POLITICOPro: Steyer joins California lawmakers in battling drug prices
By Victoria Colliver
Billionaire activist Tom Steyer waded into the drug-pricing wars Wednesday, joining two California lawmakers in introducing the details of a new state bill designed to promote transparency in pharmaceutical costs.
Steyer — rumored to be considering a run for California governor — appeared at a press conference Wednesday at the State Capitol in Sacramento along with the bill's author, state Sen. Ed Hernandez, and supporters. He said now is the time for the state to take the lead on the drug-pricing issue, especially considering the proposed GOP bill to repeal Obamacare and national uncertainty around the future of health coverage.
The former hedge fund manager, who co-founded the nonpartisan think tank Next Generation, declined to clarify his political aspirations when directly asked. Instead, he emphasized his role in defeating a 2010 industry-backed state measure to suspend California’s landmark global warming law and his support of the state’s new tobacco tax, which passed in November.
After taking on oil and tobacco, he said, the pharmaceutical industry is next.
“We have consistently gone into fights where the citizens of California are being put at a disadvantage by concentrated and organized economic interests,” Steyer told POLITICO. “This is a situation where California citizens and California taxpayers are at a dramatic disadvantage compared to the pharmaceutical companies.”
Steyer plans to invest in a campaign to back Senate Bill 17 against what’s expected to be well-funded opposition from the powerful drug industry. The bill would require drugmakers to notify purchasers — state agencies, health insurers and pharmacy benefit managers — before raising prices above certain thresholds. Health plans would be required to report the proportion of premiums spent on prescription drugs. While he has yet to work out the details of his participation, it’s clear the bill’s supporters welcome Steyer's backing.
Hernandez, an optometrist and chairman of the Senate Health Committee, has been down this road before. Late last summer, just before Mylan’s price hikes for its EpiPen auto-injector dominated headlines, Hernandez pulled SB 17’s predecessor — SB1010 — from an Assembly committee after amendments significantly watered it down. It had already passed the Senate.
The new bill is only modestly different from the previous version, but Hernandez and his co-author in the Assembly, David Chiu, said they’re optimistic given the national outcry over spiking drug costs.
After furor of $1,000-per-pill hepatitis C drugs and Martin Shkreli became the poster boy for unscrupulous pharmaceutical CEOs in 2015, Bernie Sanders, Hillary Clinton and Donald Trump all made rising drug costs a key part of their presidential campaigns. While the battle over Obamacare repeal has sucked most of the air out of the health policy debate, drug pricing remains a high concern for consumers.
“With the ACA under attack, no one is holding their breath that Washington will solve the drug crisis,” said Chiu, whose own drug transparency bill died in Assembly committee last year. “California must lead again.”
California has long been trying to tackle the sky-high price of drugs — so far, without success. But changes in the membership of the state's legislature may prove to be an advantage this time. And, Hernandez said more than 20 states are now considering various forms of drug-pricing legislation.
In November, California voters rejected Proposition 61, which would have limited what state agencies could pay for medications to no more than that paid by the federal Department of Veterans Affairs. The 54-46 margin was relatively narrow, considering drug companies spent more than $109 million — more than five times that of supporters — to defeat Prop 61, making the campaign the most expensive in state history.
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