BILL NUMBER: AB 463	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Chiu

                        FEBRUARY 23, 2015

   An act to add Chapter 9 (commencing with Section 127675) to Part 2
of Division 107 of the Health and Safety Code, relating to
pharmaceuticals.



	LEGISLATIVE COUNSEL'S DIGEST


   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:

  SECTION 1.  Chapter 9 (commencing with Section 127675) is added to
Part 2 of Division 107 of the Health and Safety Code, to read:
      CHAPTER 9.  PHARMACEUTICAL COST TRANSPARENCY ACT OF 2015


   127675.  The Legislature finds and declares all of the following:
   (a) It is the intent of the Legislature to make information
available to the public about the cost of ultra-high-priced
pharmaceuticals, in order to make pharmaceutical pricing as
transparent as the pricing in other sectors of the health care
industry.
   (b) To fulfill this goal, the Legislature finds that there should
be annual cost reporting on the most expensive drugs that would be of
use by policymakers, government agencies, and others to understand
costs for these important products.
   127676.  (a) Each manufacturer of a prescription drug, made
available in California, that has a wholesale acquisition cost (WAC)
of ten thousand dollars ($10,000) or more annually or per course of
treatment, shall file a report pursuant to this section on the costs
for each qualifying drug.
   (b) The report shall include all of the following for each drug:
   (1) The total costs for the production of the drug, including all
of the following:
   (A) The total research and development costs paid by the
manufacturer, and separately, the total research and development
costs paid by any predecessor in the development of the drug.
   (B) The total costs of clinical trials and other regulatory costs
paid by the manufacturer, and separately, the total costs of clinical
trials and other regulatory costs paid by any predecessor in the
development of the drug.
   (C) The total costs for materials, manufacturing, and
administration attributable to the drug.
   (D) The total costs paid by any entity other than the manufacturer
or predecessor for research and development, including any amount
from federal, state, or other governmental programs or any form of
subsidies, grants, or other support.
   (E) Any other costs to acquire the drug, including costs for the
purchase of patents, licensing or acquisition of any corporate entity
owning any rights to the drug while in development, or all of these.

   (F) The total marketing and advertising costs for the promotion of
the drug directly to consumers, including, but not limited to, costs
associated with direct to consumer coupons and amount redeemed,
total marketing and advertising costs for promotion of the drug
directly or indirectly to prescribers, and any other advertising for
the drug.
   (2) A cumulative annual history of average wholesale price (AWP)
and WAC increases for the drug (expressed as percentages), including
the months each increase in each category, AWP and WAC, took effect.
   (3) The total profit attributable to the drug as represented in
total dollars and represented as a percentage of the total company
profits that were derived from the sale of the drug.
   (4) The total amount of financial assistance the manufacturer has
provided through patient prescription assistance programs, if
available.
   (c) All of the information in subdivision (b) shall be itemized
and documented by the manufacturer, and audited by a fully
independent third-party auditor prior to filing.
   (d) The information required by this section shall be filed
annually with the Office of Statewide Health Planning and Development
on a form prescribed by the office and shall be submitted no later
than May 1 of each year.
   (e) (1) Notwithstanding Section 10231.5 of the Government Code,
the Office of Statewide Health Planning and Development shall issue a
report annually to the Legislature outlining the information
submitted pursuant to this section, and the office shall post the
report publicly on its Internet Web site.
   (2) A report submitted to the Legislature pursuant to this
subdivision shall be submitted in compliance with Section 9795 of the
Government Code.
   (f) The Office of Statewide Health Planning and Development shall
convene an advisory workgroup to develop the form required by this
section. The workgroup shall include, but is not limited to,
representatives from the pharmaceutical industry, health care service
plans and insurers, pharmacy benefit managers, governmental
agencies, consumer advocates, and physicians.