Assembly Bill 1170 mandates that manufacturers of brand-name and generic drugs report specific cost-related information to the Department of Health Services (DHS) and the Office of the Commissioner of Insurance (OCI). Manufacturers must notify these agencies if they are increasing the wholesale acquisition cost of a drug by more than 25% over a 24-month period or introducing a new drug with a high annual cost. Additionally, they are required to provide justification for these price changes, including cost-effectiveness analyses and comparisons to similar drugs. The bill also requires annual reporting of price concessions given to pharmacy benefit managers and details about manufacturer-sponsored assistance programs.

To support the implementation of these requirements, the bill creates a new appropriation for DHS and authorizes the addition of two full-time equivalent positions to manage the reporting process. Manufacturers who fail to comply with the reporting requirements may face penalties of up to $10,000 per day for late submissions. Furthermore, DHS is tasked with publishing the justification information and analyzing trends in drug pricing, which will be made available to the public through their website.