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AB-265 Prescription drugs: prohibition on price discount. (2017-2018)

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Date Published: 06/27/2017 09:00 PM
AB265:v93#DOCUMENT

Amended  IN  Senate  June 27, 2017
Amended  IN  Senate  June 22, 2017
Amended  IN  Assembly  May 30, 2017
Amended  IN  Assembly  May 10, 2017
Amended  IN  Assembly  April 26, 2017
Amended  IN  Assembly  March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 265


Introduced by Assembly Member Wood
(Coauthor: Assembly Member Chiu)

January 31, 2017


An act to add Division 114 (commencing with Section 132000) to the Health and Safety Code, relating to public health.


LEGISLATIVE COUNSEL'S DIGEST


AB 265, as amended, Wood. Prescription drugs: prohibition on price discount.

(1)Existing

Existing law regulates the packaging, labeling, and advertising of drugs and devices.
This bill would prohibit, except as provided, a person who manufactures a prescription drug from offering in California any discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses associated with his or her insurance coverage, including, but not limited to, a copayment, coinsurance, or deductible, for any prescription drug if a lower cost generic drug is covered under the individual’s health plan on a lower cost-sharing tier that is designated as therapeutically equivalent to, or interchangeable with, the prescription drug manufactured by that person or if the active ingredients of the drug are regulated by the federal Food and Drug Administration, are available without prescription at a lower cost, and are not otherwise contraindicated for the condition for which the prescription drug is approved.

(2)Under existing law, it is unlawful for licensed healing arts practitioners, except as specified, to offer, deliver, receive, or accept any rebate, refund, commission, preference, patronage dividend, discount, or other consideration, in the form of money or otherwise, as compensation or inducement for referring patients, clients, or customers to any person. Existing law makes a violation of this provision a public offense punishable upon a first conviction by imprisonment, as specified, or a fine not exceeding $50,000, or by imprisonment and that fine.

This bill would require a violation of the prohibitions against offering a discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses described above to be treated as a violation of these provisions and subject to the same punishment for each separate violation. The bill would require enforcement of a violation of those prohibitions only upon receipt of a complaint that alleges that violation.

By creating a new crime, this bill would impose a state-mandated local program.

(3)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YESNO   Local Program: YESNO  

The people of the State of California do enact as follows:


SECTION 1.

 Division 114 (commencing with Section 132000) is added to the Health and Safety Code, to read:

DIVISION 114. Prescription Drug Discount Prohibition

132000.
 Except as provided in Section 132004, a person who manufactures a prescription drug shall not offer in the state a discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses associated with his or her insurance coverage, including, but not limited to, a copayment, coinsurance, or deductible, for a prescription drug if a lower cost generic drug is covered under the individual’s health plan on a lower cost-sharing tier that is designated to be therapeutically equivalent as indicated by the United States Food and Drug Administration’s “Approved Drug and Products with Therapeutic Equivalence Evaluations.”

132002.
 Except as provided in Section 132004, a person who manufactures a prescription drug shall not offer in the state a discount, repayment, product voucher, or other reduction in the individual’s out-of-pocket expenses associated with his or her insurance coverage, including, but not limited to, a copayment, coinsurance, or deductible, for a prescription drug if the active ingredients of the drug are regulated by the federal Food and Drug Administration, are available without prescription at a lower cost, and are not otherwise contraindicated for treatment of the condition for which the prescription drug is approved.

132004.
 The prohibitions in Sections 132000 and 132002 shall not apply to any of the following:
(a) A discount, repayment, product voucher, or other payment to a patient or another person on the patient’s behalf for a prescription drug required under a United States Food and Drug Administration Risk Evaluation and Mitigation Strategy for the purpose of monitoring or facilitating the use of that prescription drug in a manner consistent with the approved labeling of the prescription drug.
(b) A single-tablet drug regimen for treatment or prevention of human immunodeficiency virus (HIV) or acquired immune deficiency syndrome (AIDS) that is as effective as a multitablet regimen, unless, consistent with clinical guidelines and peer-reviewed scientific and medical literature, the multitablet regimen is clinically equally effective or more effective and is more likely to result in adherence to the drug regimen.
(c) The individual has completed any applicable step therapy or prior authorization requirements for the branded prescription drug as mandated by the individual’s health plan.
(d) A discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses is not associated with his or her insurance coverage.
(e) Rebates received by a state agency.

132006.
 This division does not prohibit an entity, including an entity that manufactures prescription drugs, from offering pharmaceutical products free of any cost to both patients and insurers.

132008.
 (a) This division shall not be deemed to affect a pharmacist’s ability to substitute a prescription drug pursuant to Section 4073 of the Business and Professions Code.
(b) (1) This division shall not prohibit or limit assistance to a patient provided by an independent charity patient assistance program.
(2) For purposes of this section, “independent charity patient assistance program” means a program that meets all of the following requirements:
(A) The program does not allow a pharmaceutical manufacturer or an affiliate of the manufacturer, including, but not limited to, an employee, agent, officer, shareholder, contractor, wholesaler, distributor, or pharmacy benefits manager, to exert any direct or indirect influence or control over the charity or subsidy program.
(B) Assistance is awarded in a truly independent manner that severs any link between a pharmaceutical manufacturer’s funding and the beneficiary.
(C) Assistance is awarded without regard to the pharmaceutical manufacturer’s interest and without regard to the beneficiary’s choice of product, provider, practitioner, supplier, or insurance plan.
(D) Assistance is awarded based upon a reasonable, verifiable, and uniform measure of financial need that is applied in a consistent manner.
(E) The pharmaceutical manufacturer does not solicit or receive data from the program that would facilitate the manufacturer in correlating the amount or frequency of its donations with the number of subsidized prescriptions for its products.

132010.

(a)A violation of this division shall be considered a violation of Section 650 of the Business and Professions Code, and each separate violation shall be subject to the punishment set forth in subdivision (h) of Section 650 of the Business and Professions Code.

(b)A violation of this division shall be enforced only upon receipt of a complaint that alleges that violation.

SEC. 2.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.