BILL NUMBER: S396
SPONSOR: MYRIE
 
TITLE OF BILL:
An act to amend the insurance law, in relation to investigating critical
prescription drug pricing
 
PURPOSE:
To protect vulnerable populations from price increases for critical
prescription drugs.
 
SUMMARY OF PROVISIONS:
Section 1 amends the insurance law by adding a new section 346 which
permits the superintendent to investigate any increase in a "critical
prescription drug" as defined in the amendment that exceeds the consumer
list price index during any preceding twelve-month period. The super-
intendent may require the submission of a statement in writing justify-
ing the price increase and may also compel the attendance of witnesses
to be examined under oath as well as require the production of any books
or papers which the superintendent deems relevant to the investigation.
A person's refusal to cooperate with the investigation will subject that
person to civil and criminal penalties. This section also provides for
civil penalties if, after investigation, the superintendent determines
after notice and a hearing, that the increase in the price of the crit-
ical prescription drug was unjustified.
Section 2 provides the effective date.
 
JUSTIFICATION:
Anecdotal reports of significant price increases for prescription drugs
are supported by the following data: Overall spending on prescription
drugs has risen tremendously since 1960. The cost of the same drugs can
differ by thousands depending on where in the country they are being
purchased. The price of insulin nearly doubled between 2012 and 2016. In
the first half of 2019, drug prices rose an average of 10.5% or 5 times
the rate of inflation.
From 2012 to 2017, brand name drugs rose on an average of 9.5 percent
per year, leading researchers to conclude that drug prices are on pace
to double every 7-8 years. (The drugs in this study included treatments
for diabetes, smoking cessation, depression, cholesterol, pain, meno-
pause, and erectile dysfunction.) In a study of 49 common top-selling
brand-name drugs, 78% of the drugs that have been available since 2012
have seen an increase in insurer and out-of-pocket costs by more than
50%, and 44% have more than doubled in price.
Nearly one in four Americans struggle to pay for their prescription drug
prices and more than four in ten Americans in poor health struggle to
afford their drugs. The poor and particularly the elderly are especially
vulnerable to price increases. The inability to access reasonably priced
drugs can be life-threatening. It is not unfair to require companies
that manufacture and distribute critical prescription drugs to justify
price increases that exceed the cost of living index. It is also not
unfair to punish companies that engage in such practices that threaten
the very lives of many Americans.
 
LEGISLATIVE HISTORY:
S2387 of 2023-24: Referred to Insurance.
S320 of 2021-22: Referred to Insurance.
S7739 of 2019-20: Referred to Insurance.
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.