BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1010 (Hernandez) - Health care: prescription drug costs
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|Version: March 30, 2016 |Policy Vote: HEALTH 7 - 2 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 27, 2016 |Consultant: Brendan McCarthy |
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Bill
Summary: SB 1010 would require health plans and health insurers
that report information on premium rates to their regulator to
also include specified information relating to prescription drug
spending. The bill would require drug manufacturers to report to
state purchasers of health care services when drug prices are
going to increase by more than 10% or when new drugs costing
more than $10,000 per course of treatment are going to be
introduced to the market.
*********** ANALYSIS ADDENDUM - SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on May 27, 2016
Fiscal
Impact:
One-time costs of $220,000 and ongoing costs of $250,000 per
year for review of drug pricing information submitted by
health plans and to report to the Legislature by the
SB 1010 (Hernandez) Page 1 of
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Department of Managed Health Care (Managed Care Fund). The
costs above include contract costs to study the economic
impact of drug prices on health care costs.
Likely ongoing costs in the low hundreds of thousands per year
for review of drug pricing information submitted by health
insurers and to report to the Legislature by the Department of
Insurance (Insurance Fund).
Unknown costs for enforcement of the reporting requirement on
drug manufacturers by the Office of Statewide Health Planning
and Development (California Health Data and Planning Fund).
The bill places a requirement on drug manufacturers to report
information on prices to state health care purchasers. The
bill places this provision within the body of law overseen by
the Office. However, the Office indicates that the bill, as
drafted, does not give the Office legal authority to enforce
this reporting requirement.
Author
Amendments: Make a number of changes to the information that
must be reported by health plans, health insurers, and drug
manufacturer. For example, the amendments eliminate the
requirement that drug manufacturers disclose price information
before FDA approval, raise the reporting threshold for generic
drugs to 25% price increases, and eliminate the requirement for
drug manufacturers to disclose information on public subsidies.
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