BILL ANALYSIS Ó
AB 2711
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2711 (Chiu) - As Amended April 6, 2016
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|Policy |Accountability and |Vote:|9 - 0 |
|Committee: |Administrative Review | | |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill:
1)Reinstates a previously repealed requirement for the
Department of General Services (DGS) to report to the
Legislature, by July 1, 2017 on its prescription drug bulk
purchasing program.
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2)Requires the report to include, but not be limited to, all of
the following:
a) The number and description of entities that participate
in the program;
b) The number and description of contracts with
manufacturers and suppliers, including any discounts,
rebates or refunds obtained;
c) A description of other cost containment strategies that
have been, or will be, implemented; and,
d) Estimates of the costs and savings associated with the
program.
FISCAL EFFECT:
One-time special fund costs to DGS of around $50,000.
(DGS cautions that, if the bill is interpreted to require DGS to
disclose contract-by-contract detail on the discounts, rebates,
and refunds obtained, the department anticipates that
pharmaceutical suppliers would refuse to continue to provide
preferential pricing to DGS, thus significantly increasing drug
costs to participating state and local agencies.)
COMMENTS:
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1)Background. SB 1315 (Sher), Chapter 483, Statutes of 2002,
authorized DGS to administer and implement a prescription drug
bulk purchasing program, also referred to as the statewide
pharmaceutical program (SPP). The SPP allows state and local
governmental entities to access contracts for pharmaceutical
products and medical or surgical supplies. State prisons,
state hospitals, and state developmental centers are required
to purchase drugs through the SPP. Other participating
agencies include California State University (CSU), California
Highway Patrol, California Emergency Medical Services
Authority, and the California Department of Veterans Affairs.
SB 1315 also directed DGS to report specific information about
the SPP to the Legislature by February 1, 2005. In 2009, DGS
sponsored legislation, AB 1311 (Duvall), Chapter 284, Statutes
of 2009, that repealed reporting requirements it deemed
unnecessary to operations, including the SPP report.
2)Purpose. According to the author, reinstating the report will
provide "important and timely information necessary for the
development of policies that will ensure access to affordable
medications and deliver on the promise of health care coverage
and affordability."
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081
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