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 14977.1 of the Government Code is
2amended to read:
(a) Notwithstanding any otherbegin delete provision ofend delete law, the
4Department of General Services may enter into exclusive or
5nonexclusive contracts on a bid or negotiated basis with
6manufacturers and suppliers of single source or multisource drugs.
7The department may obtain from those manufacturers and
8suppliers, discounts, rebates, or refunds based on quantities
9purchased insofar as permissible under federal law. Contracts
10entered into pursuant to this chapter may include price discounts,
11rebates, refunds, or other strategies aimed at managing escalating
12prescription drug prices.
13(b) Contracts under this chapter shall be exempt from Chapter
142 (commencing
with Section 10290) of Part 2 of Division 2 of the
15Public Contract Code.
16(c) The financial terms of a contract executed pursuant to this
17section shall be confidential and shall be exempt from disclosure
18under the California Public Records Act (Chapter 3.5 (commencing
19with Section 6250) of Division 7 of Title 1).
The Legislature finds and declares that Section 1 of
21this act, which amends Section 14977.1 of the Government Code,
22imposes a limitation on the public’s right of access to the meetings
23of public bodies or the writings of public officials and agencies
24within the meaning of Section 3 of Article I of the California
25Constitution. Pursuant to that constitutional provision, the
26Legislature makes the following findings to demonstrate the interest
27protected by this limitation and the need for protecting that interest:
28It is in the state’s financial interest to keep pharmaceutical pricing
29information confidential when there is a contract between the
30Department of General Services and a pharmaceutical company.
31As is the case with the existing parallel provision in the
Medi-Cal
32drug program, companies are more aggressive in their pricing,
33given the size of the California market, when it is clear that neither
34a competitor nor other payer has access to this information. Other
35states and companies have sought to retrieve this sensitive pricing
P3 1information, and a statutory confidentiality protection will ensure
2that drug companies remain aggressive in their negotiations with
3the State of California. Additionally, the state will realize further
4savings when it no longer has to process, and ultimately reject,
5requests for this information.
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