SB 874

This bill prohibits a manufacturer or wholesale distributor from selling or

offering to sell an essential off-patent or generic drug at a price that results in price

gouging.

Under the bill, price gouging means increasing the price of an essential

off-patent or generic drug if both of these conditions apply: 1) the price increase is

excessive and not justified by the cost of producing the drug or the cost of

appropriately expanding access to the drug; and 2) the price increase results in a

consumer who is prescribed the drug having no meaningful choice about whether to

purchase the drug because the drug is important to the consumer's health or because

insufficient competition exists in the market for the drug. The bill applies to

off-patent or generic drugs, which are defined as prescription drugs made available

for sale in this state that are manufactured by three or fewer manufacturers in the

United States, and for which all exclusive marketing rights granted under federal

law have expired. For purposes of the bill, an off-patent or generic drug is essential

if the drug is listed on the list of essential medicines adopted by the World Health

Organization or if the Department of Health Services designates the drug as

essential due to its efficacy in treating a life-threatening health condition or chronic

health condition.

Under the bill, the attorney general may request the manufacturer or

wholesale distributor of an essential off-patent or generic drug to submit a

statement within 45 days that does all of the following: 1) itemizes the components

of the cost of producing the drug; 2) identifies the circumstances and timing of any

increase in materials or manufacturing costs that cause a price increase; 3) identifies

the circumstances and timing of any expenditures made to expand access to the drug;

4) explains improvements in public health associated with any expenditures made

to expand access to the drug; and 5) provides any other information that the

manufacturer believes is relevant to whether it violated the prohibition on price

gouging. The bill also authorizes the attorney general to require a manufacturer or

wholesale distributor of a prescription drug to produce records or other documents

that may be relevant to investigating price gouging of an essential off-patent or

generic drug.

The bill also authorizes the attorney general to petition a circuit court for

various orders, including compelling a manufacturer or wholesale distributor to

provide a statement or other records required under the bill, enjoining price gouging,

restoring money to a consumer, requiring a manufacturer to make drugs available

to state public assistance and the group health insurance programs at their previous

prices, and a civil forfeiture of up to $10,000 for each instance of price gouging. The

attorney general must generally provide a manufacturer or wholesale distributor

with an opportunity to meet to offer a justification for an increase in the price of an

essential off-patent or generic drug before filing a petition authorized by the bill.