
20(c) All of the information in subdivision (b) shall be itemized
21and documented by the manufacturer, and audited by a fully
22independent third-party auditor prior to filing.
23(d) The information required by this section shall be filed
24annually with the Office of Statewide Health Planning and
25Development on a form prescribed by the office and shall be
26submitted no later than May 1 of each year.
27(e) (1) Notwithstanding Section 10231.5 of the Government
28Code, the Office of Statewide Health Planning and Development
29shall issue a report annually to the Legislature outlining the
30information submitted pursuant to this section, and the office shall
31post the report publicly on its Internet Web site.
32(2) A report submitted to the Legislature pursuant to this
33subdivision shall be submitted in compliance with Section 9795
34of the Government Code.
35(f) The Office of Statewide Health Planning and Development
36shall convene an advisory workgroup to develop the form required
37by this section. The workgroup shall include, but is not limited to,
38representatives from the pharmaceutical industry, health care
P4 1service plans and insurers, pharmacy benefit managers,
2governmental agencies, consumer advocates, and physicians.
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