Coalition Waits for Governor Brown's Action on Drug Pricing Bill

Healthcare providers, consumer and patient advocates, unions, and insurance companies are all waiting and hoping that California Governor Jerry Brown will sign a drug price transparency bill that will also requires drug companies to justify price hikes.

Rising drug prices are a huge problem for consumers both in California and across the nation. The bill, SB 17, requires drug companies to provide state agencies and health insurers with at least 60 days' notice before they raise a drug's price by 16% or more over a period of two years. The companies would also have to explain why the price increases are necessary, and report what percentage of premium increases are caused by drug spending.

State Senator Ed Hernandez, the bill's author, hailed it as a landmark piece of legislation that is "going to send shock waves throughout the country. This bill is an excellent step and would require substantial price transparency, but much work remains to be done. Big Pharma has fought bitterly against the proposal, spending over $16.8 million of lobbying against this bill and other California bills since 2015. They have hired 45 lobbyists or firms to stop it.

California is not the only state to consider measures that promote transparency and reduce drug prices. This year Maryland, Nevada, New York, and Vermont have passed similar laws. But since California is so large and influential, any law here will have a disproportionate impact. If drug companies dislike price disclosure laws in small states, they can simply decide to not sell their drugs there. But California's market is too big for that. And despite the fact that this is a modest measure intended mainly to provide information, the drug industry is advertising and lobbying against it with all their might.

The bill was overwhelmingly approved by the State Senate and Assembly, and is now before Governor Brown. He has until October 15th to sign it into law. We urge him to sign it immediately and strike a blow for consumers and lower drug prices that will be felt across the country.