HB18-1179: Prohibiting Price Gouging on Certain Prescription Drugs

Position: Support

Definitions:

  • Essential off-patent or generic drug is defined: as an FDA-approved Rx drug for which all exclusive marketing rights under the federal act an under the federal patent law have expired and that appears on the model list of essential medicines most recently adopted by the World Health Org, or has been deemed by US Secretary of Health and Human Services as an essential medicine. OR is actively manufactured and marketed for sale in the US by three of fewer manufacturers and that is made available for sale in this state. A drug of device combo product used for the delivery of a drug

Summary: Prohibits a pharma manufacturer or wholesaler from price gouging on sales of essential off-patent or generic drugs. Makes gouging a deceptive trade practice under the CCPA. Requires the state board of pharmacy and HCPF report suspected price gouging to the AG who will be authorized to seek subpoenas and file lawsuits with the appropriate district. Price Gouging is defined as:

an increase in the price of a Rx drug that is excessive and not justified by the cost of producing the drug, or by the cost of expanding access to the drug to promote public health and that results in consumers for whom the drug has been prescribed having no meaningful choice about whether to purchase the drug at an excessive price because of the importance of the drug to their health  

If the AG has reasonable cause to believe that a manufacturer has engaged in price gouging, then they may issue a subpoena to the manufacturer requiring they submit paperwork that includes: an itemized list of the cost of the components that are in the drug, a statement outlining the circumstances/timing of any increase in the drug up to a year preceding the price increase, a statement that lays out circumstances/timing if the manufacturer spent any money to expand access to the drug and if that improved public health outcomes, and lastly any other info the manufacturer deems relevant.

The AG then applies the appropriate district court, and if the court finds the manufacturer indeed was price gouging then they can restore money from the manufacturer back to the consumer, and potentially require that the drug is returned to the price the drug was available at prior to the gouging and make the drug available to folks covered by a health benefit plan.

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