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S02544 Summary:

BILL NOS02544
 
SAME ASSAME AS A05733
 
SPONSORHANNON
 
COSPNSRORTT
 
MLTSPNSR
 
Add 278-a, Pub Health L; add 396-rrr, Gen Bus L
 
Prohibits price gouging by manufacturers of prescription drugs.
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S02544 Actions:

BILL NOS02544
 
01/13/2017REFERRED TO HEALTH
03/01/2017REPORTED AND COMMITTED TO FINANCE
01/03/2018REFERRED TO HEALTH
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S02544 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          2544
 
                               2017-2018 Regular Sessions
 
                    IN SENATE
 
                                    January 13, 2017
                                       ___________
 
        Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
          printed to be committed to the Committee on Health
 
        AN ACT to amend the public health law and the general business  law,  in
          relation to price gouging on prescription drugs
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. The public health law is amended by adding  a  new  section
     2  278-a to read as follows:
     3    §  278-a. Limitation on excessive price increases; prescription drugs:
     4  1. In the event a manufacturer, as defined in subdivision twenty-one  of
     5  section  sixty-eight  hundred  two  of  the education law, of a brand or
     6  generic drug, made available in New York, increases the wholesale acqui-
     7  sition cost (WAC) of a drug by a percent equal to or  greater  than  one
     8  hundred  percent at any one time or in the aggregate in any twelve month
     9  period:
    10    (a) The manufacturer shall, not less than thirty days prior to  insti-
    11  tuting  such  increase, notify the commissioner and the drug utilization
    12  review board established under section three  hundred  sixty-nine-bb  of
    13  the  social  services  law.  Notice shall be provided on the form estab-
    14  lished pursuant to subdivision two of this section; and
    15    (b) The commissioner shall require prior authorization  and  authorize
    16  Medicaid  managed care plans to require prior authorization for the drug
    17  effective as of the date of the price increase and  continuing  until  a
    18  determination is made by the drug utilization review board.
    19    2.  The commissioner, in consultation with the drug utilization review
    20  board, shall  produce  and  make  available  to  manufacturers  a  price
    21  increase notification form that shall elicit:
    22    (a) The most recent wholesale acquisition cost (WAC) of the drug prior
    23  to  an  increase equal to or greater than one hundred percent at any one
    24  time or in the aggregate in any twelve month period  in  either  pricing
    25  measure.  For  the  purposes  of this section wholesale acquisition cost
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08165-01-7

        S. 2544                             2
 
     1  (WAC) shall include the prices for each dosage, size or concentration of
     2  the drug offered or sold by the manufacturer;
     3    (b)  The  wholesale  acquisition cost (WAC) of the drug when exceeding
     4  the one hundred percent threshold;
     5    (c) Any material change in ingredient,  production,  or  manufacturing
     6  costs resulting in the price increase;
     7    (d) In the case of a brand drug, the expiration date of the patent;
     8    (e)  In  the case of a generic drug, whether the drug is a sole source
     9  drug; and
    10    (f) Any other information  the  manufacturer  deems  relevant  to  the
    11  board's review.
    12    3. Upon receipt of a price increase notification form, the drug utili-
    13  zation  review board shall review the price increase and make a determi-
    14  nation as to whether the price increase is excessive. In making a deter-
    15  mination the board shall consider:
    16    (a) The wholesale acquisition cost (WAC) of the drug in comparison  to
    17  any generic equivalent or therapeutically equivalent drug;
    18    (b) The FDA approved or compendium supported use of the drug and crit-
    19  ical need to the patient;
    20    (c)  Any known market factors justifying the price increase, including
    21  but not limited to:
    22    (i) whether the drug has been absent from the market for any period of
    23  time; and
    24    (ii) changes in manufacturing or regulatory requirements or costs.
    25    (d) Any material change in the prevalence or severity of  the  disease
    26  or medical condition or conditions that the drug is approved to treat;
    27    (e)  In  the  case of a brand drug, the expiration date of the patent;
    28  and
    29    (f) In the case of a generic drug, whether the drug is a  sole  source
    30  drug.
    31    4. Upon a finding by the drug utilization review board that a manufac-
    32  turer  has  instituted  an excessive price increase, (a) the board shall
    33  require prior authorization for the drug and authorize Medicaid  managed
    34  care  plans  to  require  prior authorization until the board determines
    35  otherwise; and (b) the board may refer the matter to the attorney gener-
    36  al with any information necessary for the investigation and  prosecution
    37  of  price  gouging violations under section three hundred ninety-six-rrr
    38  of the general business law. In the event the board does not  find  that
    39  the  manufacturer  has engaged in an excessive price increase, the board
    40  shall remove the requirement for prior authorization and such  authority
    41  granted  to Medicaid managed care plans to institute prior authorization
    42  under this section shall cease.
    43    § 2. The general business law is amended by adding a new section  396-
    44  rrr to read as follows:
    45    §  396-rrr. Price gouging; prescription drugs. 1. Legislative findings
    46  and declaration. The  legislature  hereby  finds  that  excessive  price
    47  increases  to prescription drugs that lack justification based on market
    48  forces create a public health risk  to  consumers  that  rely  on  these
    49  prescription  drugs.  In  order to prevent a manufacturer, as defined in
    50  subdivision twenty-one of section sixty-eight hundred two of the  educa-
    51  tion  law,  from  taking unfair advantage of consumers who rely upon and
    52  may lose access to the prescription drugs if the medication has a sudden
    53  and excessive price increase, the legislature declares that  the  public
    54  interest  requires  that  such conduct be prohibited and made subject to
    55  civil penalties.

        S. 2544                             3
 
     1    2. In order to prevent a drug manufacturer, as defined in  subdivision
     2  twenty-one of section sixty-eight hundred two of the education law, from
     3  imposing unconscionably and unjustifiably excessive price increases, the
     4  attorney  general  may,  upon  referral from the drug utilization review
     5  board  as  codified in section two hundred seventy-eight-a of the public
     6  health law, apply in the name of the people of the state of New York  to
     7  the  supreme court within the judicial district in which such violations
     8  are alleged to have occurred, on notice  of  five  days,  for  an  order
     9  enjoining or restraining commission or continuance of the alleged unlaw-
    10  ful  acts.  In any such proceeding, the court may impose a civil penalty
    11  in an amount not to  exceed  twenty-five  thousand  dollars  and,  where
    12  appropriate, order restitution to aggrieved consumers.
    13    3.  Whether a price is unconscionably and unjustifiably excessive is a
    14  question of  law  for  the  court.  The  court's  determination  that  a
    15  violation of this section has occurred shall be based upon the following
    16  factors:
    17    (a) the increase in price is unconscionably extreme;
    18    (b)  the  drug  is  vital and medically necessary to the health of the
    19  consumer;
    20    (c) the drug is a sole source drug without a  therapeutic  equivalent;
    21  and
    22    (d)  the price increase was within the control of the manufacturer and
    23  not caused by costs imposed on or factors  beyond  the  control  of  the
    24  manufacturer.
    25    § 3. This act shall take effect immediately.
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