BILL NUMBER: AB 463 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 4, 2016
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 amended, Chiu. Pharmaceutical Cost Transparency Act of
2015. 2016.
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 the bill and 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. bill. The bill would
require the office to maintain the confidentiality of any information
submitted by a prescription drug manufacturer pursuant to those
provisions that the director of the office deems to be confidential
and proprietary.
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. 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 2016
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 licensing,
or acquisition of any corporate entity owning any rights to the
drug while in development, or all of these.
(F)
(2) 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
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)
(3) 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)
(4) 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)
(5) The total amount of financial assistance the
manufacturer has provided through patient prescription assistance
programs, if available.
(6) The total costs of drugs or research projects that failed to
succeed through the process to market approval.
(c) (1) 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.
(2) The information reported by a manufacturer pursuant to
paragraph (1) of subdivision (b) shall be limited to the time period
from five years prior to the filing date of an Investigational New
Drug application with the United States Food and Drug Administration
to the approval date of the New Drug Application by the United States
Food and Drug Administration. This paragraph shall not prohibit a
manufacturer from separately providing that information outside of
that time period.
(d) The information required by this section shall be filed
annually with the Office of Statewide Health Planning and
Development office 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
office 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 office 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.
(g) The office shall maintain the confidentiality of any
information submitted pursuant to this section that the director
deems to be confidential, proprietary information of the prescription
drug manufacturer, the disclosure of which would cause the
manufacturer competitive harm. This confidential proprietary
information shall not be made public by the office and is exempt from
disclosure under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code). This paragraph shall not limit the disclosure of
information that is not attributed to a specific manufacturer or that
is released in aggregate.
SEC. 2. The Legislature finds and declares that
Section 1 of this act, which adds Section 127676 to the Health and
Safety 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:
In order to protect proprietary, confidential information from
prescription drug manufacturers and to protect the integrity of the
competitive market, it is necessary that this act limit the public's
right of access to that information.