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California enacts new drug price transparency law

Governor Jerry Brown signed a law requiring drug companies operating in California to report price hikes in prescription medicines in certain instances. Thirty six other states have introduced bills on the issue in the absence of federal action to curtain drug price hikes. (Reuters, October 9, 2017, by Reuters Staff)

The law forces drug companies to notify insurers before price hikes of over 16 percent over a two-year period. Drug companies would have to justify the increases. (The Hill, October 9, 2017i, by Rachel Roubein)

The pharmaceutical industry responded with the statement, “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 being passed on to patients. Nothing in SB 17 will help patients get the benefits of the savings that insurance companies are getting.” (The Washington Examiner, October 10, 2017, by Kimberly Leonard)

For earlier FAC coverage on the issue, click here and here.

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