BILL NUMBER: AB 1923	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Daly

                        FEBRUARY 19, 2014

   An act to amend Section 14977.1 of the Government Code, relating
to public records.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1923, as introduced, Daly. State government: contracts: public
records.
   Existing law, the California Public Records Act, requires state
and local agencies to make public records available upon receipt of a
request that reasonably describes an identifiable record not
otherwise exempt from disclosure, upon the payment of fees to cover
costs.
   Existing law authorizes the Department of General Services to
enter into exclusive or nonexclusive contracts on a bid or negotiated
basis with the manufacturers and suppliers of single source or
multisource drugs, as specified. Existing law authorizes those
contracts to include price discounts, rebates, refunds, or other
strategies aimed at managing escalating prescription drug prices.
   This bill would exempt the financial terms of a contract executed
pursuant to this authorization from disclosure under the California
Public Records Act.
   Existing constitutional provisions require that a statute that
limits the right of access to the meetings of public bodies or the
writings of public officials and agencies be adopted with findings
demonstrating the interest protected by the limitation and the need
for protecting that interest.
    This bill would make legislative findings to that effect.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 14977.1 of the Government Code is amended to
read:
   14977.1.  (a) Notwithstanding any other  provision of
 law, the Department of General Services may enter into
exclusive or nonexclusive contracts on a bid or negotiated basis with
manufacturers and suppliers of single source or multisource drugs.
The department may obtain from those manufacturers and suppliers,
discounts, rebates, or refunds based on quantities purchased insofar
as permissible under federal law. Contracts entered into pursuant to
this chapter may include price discounts, rebates, refunds, or other
strategies aimed at managing escalating prescription drug prices.
   (b) Contracts under this chapter shall be exempt from Chapter 2
(commencing with Section 10290) of Part 2 of Division 2 of the Public
Contract Code. 
   (c) The financial terms of a contract executed pursuant to this
section shall be confidential and shall be exempt from disclosure
under the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1). 
  SEC. 2.  The Legislature finds and declares that Section 1 of this
act, which amends Section 14977.1 of the Government Code, imposes a
limitation on the public's right of access to the meetings of public
bodies or the writings of public officials and agencies within the
meaning of Section 3 of Article I of the California Constitution.
Pursuant to that constitutional provision, the Legislature makes the
following findings to demonstrate the interest protected by this
limitation and the need for protecting that interest:
   It is in the state's financial interest to keep pharmaceutical
pricing information confidential when there is a contract between the
Department of General Services and a pharmaceutical company. As is
the case with the existing parallel provision in the Medi-Cal drug
program, companies are more aggressive in their pricing, given the
size of the California market, when it is clear that neither a
competitor nor other payer has access to this information. Other
states and companies have sought to retrieve this sensitive pricing
information, and a statutory confidentiality protection will ensure
that drug companies remain aggressive in their negotiations with the
State of California. Additionally, the state will realize further
savings when it no longer has to process, and ultimately reject,
requests for this information.