Enacts the pharmaceutical cost transparency act of 2016

1 Co-sponsor

• Bill Perkins

Title of bill

An act to amend the public health law, in relation to establishing the pharmaceutical cost transparency act of 2016

Purpose

To make information available to the public about the cost of ultra-high-priced pharmaceuticals

Summary of provisions

Section 1. Establishes the pharmaceutical transparency act of 2016.

Section 2 Amends the public health law by adding a new section, 278-a. Legislative intent, including annual cost reporting on the most expensive drugs Provides that each manufacturer of a prescription drug that is made available in New York State, that has a wholesale acquisition cost of ten thousand dollars shall file an annual report with the department no later than May 1 of each year on a form prescribed by the department. Specifies the content of such report, including but not limited to the total cost for the production of each drug; the total research and development costs for each drug; and the total costs of clinical trials and other regulatory costs for each drug. Requires that all of the information in the report shall be itemized by manufacturer and audited by a fully independent third party prior to filing. Provides that the department shall issue an annual report to the legislature and that such report shall be posted on the department's website. Requires the department to convene an advisory panel to develop the required form Describes the members of such panel.

Section 3. Effective date

Existing law

None

Justification

The New York Times Editorial on May, 5 2016 entitled "Runaway Drug Prices" described the outrageous costs charged to consumers for prescription drugs. When the Medicare Part D prescription drug plan was signed into law, it specifically prohibited the federal government from negotiating for the best prices with the drug manufacturers According to the Editorial, "Spending on all prescription drugs..accounts for a tenth of the nation's total health spending."

Pharmaceutical companies have long maintained that the exorbitant prices are needed in order to cover the costs associated with research, development and clinical trials. However, neither the consumers who need these prescriptions, or insurance companies, including Medicare nor Medicaid who pay for them, have any idea if what the pharmaceuticals contend is actually true.

This bill would bring transparency to an area of health care spending that for too long has been hidden from the public. If a prescription drug demands an outrageous price tag, the public, insurers and federal, state and local governments, should have access to the information that supposedly justifies the cost

This legislation would require that each manufacturer of a prescription drug that is made available in New York State, that has a wholesale acquisition cost of ten thousand dollars shall file an annual report with the department no later than May 1 of each year. The report will include information regarding the total costs for each drug for: production; research and development; clinical trials and other regulatory costs; materials, manufacturing and administration; costs paid by other entities, including federal, state or other governmental programs; other costs to acquire the drug; total marketing and advertising costs; a cumulative annual history of the average wholesale price; total profits derived from the sale of the drug; and the total amount of financial assistance provided by the manufacturer, if available.

Legislative history

New Bill

Fiscal implications

None to State

Local fiscal implications

To be determined

Effective date

Immediately