SB 1010: Shining a Light on Drug Prices

SB 1010 is a common-sense approach to providing transparency in drug pricing which will ensure affordable and accessible prescription drugs for Californians.   

Why Transparency?

  • Transparency works.  When we’ve required transparency in pricing on other sectors of the industry, prices have stabilized or have decreased. 
  • Value of knowing. It gives state purchasers and employers the tools to effectively negotiate with drug companies for fair prices.
  • Level the playing field. We’ve required other big sectors to participate in shedding light on cost drivers in order to help control cost increases – hospitals, plans, and providers all have transparency requirements. This is the only major sector of the health care system that doesn’t have these types of requirements.

About SB 1010

Sponsored by labor and consumers, this bill will promote transparency in the health care system by requiring drug makers to give prior notice to purchasers before raising prices and requiring health plans to report the proportion of the premiums that we pay which is spent on prescription drugs.

Ensures Advanced Notice for Pricing

  • Drug makers must notify public and private purchasers before significant increase in prices
  • Drug makers must justify those price increases and provide previous price increases for their products

Records Drug Spending Information

  • Health plans must report information on drugs purchasing trends, including the most prescribed, the most expensive, and the highest increases in spending
  • Health plans must report the percentage of premiums spent on drugs and premium changes related to drug spending

Offers Access to Spending Data

  • Regulators must issue public reports on cost drivers and drug spending
  • Lawmakers must hold annual hearings on drug pricing

Support

A broad coalition has signed on in support of SB 1010, including: 

Consumer and Patient Groups

  • AARP
  • California Alliance for Retired Americans
  • California Pan-Ethnic Health Network
  • California State Retirees
  • CalPERS
  • CALPIRG
  • Consumers Union
  • Courage Campaign
  • Health Access California (co-sponsor)
  • National Multiple Sclerosis Society – CA Action Network
  • Project Inform

Healthcare

  • AIDS Healthcare Foundation
  • America’s Health Insurance Plans
  • Association of California Life and Health Insurance Companies
  • Blue Shield of California
  • California Association of Health Plans
  • California Medical Association    
  • California Nurses Association
  • California Optometric Association
  • Kaiser Permanente
  • Molina Healthcare of California
  • Pharmaceutical Care Management Association

Business Groups

  • Carson Chamber of Commerce
  • Fresno Chamber of Commerce
  • Greater Riverside Chambers of Commerce
  • Industry Manufactures Council 
  • Los Angeles Area Chamber of Commerce
  • Oakland Metropolitan Chamber of Commerce
  • Ontario Chamber of Commerce
  • Pacific Business Group on Health
  • Redondo Chamber of Commerce
  • Sacramento Metropolitan Chamber of Commerce
  • San Jose Silicon Valley Chamber of Commerce
  • San Ramon Chamber of Commerce
  • Silicon Valley Employers Forum
  • Small Business Majority
  • South Bay Association of Chambers of Commerce
  • Valley Industry and Commerce Association 

Labor

  • Association of California State Supervisors
  • California Conference Board of the Amalgamated Transit Union
  • California Conference of Machinists
  • California Labor Federation, AFL-CIO (co-sponsor)
  • California Professional Firefighters
  • California School Employees Association
  • California Teachers Association
  • California Teamsters Public Affairs Council
  • Central Labor Council of Contra Costa County
  • Engineers and Scientists of California, IFPTE Local 20
  • International Longshore and Warehouse Union
  • LIUNA Locals 777 & 792
  • North Bay Labor Council, AFL-CIO
  • Professional and Technical Engineers, IFPTE Local 21
  • San Mateo County Central Labor Council
  • SEIU California
  • State Building and Construction Trades Council
  • UNITE HERE!
  • United Nurses Associations of California/Union of Health Care Professionals
  • Utility Workers Union of America

Local Government

  • City and County of San Francisco
  • League of California Cities
  • School Employers Association of California
  • Small School Districts Association

Support Editorials

What Others Are Saying

Organizations representing a diverse set of Californians are standing up in support of SB 1010:

“Every dollar that goes to pay for health care benefits for workers is a dollar that is not going into their pockets in wages. Prescription drug price increases are driving health care costs and we have to address this problem now.”

– California Labor Federation (Sponsor)

“California has made significant gains in reducing our state’s number of uninsured over the past several years, but to sustain this progress we must address affordability and the underlying costs that impact the price of coverage.”

– Los Angeles Area Chamber of Commerce

“Public anger is building on the issue of prescription drug costs -- whether it is hiking the prices for decades-old drugs, or the extreme costs of some new medications. More and more patients and payers are questioning these drug costs, and politicians will ignore that public anger at their peril."

– Anthony Wright, Health Access

“SB 1010 is a greatly needed and long overdue piece of legislation.”

– California School Employees Association

“Access to quality MS care is currently hampered by high and escalating prices of disease modifying drug treatments.”

National Multiple Sclerosis Society

“86% of Americans support requiring drug companies to release information to the public on how they set their prices.”

Kaiser Family Foundation

“This bill will help our trust funds, our members, and all Californians better understand pharmaceutical pricing and provide them with the tools to diminish or avoid price-gouging.”

Laborers' International Union of North America

“Spending increases driven by high and growing drug prices will eventually affect all Americans in some way. Those with private health insurance will pay higher premiums and cost sharing for their health care coverage. Over time, it could also lead to higher taxes and/or cuts to public programs to accommodate increased government spending.”

AARP

“7 in 10 Americans think drug prices are ‘unreasonable.’” Kaiser Family Foundation

“The 90,000 nurses of the California Nurses Association are pleased to support SB 1010 (Hernandez) Drug Pricing Transparency, to promote transparency in the health care system...” California Nurses Association

“SB 1010 protects competition and offers a reasonable level of transparency while also ensuring drug manufacturers can keep proprietary information confidential.”

Small Business Majority