California Gov. Jerry Brown moved to shed light on escalating prescription drug prices on Monday, signing heavily lobbied legislation requiring insurers to break down and provide drug costs to the state.
Senate Bill 17, which drew millions in opposition spending from the powerful pharmaceutical industry, is designed to arm the state with data on the percentage of health insurance premiums and premium increases that can be attributed to prescription drug costs.
Brown, in a signing ceremony in his office, said Californians have a right to know why their medical costs are “out of control, especially when pharmaceutical profits are soaring.”
“That’s the takeaway message,” Brown said, lamenting the growing inequities in California and throughout the country.
“The rich are getting richer. The powerful are getting more powerful, and growing number of people are getting more desperate, more alienated,” he said. “This is just another example where the powerful get more power; and take more. What I have to say to the pharmaceutical companies (is) ‘Yes, you are part of this great engine of creativity and innovation and productivity.’ That’s the good. But the bad is given this technology, given the global market, fewer and fewer people at the top are getting more and more.”
Sen. Ed Hernandez, D-Azusa, introduced the bill for a second time following last fall’s defeat of Proposition 61, which would have prevented the state from spending more on a prescription than the lowest price paid by the U.S. Department of Veterans Affairs.
That ill-fated measure by Los Angeles-based AIDS Healthcare Foundation, and backed by Sen. Bernie Sanders and the nurses union, was doing well in early polls, but ultimately lost amid more than $109 million in opposition spending.
Priscilla VanderVeer, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, said it was “disappointing” that Brown signed “a bill that is based on misleading rhetoric instead of what’s in the best interest of patients.”
“There is no evidence that SB 17 will lower drug costs for patients because it does not shed light on the large rebates and discounts insurance companies and pharmacy benefit managers are receiving that are not always being passed on to patients,” she said. “Nothing in SB 17 will help patients get the benefits of the savings that insurance companies and PBMs are getting.”
She added: It’s time to move beyond creating new, costly bureaucratic programs that don’t make a dent in patients’ costs for medicines.”
SB 17 was viewed as a test of drug company influence at the state Capitol, yet it drew on a larger, more diverse list of supporters – from Health Access California, to the California Labor Federation and business groups to key health care providers like Kaiser Permanente.
On Monday, Hernandez praised the coalition that helped him push the bill, drawing sustained applause from those gathered. He predicted that the bill will be “one of the most comprehensive bills in the country.
“I want to challenge our federal elected officials, our U.S. senators, to do the same thing at the national level,” Hernandez said. “So that we can make sure that every single person in this country not only has access to health care, but that they can afford their healthcare premiums ... so that they can make a living, get higher wages. We have to make this a priority.”
A candidate for lieutenant governor, Hernandez is using the populist measure to help with his 2018 campaign, despite having closely aligned with drug companies throughout his earlier years in office.
Hernandez has been the Legislature’s top recipient of drug-maker money since 2011, far ahead of the second-highest recipient, The Bee reported on Friday. He transferred more than $70,000 of the $207,000 he raised from drug-makers and their interests into his committee for lieutenant governor.
His opponents, fellow Democrats Eleni Kounalakis, former U.S. ambassador to Hungary, and Asif Mahmood, a Los Angeles physician, took note of the story.
Mahmood’s campaign released a statement calling on Hernandez to return the transferred contributions, and asked other candidates in the race to join him in pledging to not accept money from the pharmaceutical industry.