California Bill Aims To Increase Transparency of Rx Drug Costs
Assembly member David Chiu (D-San Francisco) has introduced a bill (AB 463) that aims to increase prescription drug cost transparency, Capital Public Radio's "KXJZ News" reports (Bartolone, "KXJZ News," Capital Public Radio, 2/25).
Details of AB 463
Under the bill, drugmakers would be required to report the production costs for any drug or course of treatment that is more than $10,000 to the Office of Statewide Health Planning and Development.
Specifically, drugmakers would need to report information on costs related to:
- Clinical trials and other regulatory processes;
- Financial assistance offered to patients through various programs;
- Marketing and advertising;
- Profits attributed to the drug; and
- Research and development costs paid by the manufacturer or by grants.
The bill would require drugmakers to report the information annually by May 1.
OSHPD would produce an annual report on the data to submit to the state Legislature (Robertson, Sacramento Business Journal, 2/25).
The pricing information then would be posted online.
Chiu said that high prescription drug prices affect "the overall cost of delivering health care, threatening the long-term success of health care for all and putting enormous cost pressures on state and local governments" ("KXJZ News," Capital Public Radio, 2/25). He added, "It is incumbent upon lawmakers to ensure that we have a full understanding of the costs ... and find new avenues to achieve savings" (Sacramento Business Journal, 2/25).
However, Jeff McCombs, a pharmaceutical economics professor at the University of Southern California, said that the bill would stifle innovation. He said, "There's a lot of legislators out there that don't understand the market system, they don't understand when you make a certain change, that the companies react to that and it has downstream consequences" ("KXJZ News," Capital Public Radio, 2/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.