Senate Co-Sponsorship Memoranda

In the near future, we intend to introduce legislation that will require the Pennsylvania Insurance Department to collect and make publicly available data pertaining to the cost of each drug produced by a pharmaceutical company.

The bill seeks to address both affordability and access to critical medications and the challenge patients, providers, businesses, government health programs and insurers face with the rising costs of prescription drugs, especially the recent development of extremely expensive but valuable drugs. These drugs are wonderful advancements in improving health care and they may even reduce aggregate costs; at the same time, there is little information available to the consumer as to why they cost so much and almost no ability to negotiate price.

Pharmaceutical manufacturers will be required to annually report to the Department the total cost of production for each drug they produce including costs associated with:

• research and development;

• clinical trials and regulatory costs;

• materials, manufacturing and administrative expenses;

• costs paid by another entity including governmental grants;

• other costs to acquire the drug, including the purchase of patents, licensing or acquisition costs; and

• aggregate amount of manufacturer rebates.

The information required to be reported under this bill shall be made publicly available on the Insurance Departments website, except for identities of individual payers receiving rebates.

Lastly, the bill also prohibits contracts between pharmacies and pharmacy benefit managers or insurers from including provisions prohibiting pharmacists from disclosing information to a customer that would reduce the customer’s out-of-pocket costs.

Please join us in co-sponsoring this important bill to provide greater transparency in costs related to the pricing of prescription pharmaceuticals.