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AB-1923 State government: contracts: public records.(2013-2014)

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CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 1923

Introduced by Assembly Member Daly

February 19, 2014

An act to amend Section 14977.1 of the Government Code, relating to public records.


LEGISLATIVE COUNSEL'S DIGEST


AB 1923, as introduced, Daly. State government: contracts: public records.
Existing law, the California Public Records Act, requires state and local agencies to make public records available upon receipt of a request that reasonably describes an identifiable record not otherwise exempt from disclosure, upon the payment of fees to cover costs.
Existing law authorizes the Department of General Services to enter into exclusive or nonexclusive contracts on a bid or negotiated basis with the manufacturers and suppliers of single source or multisource drugs, as specified. Existing law authorizes those contracts to include price discounts, rebates, refunds, or other strategies aimed at managing escalating prescription drug prices.
This bill would exempt the financial terms of a contract executed pursuant to this authorization from disclosure under the California Public Records Act.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 14977.1 of the Government Code is amended to read:

14977.1.
 (a) Notwithstanding any other provision of law, the Department of General Services may enter into exclusive or nonexclusive contracts on a bid or negotiated basis with manufacturers and suppliers of single source or multisource drugs. The department may obtain from those manufacturers and suppliers, discounts, rebates, or refunds based on quantities purchased insofar as permissible under federal law. Contracts entered into pursuant to this chapter may include price discounts, rebates, refunds, or other strategies aimed at managing escalating prescription drug prices.
(b) Contracts under this chapter shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code.
(c) The financial terms of a contract executed pursuant to this section shall be confidential and shall be exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1).

SEC. 2.

 The Legislature finds and declares that Section 1 of this act, which amends Section 14977.1 of the Government Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
It is in the state’s financial interest to keep pharmaceutical pricing information confidential when there is a contract between the Department of General Services and a pharmaceutical company. As is the case with the existing parallel provision in the Medi-Cal drug program, companies are more aggressive in their pricing, given the size of the California market, when it is clear that neither a competitor nor other payer has access to this information. Other states and companies have sought to retrieve this sensitive pricing information, and a statutory confidentiality protection will ensure that drug companies remain aggressive in their negotiations with the State of California. Additionally, the state will realize further savings when it no longer has to process, and ultimately reject, requests for this information.