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Big Pharma companies sue CalPERS, state prisons to block disclosure of drug prices

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CalPERS, California Public Employees Retirement System, aims to build retirement and health security for state workers. Here's a quick look at the retirement system.
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CalPERS, California Public Employees Retirement System, aims to build retirement and health security for state workers. Here's a quick look at the retirement system.

CalPERS could be on the hook for attorneys’ fees after a Los Angeles County judge ruled that pharmaceutical companies don’t have to publicly disclose plans to raise drug prices, according to information CalPERS’ legal office is presenting to its Board of Administration this week.

Three drugmakers’ lawsuits tested part of a landmark drug pricing bill in California that requires pharmaceutical companies to notify the state before the companies raise drug prices. The 2017 law aims to help the state find alternatives to paying surprise price hikes that in some cases have leapt to 2,000 percent or more in recent years.

After companies filed the notices last fall, news organization Reuters requested the filings from California Public Employees’ Retirement System and California Correctional Health Care Services under the state’s public records law.

CalPERS, the state’s largest pension fund, and CCHCS, which manages health care for state prisons, told the drugmakers they planned to release the records. Amgen, Ipsen Biopharmaceuticals and GlaxoSmithKline sued the agencies to keep the information private.

The companies said their pricing plans were trade secrets, and that revealing them could disrupt drug supplies by spurring some drug purchasers to buy lots of the drugs before the increases took effect, according to court documents.

Amgen filed the first of the lawsuits, against California Correctional Health Care Services, in Los Angeles County in early December. On Feb. 1, the judge in that case sided with Amgen, ruling CCHCS could not release the drug pricing information before the increases took effect.

Ipsen filed at the end of December in San Francisco, naming both CCHCS and CalPERS as defendants. The parties in the Ipsen suit agreed to abide by the judge’s decision in the Los Angeles County case.

GlaxoSmithKline filed suit in Sacramento County, naming CCHCS and CalPERS as defendants. Filings in that case do not indicate whether the parties will follow the Los Angeles judge’s decision. CalPERS’ legal staff informed the board Thursday in a monthly update that it could face legal fees in the Ipsen and GlaxoSmithKline cases.

CalPERS, the largest public employer purchaser of health benefits in California covering about 1.5 million people, did not immediately respond to an email requesting more information. CCHCS declined comment.

Reuters obtained price increase information for drugmakers Novartis and Bayer, including them in a Dec. 19 story on drug pricing.

The pharmaceutical industry is still arguing California’s 2017 law, which resulted from Senate Bill 17, is unconstitutional. A district court judge dismissed the Pharmaceutical Research and Manufacturers of America’s challenge to the law last year, and the organization filed an amended complaint in September.

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