Californians are going to get a much better understanding of how prescriptions drugs are impacting healthcare premiums thanks to new legislation that was just signed into law by Governor Jerry Brown.
According to Reuters, the new law requires pharmaceutical companies to provide data twice annually to the state of California that illustrates how costs are impacting premiums. On top of that, the law also requires companies to provide a 60-day notice if the price of a prescription rises past 16% over the course of two years.
Governor Brown celebrated the new law, extolling its importance and virtues in a statement, which was published on his website. He wrote, "Californians have a right to know why their medication costs are out of control, especially when pharmaceutical profits are soaring." The Sacramento Bee also reports that Brown addressed pharmaceutical companies after signing the bill, saying, "What I have to say to the pharmaceutical companies [is] ‘Yes, you are part of this great engine of creativity and innovation and productivity.’ That’s the good. But the bad is given this technology, given the global market, fewer and fewer people at the top are getting more and more."
The goal of the bill is to increase transparency, allowing the state of California a look into how much its citizens spend on prescription medication. It's a growing concern for the entire country, as CBS News heralded a potential 17% rise in drug prices last December. According to them, these increases come despite Congressional inquiries into where that money is going, and have resulted in lawmakers scrambling for ways to alleviate the pressure on citizens to spend more and more for their needed medication. One such measure, suggested then, would be to allow patients to temporarily import their medication from other countries if the cost for medication here happens to inflate past a certain amount. This, like many of the other solutions, were made with competition in mind as a measure to get pharmaceutical companies to lower their prices.
With the passage of California's law today, though, those companies are voicing their displeasure with the added transparency, saying that it won't achieve the goal that the state is hoping for. Biotechnology Innovation Organization (BIO) shared a statement with Reuters. It reads, in part: "This law will neither provide meaningful information to patients nor lower prescription drug costs... [it] seriously jeopardizes the future of California’s leadership in this innovative industry."
Priscilla VanderVeer, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, expressed similar sentiments to the Sacramento Bee. She said, "There is no evidence that SB 17 will lower drug costs for patients because it does not shed light on the large rebates and discounts insurance companies and pharmacy benefit managers are receiving that are not always being passed on to patients. Nothing in SB 17 will help patients get the benefits of the savings that insurance companies and PBMs [pharmacy benefit managers] are getting."
The Examiner shared further comments from VanderVeer, where she said that the group was still interested in combating the rising costs of prescription drugs. She said, "It’s time to move beyond creating new, costly bureaucratic programs that don’t make a dent in patients’ costs for medicines."