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S05262 Summary:

Add 396-rrr, Gen Bus L
Relates to price gouging of medicine.
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S05262 Actions:

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S05262 Memo:

Memo not available
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S05262 Text:

                STATE OF NEW YORK
                               2017-2018 Regular Sessions
                    IN SENATE
                                     March 17, 2017
        Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
          printed to be committed to the Committee on Consumer Protection
        AN ACT to amend the general business law, in relation to the price goug-
          ing of medicine
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. The general business law is amended by adding a new section
     2  396-rrr to read as follows:
     3    §  396-rrr.  Price  gouging  of  medicine. 1. For the purposes of this
     4  section, "drug subject to a shortage" shall mean  any  drug  or  medical
     5  product  intended  for human use publicly reported as being subject to a
     6  shortage by the U.S.  food  and  drug  administration  on  its  website,
     7  provided,  however, that a drug or medical product shall only be consid-
     8  ered a "drug subject to a shortage" during the period of time that  such
     9  drug or medical product is listed as being subject to a shortage on such
    10  website.
    11    2.  No party within the chain of distribution of any drug subject to a
    12  shortage shall sell or offer to sell any such drug subject to a shortage
    13  for an amount which represents an unconscionably excessive price.
    14    3. Whether a price is unconscionably excessive is a  question  of  law
    15  for the court.
    16    (a)  The  court's  determination  that a violation of this section has
    17  occurred shall be based on any of the following factors:
    18    (i) that the amount of the excess in price is unconscionably extreme;
    19    (ii) that there was an exercise of unfair leverage  or  unconscionable
    20  means; or
    21    (iii)  a  combination of both factors in subparagraphs (i) and (ii) of
    22  this paragraph.
    23    (b) In any proceeding commenced pursuant to subdivision four  of  this
    24  section, prima facie proof that a violation of this section has occurred
    25  shall include evidence that:
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 5262                             2
     1    (i)  the amount charged represents a gross disparity between the price
     2  of the drug subject to a shortage which was the subject  of  the  trans-
     3  action and their value measured by the price at which such drug was sold
     4  or  offered  for  sale  by the defendant in the usual course of business
     5  immediately prior to the onset of the shortage; and
     6    (ii)  the  amount charged grossly exceeded the price at which the same
     7  or similar drug subject to a shortage was readily  obtainable  by  other
     8  purchasers  in  the trade area. A defendant may rebut a prima facie case
     9  with evidence that additional  costs  not  within  the  control  of  the
    10  defendant were imposed on the defendant for the drug subject to a short-
    11  age.
    12    4.  Where a violation of this section is alleged to have occurred, the
    13  attorney general may apply in the name of the People of the State of New
    14  York to the supreme court within the judicial  district  in  which  such
    15  violation  is  alleged  to have occurred, on notice of five days, for an
    16  order enjoining or restraining commission or continuance of the  alleged
    17  unlawful  acts.  In  any such proceeding, the court shall impose a civil
    18  penalty in an amount not to exceed one  hundred  thousand  dollars  and,
    19  where appropriate, order restitution to aggrieved consumers.
    20    5.  Prior  to applying for an order from the supreme court pursuant to
    21  subdivision four of this section, the attorney general, in  consultation
    22  with  the  department  of  health,  shall  consider the pricing dynamics
    23  unique to the small and independent distributors within the supply chain
    24  including, but not limited to, the price charged by the end use  dispen-
    25  ser relative to its acquisition cost.
    26    § 2. This act shall take effect immediately.
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