Release: Diverse Coalition Supports Drug Pricing Transparency Bill

March 15, 2017

SB 17 shines a light on rising drug prices in California

SACRAMENTOSenator Ed Hernandez (D-West Covina), joined by co-author Assemblymember David Chiu (D-San Francisco) and NextGen Climate President Tom Steyer, along with numerous other supporters, released his new drug pricing transparency legislation, renewing his effort to shine a light on rising drug prices in California.

Senate Bill 17 will promote transparency in the health care system by requiring drug makers to give notice to purchasers before raising prices and requiring health plans to report the proportion of the premiums spent on prescription drugs.

“We deserve transparency in drug prices because the prices drug companies charge for their products have nothing to do with effectiveness, research costs or even to changes in manufacturing costs,” said Senate Health Committee Chair Senator Hernandez. “The market for prescription drugs is badly broken. Patients who need access to a particular drug don’t have the option to forgo treatment or find another option when the price gets too high.”

Millions of Californians have health insurance, but affordability remains a critical issue. The favorite tactic of drug companies is to help consumers with their co-payments, but all this does is shield consumers from the true cost of the drug while driving up insurance premiums for everyone.

Despite growing attention on these egregious price increases, the prescription drug industry has shown no shame or remorse. Deflazacort, newly approved by the FDA to treat Duchenne Muscular Dystrophy, a rare and fatal disease that impacts 12,000 boys in the country, is the latest drug causing an uproar for families across the country because a year of treatment is estimated to cost $89,000.  

“Californians deserve to know why their medicine costs so much,” said Assemblymember Chiu, who has been working on drug costs since taking office in 2014. “With the ACA’s health care gains under attack in Washington, D.C., we must do everything we can in California to fight real health care challenges like the skyrocketing costs of prescription drugs. This bill will help lift the veil on soaring drug prices so we can identify meaningful strategies to ensure access to life-saving treatments. I look forward to working this year with Sen. Hernandez and the broad coalition of advocates supporting SB 17.”

NextGen Climate President Steyer said SB 17 is a continuation of his fight against special interests.

"Behind closed doors, corporate pharmaceutical executives make life-and-death decisions for millions of Californians,” said NextGen Climate President Steyer. “This important legislation will help protect our families by introducing transparency and fairness to pricing of essential, lifesaving medicines. It is an essential first step to rein in skyrocketing prescription drug prices."

Sponsored by the California Labor Federation and Health Access California, SB 17 helps ensure hard working Californians are not being gouged by Big Pharma’s high drug prices.

“With the President and Congress focused on tax and regulatory giveaways to Big Pharma rather than on any relief for consumers, it is more urgent than ever for California to take a lead on prescription drug price transparency,” said Health Access California Executive Director Anthony Wright. “This legislation will provide purchasers with the information needed to better respond to prescription drug price hikes and negotiate better deals for patients.”

“Skyrocketing prescription drug prices are hammering working people and driving up the cost of health care for everyone,” said California Labor Federation Executive Secretary-Treasurer Art Pulaski. “When someone is struggling with a life-threatening disease, like cancer or diabetes, they should not have to make the choice between paying for treatment and paying rent. SB 17 brings much-needed transparency to prescription drug pricing to help lower drug prices and contain health care costs.”

While other sectors of the healthcare system have safeguards and transparency requirements in place with regards to cost drivers, the pharmaceutical industry has no such mechanisms in place, leading to unsustainable increases in the cost of prescription drugs.

“Pharmaceutical drug costs comprise a growing proportion of the more than $45 billion our members are spending on health care every year,” said Pacific Business Group on Health Senior Policy Manager Kristof Stremikis. “SB 17 will help us promote value-based purchasing strategies that will return significant savings to millions of California consumers.”

Many in the health care industry have had direct experience with the increasing cost of drugs.

“As a physician I see the impact high drug prices have on patients first hand. The price of prescription drugs continues to rise in the United States and has become a strain on patients and families. The reality is that the current market for drugs in the U.S. is broken” said Dr. Sameer Awsare, MD, FACP, Kaiser Permanente. “Price gouging in the prescription drug market has made prescription drugs less affordable and accessible. We view this as a threat to the health of our patients. This bill will bring much needed transparency to a broken market.”

Senator Hernandez has championed the need for transparency in drug prices. SB 17 is a reintroduction of SB 1010 with some changes based on lessons learned from last year.

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For more information, please view the SB 17 Fact Sheet. Watch the archived press conference