Release: Drug Pricing Transparency Bill Is Approved by Senate Health Committee

April 19, 2017

Senate Bill 17 now heads to the Senate Appropriations Committee

SACRAMENTO – Today, the Senate Health Committee approved passage of Senate Bill 17, which provides transparency on rising drug prices in California, on a vote of 7-2.

Authored by Senator Ed Hernandez, O.D. (D-West Covina), SB 17 is a first step towards more affordable and accessible prescription drugs for Californians.

“Today’s passage of SB 17 helps shine a light into the shadows of out of control drug prices. 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,” said Senator Hernandez. “They are forced to choose between paying for their prescriptions or paying their mortgage – and the public has had enough.”

Sponsored by the California Labor Federation, Health Access California, and UNITE HERE!, SB 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.

“The rising cost of prescription drugs is a top concern of working people,” said California Labor Federation Executive Secretary-Treasurer Art Pulaski. “For far too long, drug companies have operated cloaked in darkness, raising prices arbitrarily and without explanation. It’s time to shine a light on skyrocketing prescription drug costs. SB 17 is common-sense legislation that brings much-needed transparency to drug costs. California’s workers demand that the legislature acts to ensure we are able to access affordable prescription drugs that our families depend upon.”

Currently, Big Pharma can increase the prices of their signature drugs suddenly and with no justification. Consider EpiPen, the injector that can save the lives of people who suffer from allergic reactions. In the decade since Mylan acquired the rights to EpiPen, the list price has increased 17 times. What cost $90.28 in 2007 now costs $608.62 today. This medicine costs about $1 to produce.

SB 17 has amassed a diverse support coalition of over 80 consumer, business, labor, local government and health care professional organizations.

“With each new prescription drug price spike, the public pressure for a policy solution only grows. This year, we have new momentum and a legislature with new members and margins to make a difference on prescription drug prices.” said Health Access California Executive Director Anthony Wright. “The passage of SB 17 in the Senate Health Committee takes us towards better transparency on pharmaceuticals—needed notice and disclosure that we expect from the other parts of the health industry.”

While other sectors of the health care 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.

Senator Hernandez has championed transparency in drug prices. Last year’s attempts to pass a similar law in California, SB 1010, was derailed by industry opposition.

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For more information, please view the SB 17 fact sheet and support list.