Gov. Brown To Sign Or Veto Controversial Drug Price Law : Shots - Health News A bill passed by the California Legislature requires drugmakers to give 60 days' notice before raising a drug's price by 16 percent or more over two years, and to justify the price increase.
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California Bill Would Compel Drugmakers To Justify Price Hikes

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California Bill Would Compel Drugmakers To Justify Price Hikes

California Bill Would Compel Drugmakers To Justify Price Hikes

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ROBERT SIEGEL, HOST:

California may be about to deal the drug lobby a rare defeat. The legislature has sent a bill to the governor that would compel pharmaceutical companies to justify big price hikes on drugs. This comes after the industry spent a lot of money campaigning against the bill. From member station KQED in San Francisco, April Dembosky reports.

APRIL DEMBOSKY, BYLINE: This is the second life for this drug price legislation. Last year, the same bill crashed and burned. It got gutted so badly, the authors pulled it. A week later, this happened.

(SOUNDBITE OF NEWS MONTAGE)

UNIDENTIFIED REPORTER #1: Firestorm of controversy over the price of lifesaving EpiPens...

UNIDENTIFIED REPORTER #2: Cost of those EpiPens has risen nearly 500 percent...

UNIDENTIFIED REPORTER #3: The chorus of voices expressing outrage at the drug company.

DEMBOSKY: Momentum grew. Federal lawmakers called for hearings. Several proposed bills to rein in drug costs. Then, this happened.

(SOUNDBITE OF NEWS MONTAGE)

UNIDENTIFIED REPORTER #4: Donald J. Trump.

UNIDENTIFIED REPORTER #5: Donald Trump.

UNIDENTIFIED REPORTER #6: Donald Trump elected president of the United States.

UNIDENTIFIED REPORTER #7: Let the health care battle began.

PRESIDENT DONALD TRUMP: Repeal and replace.

Repeal and replace Obamacare.

The drug industry because they're getting away with murder.

DEMBOSKY: The time was right for California state Senator Ed Hernandez to reintroduce his bill. It requires drug companies to give notice anytime they plan to raise the price on a drug by 16 percent over two years. And they'll have to explain why the increases are necessary. Hernandez says political support grew quickly this time around and from more than just the usual suspects.

ED HERNANDEZ: It wasn't just labor. It was consumer groups. It was health plans. It was the chambers of commerce. It was the hospital association.

DEMBOSKY: Hernandez is optimistic the governor will sign it into law, but he knows nothing's certain. Just when he thought he'd secured all the votes he needed, at the last minute, they started slipping away.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED WOMAN: All those vote who desire to vote. All those vote who desire to vote.

DEMBOSKY: The bill needed 41 votes to pass the state assembly, but it started to stall around 35. Hernandez says he had plenty of colleagues willing to be the 42nd vote. But with drug lobbyists swarming the Capitol, no one wanted to be the deciding vote.

HERNANDEZ: If the bill fails and you're stuck out there, then, you know, you're - you're the person that's attacking that industry.

DEMBOSKY: But once the threshold was passed, everyone glommed on. In the end, the bill passed with 66 votes. All the Democrats and half the Republicans in the state assembly voted for it much to the dismay of drug companies. Priscilla Vanderveer from the industry's trade group says the regulations could stifle innovation.

PRISCILLA VANDERVEER: That takes up a lot of resources and will take up a lot of time. And that could mean pulling resources from research and development and having to put it into the reporting structure.

DEMBOSKY: The drug lobby spent close to $17 million trying to defeat drug bills in California in the last two and a half years and focused especially hard on this one. Experts say the drug industry just doesn't want a large influential state like California forcing them to share their data with the rest of the country. Gerard Anderson is a public health professor at Johns Hopkins.

GERARD ANDERSON: Other states get to essentially piggyback on the good efforts of California. And hopefully, because they might have difficulty justifying the price increases, everybody's prices around the country will be lower.

DEMBOSKY: But Anderson warns that drugmakers are already planning ways to work around the bill. They've filed lawsuits to try to slow or weaken similar laws in other states. California's governor must decide to sign or veto the bill by October 15. For NPR News, I'm April Dembosky in San Francisco.

SIEGEL: And that story is part of a reporting partnership of NPR, KQED and Kaiser Health News.

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