PRINTER'S NO. 4252
No. 2819 Session of 2002
INTRODUCED BY GANNON, BLAUM, BISHOP, CASORIO, CAWLEY, CORRIGAN,
DeLUCA, DIVEN, FRANKEL, HARHAI, HENNESSEY, HERMAN, HERSHEY,
HORSEY, JOSEPHS, LESCOVITZ, MACKERETH, McNAUGHTON, MELIO,
NAILOR, PETRARCA, SANTONI, SATHER, SHANER, B. SMITH, STABACK,
E. Z. TAYLOR, TIGUE, TRELLO, WALKO, YOUNGBLOOD AND YUDICHAK,
AUGUST 20, 2002
REFERRED TO COMMITTEE ON JUDICIARY, AUGUST 20, 2002
AN ACT
1 Amending Title 18 (Crimes and Offenses) of the Pennsylvania
2 Consolidated Statutes, prohibiting pharmaceutical price
3 gouging and profiteering; and imposing a penalty.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Title 18 of the Pennsylvania Consolidated
7 Statutes is amended by adding a section to read:
8 § 7331. Pharmaceutical price gouging and profiteering
9 prohibited.
10 (a) Offense defined.--It shall be unlawful for any
11 manufacturer, distributor, labeler or direct seller of
12 pharmaceutical products, either directly or indirectly, to
13 intentionally, knowingly or recklessly discriminate in price
14 between different public or private purchasers of pharmaceutical
15 products of like grade and quality, whether said purchaser is
16 within or without this Commonwealth, where such pharmaceutical
1 products are sold for use, consumption or resale in this
2 Commonwealth and where the effect of such discrimination may be
3 substantially to lessen competition or tend to create a
4 monopoly, or to injure, destroy or prevent competition with any
5 person who either grants or knowingly receives the benefit of
6 such discrimination, or with customers of either of them.
7 (b) Grading.--A violation of this section constitutes a
8 felony of the second degree and upon conviction, a manufacturer,
9 distributor, labeler or direct seller shall, in addition to any
10 other penalty provided by law, including costs of investigation
11 and prosecution, be sentenced to pay a fine of not less than
12 $25,000 nor more than $100,000.
13 (c) Defenses.--The following shall constitute a defense to a
14 complaint charging a violation of this section and nothing in
15 this section shall prevent:
16 (1) Manufacturers, distributors, labelers or direct
17 sellers from selecting their own customers in bona fide
18 transactions.
19 (2) Price changes from time to time where in response to
20 changing conditions affecting the market for or the
21 maketability of the pharmaceutical product concerned,
22 including, but not limited to, actual or imminent
23 deterioration of perishable pharmaceutical products,
24 obsolescence of seasonal pharmaceutical products, distress
25 sales under court process, or sales in good faith in
26 discontinuance of business in the pharmaceutical products
27 concerned.
28 (d) Enforcement.--
29 (1) In addition to the authority conferred upon the
30 Attorney General under sections 205 and 206 of the act of
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1 October 15, 1980 (P.L.950, No.164), known as the Commonwealth
2 Attorneys Act, the Attorney General has the authority to
3 investigate and to institute criminal proceedings for a
4 violation of this section committed:
5 (i) anywhere in this Commonwealth;
6 (ii) in different counties; or
7 (iii) in this Commonwealth and another jurisdiction.
8 (2) Each district attorney has the authority to
9 investigate and to institute criminal proceedings for a
10 violation of this section.
11 (e) Jurisdiction.--No person charged with a violation of
12 this section shall have standing to challenge the authority of
13 the Attorney General under subsection (d)(1). If a challenge is
14 made in violation of this subsection, the challenge shall be
15 dismissed and no relief shall be available in the courts of this
16 Commonwealth to the person making the challenge.
17 (f) Civil action and damages.--In addition to criminal
18 prosecution for a violation of this section or any other Federal
19 or State law, the Commonwealth may bring a civil action for a
20 direct or indirect injury to any person, group of persons, the
21 Commonwealth or a political subdivision of the Commonwealth
22 caused by a violation of this section. If the Commonwealth
23 prevails, the defendant shall pay treble damages and the costs
24 of suit, including necessary and reasonable investigative costs,
25 reasonable expert fees and reasonable attorney fees. Punitive
26 damages may be awarded for a willful or repeated violation of
27 this section. Any damages awarded must be equitably distributed
28 by the Commonwealth to all injured parties after deductions of
29 the costs of distribution.
30 (g) Civil violation.--In addition to any other penalty
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1 imposed, each violation of this section is a civil violation for
2 which the Commonwealth may obtain, in addition to other
3 remedies, injunctive relief and a civil penalty in an amount not
4 to exceed $100,000, plus the costs of suit, including necessary
5 and reasonable investigative costs, reasonable expert fees and
6 reasonable attorney fees.
7 (h) Unfair trade practice.--A violation of this section
8 shall be deemed a violation of the act of December 17, 1968
9 (P.L.1224, No.387), known as the Unfair Trade Practices and
10 Consumer Protection Law.
11 (i) Definitions.--As used in this section, the following
12 words and phrases shall have the meanings given to them in this
13 subsection:
14 "Direct seller." Any person, partnership, corporation,
15 institution or entity engaged in the selling of pharmaceutical
16 products directly to consumers at five or more retail locations
17 in this Commonwealth.
18 "Distributor." A private entity under contract with the
19 original labeler or holder of the national drug code number to
20 manufacture, package or market the covered prescription drug.
21 "Labeler." An entity or person that receives pharmaceutical
22 products from a manufacturer or wholesaler and repackages those
23 drugs for later retail sale and that has a labeler code from the
24 Federal Food and Drug Administration under 21 CFR § 207.20
25 (relating to who must register and submit a drug list).
26 "Manufacturer." A manufacturer of pharmaceutical products,
27 including a subsidiary or affiliate of a manufacturer.
28 "Pharmaceutical product." Any drug requiring a prescription
29 in this Commonwealth, insulin, insulin syringes and insulin
30 needles.
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1 Section 2. This act shall take effect in 60 days.
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