PhRMA launches lawsuit against the state of California over anti-price hike bill

pharmafile | December 11, 2017 | News story | Sales and Marketing Drug pricing, PhRMA, california, pharma, price hikes 

The state of California has become the target of legal action after the lobbying group Pharmaceutical Research and Manufacturers of America (PhRMA) launched a lawsuit over a new law which requires drugmakers to notify the state and health insurers of increases to drug prices.

The law in question, California’s Senate Bill 17, was signed into law by Governor Jerry Brown in October and is designed to provide greater transparency from manufacturers on potential price hikes, defined as an increase of more than 16% in two years.

“Californians have a right to know why their medical costs are out of control, especially when pharmaceutical profits are soaring,” Brown said upon signing the bill. “This measure is a step at bringing transparency, truth, exposure to a very important part of our lives – that is the cost of prescription drugs.”

However, PhRMA has collectively spent $16 million to oppose the bill, claiming that it “attempts to dictate national health care policy related to drug prices in violation of the United States Constitution, singles out drug manufacturers as the sole determinant of drug costs despite the significant role many other entities play in the costs patients pay and will cause market distortions such as drug stockpiling and reduced competition.”

“In this time of great innovation and advancement in therapies, we understand how important it is for patients to have affordable access to the medicines they need,” commented James C Stansel, Executive Vice President of PhRMA, “but SB 17 is not only poorly conceived, it also misses the mark with its myopic focus on manufacturers and provisions that are in clear violation of the Constitution. The law creates bureaucracy, thwarts private market competition, and ignores the role of insurers, pharmacy benefit managers and hospitals in what patients pay for their medicines.”

The bill is due to come into action on 1 January, 2019.

Matt Fellows

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