BILL ANALYSIS �
SB 1052
Page 1
SENATE THIRD READING
SB 1052 (Torres)
As Amended August 18, 2014
Majority vote
SENATE VOTE :30-6
HEALTH 14-4 APPROPRIATIONS 12-0
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|Ayes:|Pan, Ammiano, Bonilla, |Ayes:|Gatto, Bocanegra, |
| |Bonta, Chesbro, Gomez, | |Bradford, |
| |Gonzalez, | |Ian Calderon, Campos, |
| |Roger Hern�ndez, | |Eggman, Gomez, Holden, |
| |Lowenthal, Nazarian, | |Pan, Quirk, |
| |Waldron, Ridley-Thomas, | |Ridley-Thomas, Weber |
| |Rodriguez, Wieckowski | | |
| | | | |
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|Nays:|Maienschein, Ch�vez, |
| |Mansoor, Patterson |
| | |
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SUMMARY : Requires health plans and insurers to use a standard
drug formulary template to display their drug formularies and to
post their formularies on their Web sites. Requires the
California Health Benefit Exchange (known as Covered California)
to provide links to the formularies. Specifically, this bill :
1)Requires health plans and insurers that provide prescription
drug benefits and maintain drug formularies to post the
formulary or formularies for each product offered by the plan
on the plan's website in a manner that is accessible and
searchable by potential enrollees, enrollees, and providers.
2)Requires the Department of Managed Health Care (DMHC) and the
California Department of Insurance (CDI) to develop a standard
formulary template that contains specified information by
January 1, 2017.
3)Requires health plans and insurers to use the standard
formulary template within six months of the date the template
is developed by DMHC and CDI.
SB 1052
Page 2
4)Requires health plans and insurers to update their posted
formularies with any change to those formularies on a monthly
basis.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Potential one-time costs up to $150,000 to adopt regulations
by CDI (Insurance Fund).
2)One-time costs of $250,000 to develop standards and adopt
regulations by DMHC (Managed Care Fund).
3)Ongoing monitoring and enforcement costs to DMHC and CDI
(Managed Care Fund/Insurance Fund) could be in the range of
$50,000 per year for each department for the first two years,
but should be less on an ongoing basis once systems are
routinized.
COMMENTS : The author writes that, for people with serious and
chronic conditions, making sure that the health insurance plan
they choose covers the prescription drugs they need is
particularly important. The author states that all of the
health plans available through Covered California must include
prescription drug coverage, but the drugs that are covered vary
by plan. The author argues that, since many specialty drugs can
be extremely expensive, making sure that the plan covers the
specific drugs an individual takes can have an impact on a
consumer's finances. The author states, with the increasing
complexity of drug formularies, many individuals living with
chronic conditions cannot obtain the information they need to
confirm that their drugs are covered.
The American Cancer Society Cancer Action Network, the sponsor
of this bill, writes that currently, obtaining information to
confirm whether a person's drugs are covered by a qualified
health plan is impossible or incredibly time consuming. BayBio
and Biocom, in support, assert this bill is especially important
for patients who may have gone through a number of therapeutics
before finding a specific product that best manages their
condition. For these people, these supporters argue, having
coverage for the right drug becomes a basic quality of life
issue.
SB 1052
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In opposition, health plans and insurers argue that this bill's
requirements are unworkable and in conflict with other
requirements related to formularies and suggest that
policymakers should instead focus on controlling the underlying
cost pressures of prescription drugs, considering the alarmingly
high price tag of many new specialty drugs. Pharmaceutical
benefit managers, also in opposition, argue that the standard
formulary template required by this bill differs from standard
formats used nationwide and that implementation of this bill
will be technologically difficult.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0004843