Essential drugs; price increases; limits.
If passed, SB1402 would empower the state medical assistance program to notify the attorney general of any significant price increases in these essential drugs—specifically, increases of at least 50% in either the wholesale acquisition cost or the price paid by the state within a year. This aims to provide an avenue for regulatory oversight and addresses the affordability of drugs crucial for public health.
SB1402 seeks to address the issue of price gouging for essential off-patent and generic drugs within Arizona. The bill intends to regulate the pricing of these drugs by defining essential drugs as those whose patent or marketing rights have expired and that are manufactured for sale by three or fewer companies. This legislation aims to prevent unconscionable price increases that could adversely affect patients who rely on these medications for critical health conditions.
One notable contention surrounding SB1402 is the definition of 'price gouging.' The bill prohibits excessive price increases not justified by production or distribution costs. It also mandates that manufacturers disclose information regarding their pricing strategies when prompted by the attorney general, an aspect that raises concerns about the balance between consumer protection and regulatory burden on pharmaceutical businesses.
The bill allows for civil penalties up to $10,000 per violation for manufacturers engaging in prohibited price gouging. Moreover, it establishes a process through which the attorney general can compel drug manufacturers to provide detailed cost breakdowns and justifications for price increases, thereby enhancing accountability in the pharmaceutical market.