STATE OF NEW YORK ________________________________________________________________________ 5946 2019-2020 Regular Sessions IN ASSEMBLY February 20, 2019 ___________ Introduced by M. of A. CRESPO -- read once and referred to the Committee on Consumer Affairs and Protection AN ACT to amend the general business law, in relation to the price goug- ing of medicine The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The general business law is amended by adding a new section 2 396-rrr to read as follows: 3 § 396-rrr. Price gouging of medicine. 1. For the purposes of this 4 section, "drug subject to a shortage" shall mean any drug or medical 5 product intended for human use publicly reported as being subject to a 6 shortage by the U.S. food and drug administration on its website, 7 provided, however, that a drug or medical product shall only be consid- 8 ered a "drug subject to a shortage" during the period of time that such 9 drug or medical product is listed as being subject to a shortage on such 10 website. 11 2. No party within the chain of distribution of any drug subject to a 12 shortage shall sell or offer to sell any such drug subject to a shortage 13 for an amount which represents an unconscionably excessive price. 14 3. Whether a price is unconscionably excessive is a question of law 15 for the court. 16 (a) The court's determination that a violation of this section has 17 occurred shall be based on any of the following factors: 18 (i) that the amount of the excess in price is unconscionably extreme; 19 (ii) that there was an exercise of unfair leverage or unconscionable 20 means; or 21 (iii) a combination of both factors in subparagraphs (i) and (ii) of 22 this paragraph. 23 (b) In any proceeding commenced pursuant to subdivision four of this 24 section, prima facie proof that a violation of this section has occurred 25 shall include evidence that: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09882-01-9

A. 5946 2 1 (i) the amount charged represents a gross disparity between the price 2 of the drug subject to a shortage which was the subject of the trans- 3 action and their value measured by the price at which such drug was sold 4 or offered for sale by the defendant in the usual course of business 5 immediately prior to the onset of the shortage; and 6 (ii) the amount charged grossly exceeded the price at which the same 7 or similar drug subject to a shortage was readily obtainable by other 8 purchasers in the trade area. A defendant may rebut a prima facie case 9 with evidence that additional costs not within the control of the 10 defendant were imposed on the defendant for the drug subject to a short- 11 age. 12 4. (a) Where a violation of this section is alleged to have occurred, 13 the attorney general may apply in the name of the People of the State of 14 New York to the supreme court within the judicial district in which such 15 violation is alleged to have occurred, on notice of five days, for an 16 order enjoining or restraining commission or continuance of the alleged 17 unlawful acts. In any such proceeding, the court shall impose a civil 18 penalty in an amount not to exceed one hundred thousand dollars and, 19 where appropriate, order restitution to aggrieved consumers. 20 (b) In addition to any action brought by the attorney general pursuant 21 to paragraph (a) of this subdivision, a person injured by a violation of 22 this section may bring an action to recover damages. The court may also 23 award reasonable attorneys fees to a prevailing plaintiff. 24 § 2. This act shall take effect immediately.

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