Californians deserve transparency in prescription pricing

Californians now pay more for their prescription drugs than they do for their doctors. The state spent a whopping $4 billion on drugs in 2015, and pharmaceutical companies are pushing another 12 percent increase in 2017.

The skyrocketing costs are unsustainable. The Legislature has to pass state Sen. Ed Hernandez’ SB 17 and force drug makers to provide information about how they price their products.

The bill passed the Senate in May and faces a key vote on the Assembly floor Monday. The powerful Big Pharma lobbying arm is working overtime to kill the legislation, as it did in 2016: If California passes the bill, it will provide momentum for other states, and possibly the federal government, to pass similar legislation.

A close vote is expected. Hernandez has used the past year to attract bipartisan support for his common-sense approach. Billionaire Tom Steyer is providing financial support and both labor unions and business groups have jumped on board, an impressive coalition.

Drug makers argue that the bill is a first step toward price controls that will decimate their research and development work. Pharmaceutical companies certainly deserve a reasonable return on their substantial investments in research and development.

But if they reveal a pricing strategy that seems justified, it could have the opposite effect, relieving the pressure for price controls. If the figures confirm that companies now spend more on marketing than they do on actual R& D, well, that could be a problem for them. Much as we are amused by those ads with the twin tubs on a cliff.

Hernandez’ bill would require prescription drug companies to notify state health programs and private insurance companies 60 days before they raise the price of a prescription drug. The measure also re-

SB 17 bill would require prescription drug companies to notify state health programs and private insurance companies 60 days before they raise the price of a prescription drug.

quires that health plans and insurers notify state regulators of pricing information for the most costly drugs.

“We aren’t limiting how much they can charge,” Hernandez said. “What I’ve learned in the past two years working on this bill is the drug companies don’t tie price increases to value, effectiveness, research costs or even changes in manufacturing costs of a drug. We just want to give consumers a greater understanding of the costs.”

The impetus for the bill was the outrageous price gouging by former Turing Pharmaceuticals CEO Martin Shkreli. He jacked up the price of the EpiPen, the life-and- death drug that saves people allergic to bee stings, from $100 for a two-pack in 2009 to $600 in 2016.

Consumers with life-threatening allergies have no choice but to pay whatever drug makers charge for their products.

Hernandez’ SB 17 will give Californians the information they deserve to understand whether the price they are paying for their prescription drugs is reasonable. Given the amount of money pharmaceutical companies collect in California, transparency is a fair requirement.