HLS 18RS-159 ORIGINAL
2018 Regular Session
HOUSE BILL NO. 710
BY REPRESENTATIVE HOLLIS
DRUGS/PRESCRIPTION: Prohibits a manufacturer or wholesale distributor from engaging
in unrestrained price increases in the sale of an essential off-patent or generic drug
1 AN ACT
2To amend and reenact R.S. 44:4.1(B)(26) and to enact Part IX of Chapter 12 of Title 40 of
3 the Louisiana Revised Statutes of 1950, to be comprised of R.S. 40:2255.21 through
4 2255.23, relative to prescription drug prices; to provide for definitions; to prohibit
5 unrestrained price increases in the sale of certain drugs; to provide for an exception;
6 to provide for the powers and duties of the attorney general; to provide for remedies
7 for violations; to establish a civil penalty; to provide for confidentiality of certain
8 information; to provide for a public records exception; to provide for an effective
9 date; and to provide for related matters.
10Be it enacted by the Legislature of Louisiana:
11 Section 1. Part IX of Chapter 12 of Title 40 of the Louisiana Revised Statutes of
121950, comprised of R.S. 40:2255.21 through 2255.23, is hereby enacted to read as follows:
13 PART IX. PROHIBITION AGAINST UNRESTRAINED PRICE INCREASES
14 FOR ESSENTIAL OFF-PATENT OR GENERIC DRUGS
15 §2255.21. Definitions
16 As used in this Part, the following words have the following meanings unless
17 the context indicates otherwise:
18 (1)(a) "Essential off-patent or generic drug" means any prescription drug that
19 meets all of the following criteria:
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1 (i) All exclusive marketing rights for the drug, if any, granted pursuant to the
2 federal Food, Drug, and Cosmetic Act, Section 351 of the federal Public Health
3 Service Act, or federal patent law have expired.
4 (ii) The drug appears on the model list of essential medicines most recently
5 adopted by the World Health Organization or has been designated by the secretary
6 as an essential medicine due to its efficacy in treating a life-threatening health
7 condition or a chronic health condition that substantially impairs an individual’s
8 ability to engage in activities of daily living.
9 (iii) The drug is actively manufactured and marketed for sale in the United
10 States by three or fewer manufacturers.
11 (iv) The drug is made available for sale in Louisiana.
12 (b) "Essential off-patent or generic drug" includes any drug-device
13 combination product used for the delivery of a drug for which all exclusive
14 marketing rights, if any, granted under the federal Food, Drug, and Cosmetic Act,
15 Section 351 of the federal Public Health Service Act, or federal patent law have
16 expired.
17 (2) "Medical assistance program" means the medical assistance program
18 provided for in Title XIX of the Social Security Act as administered by the Louisiana
19 Department of Health.
20 (3) "Secretary" means the secretary of the Louisiana Department of Health.
21 (4) "Unrestrained price increases" means increases in the price of a
22 prescription drug that are excessive and not justified by the cost of producing the
23 drug or the cost of appropriate expansion of access to the drug to promote public
24 health and results in consumers for whom the drug has been prescribed having no
25 meaningful choice about whether to purchase the drug at an excessive price because
26 of the importance of the drug to their health and insufficient competition in the
27 market for the drug.
28 (5) "Wholesale acquisition cost" has the meaning stated in 42 U.S.C. 1395w-
29 3a.
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HB NO. 710
1 §2255.22. Off-patent or generic drug; unrestrained price increases prohibited;
2 exception
3 A. A manufacturer or wholesale distributor of an essential off-patent or
4 generic drug is prohibited from engaging in unrestrained price increases in the sale
5 of the drug.
6 B. It is not a violation of Subsection A of this Section for a wholesale
7 distributor to increase the price of an essential off-patent or generic drug if the price
8 increase is directly attributable to additional costs for the drug imposed on the
9 wholesale distributor by the manufacturer of the drug.
10 §2255.23. Attorney general; notice of price increase; powers and duties; remedies
11 for violations; confidential information
12 A. The secretary may notify the attorney general of any increase in the price
13 of an essential off-patent or generic drug if the price increase, by itself or in
14 combination with other price increases, would result in an increase of fifty percent
15 or more in the wholesale acquisition cost of the drug within the preceding one-year
16 period or would result in an increase of fifty percent or more in the price paid by the
17 medical assistance program for the drug within the preceding one-year period and
18 at least one of the following criteria is met:
19 (1) A thirty-day supply of the maximum recommended dosage of the drug
20 for any indication, according to the label for the drug approved under the federal
21 Food, Drug, and Cosmetic Act, would cost more than eighty dollars at the drug’s
22 wholesale acquisition cost.
23 (2) A full course of treatment with the drug, according to the label for the
24 drug approved under the federal Food, Drug, and Cosmetic Act, would cost more
25 than eighty dollars at the drug’s wholesale acquisition cost.
26 (3) If the drug is made available to consumers only in quantities that do not
27 correspond to a thirty-day supply, a full course of treatment, or a single dose, it
28 would cost more than eighty dollars at the drug’s wholesale acquisition cost to obtain
29 a thirty-day supply or a full course of treatment.
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1 B. The attorney general's receipt of notification pursuant to Subsection A of
2 this Section shall constitute notice of a potential violation of R.S. 51:1405.
3 C. Any civil investigative demand issued by the attorney general to a
4 manufacturer shall include a request for all of the following information:
5 (1)(a) An itemization of the components of the cost of producing the drug.
6 (b) An identification of the circumstances and timing of any increase in
7 materials or manufacturing costs that caused any increase in the price of the essential
8 generic drug within the one-year period preceding the date of the price increase.
9 (2)(a) An identification of the circumstances and timing of any expenditures
10 made by the manufacturer to expand access to the drug.
11 (b) An explanation of any improvement in public health associated with
12 those expenditures.
13 (3) Any other information that the manufacturer believes to be relevant to
14 a determination of whether a violation of R.S. 51:1405 has occurred.
15 D. In addition to the remedies provided for in the Unfair Trade Practices and
16 Consumer Protection Law, R.S. 51:1401 et seq., a court may do any of the following:
17 (1) Issue an order requiring a manufacturer that has engaged in unrestrained
18 price increases in the sale of an essential off-patent drug to make the drug available
19 to residents of Louisiana for a period of up to one-year at the price at which the drug
20 was made available to residents of Louisiana immediately prior to the manufacturer's
21 violation of R.S. 51:1405.
22 (2) Impose a civil penalty of up to ten thousand dollars for each violation of
23 R.S. 51:1405.
24 E. The attorney general shall not bring an action for a remedy pursuant to
25 this Section unless the attorney general has provided the manufacturer or wholesale
26 distributor an opportunity to meet with the attorney general to offer a justification for
27 the increase in the price of the essential off-patent or generic drug.
28 F. Any information provided by a manufacturer or a wholesale distributor
29 to the attorney general pursuant to this Section shall be considered confidential
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1 commercial information not subject to public disclosure pursuant to the Public
2 Records Law, R.S. 44:1 et seq., unless the confidentiality of the information is
3 waived by the manufacturer or wholesale distributor.
4 G. In any action brought by the attorney general pursuant to this Section, a
5 person who is alleged to have violated a provision of this Part shall not assert as a
6 defense that the person did not deal directly with a consumer residing in Louisiana.
7 Section 2. R.S. 44:4.1(B)(26) is hereby amended and reenacted to read as follows:
8 §4.1. Exceptions
9 * * *
10 B. The legislature further recognizes that there exist exceptions, exemptions,
11 and limitations to the laws pertaining to public records throughout the revised
12 statutes and codes of this state. Therefore, the following exceptions, exemptions, and
13 limitations are hereby continued in effect by incorporation into this Chapter by
14 citation:
15 * * *
16 (26) R.S. 40:3.1, 31.14, 31.27, 39.1, 41, 73, 95, 96, 526, 528, 1007, 1061.21,
17 1079.18, 1081.10, 1105.6, 1105.8, 1133.8, 1171.4, 1203.4, 1231.4, 1379.1.1(D),
18 1379.3, 2009.8, 2009.14, 2010.5, 2017.9, 2018, 2019, 2020, 2106, 2138, 2255.23,
19 2532, 2845.1
20 * * *
21 Section 3. This Act shall become effective upon signature by the governor or, if not
22signed by the governor, upon expiration of the time for bills to become law without signature
23by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
24vetoed by the governor and subsequently approved by the legislature, this Act shall become
25effective on the day following such approval.
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HB NO. 710
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 710 Original 2018 Regular Session Hollis
Abstract: Prohibits a manufacturer or wholesale distributor from engaging in unrestrained
price increases in the sale of an essential off-patent or generic drug.
Proposed law defines "essential off-patent or generic drug", "medical assistance program",
"secretary", "unrestrained price increases", and "wholesale acquisition cost".
Proposed law prohibits a manufacturer or wholesale distributor of an essential off-patent or
generic drug from engaging in unrestrained price increases in the sale of the drug.
Proposed law authorizes the secretary of the La. Dept. Of Health to notify the attorney
general of any increase in the price of an essential off-patent or generic drug if the price
increase, by itself or in combination with other price increases, would result in an increase
of 50% or more in the wholesale acquisition cost of the drug or the price paid by the medical
assistance program for the drug within the preceding one-year period and a 30-day supply
of the maximum recommended dosage of the drug for any indication or a full course of
treatment with the drug, according to the label for the drug approved under the federal Food,
Drug, and Cosmetic Act, would cost more than $80 at the drug's wholesale acquisition cost.
Proposed law provides that the attorney general's receipt of the notification shall constitute
notice of a potential violation of the Unfair Trade Practices and Consumer Protection Law.
Proposed law requires any civil investigative demand issued by the attorney general to a
manufacturer to include a request for all of the following information:
(1)An itemization of the components of the cost of producing the drug.
(2)An identification of the circumstances and timing of any increase in materials or
manufacturing costs that caused any increase in the price of the essential generic
drug within the one-year period preceding the date of the price increase.
(3)An identification of the circumstances and timing of any expenditures made by the
manufacturer to expand access to the drug.
(4)An explanation of any improvement in public health associated with those
expenditures.
(5)Any other information that the manufacturer believes to be relevant to a
determination of whether a violation has occurred.
Proposed law permits a court, in addition to any other remedy authorized by law, to issue an
order to do any combination of the following:
(1)Require a manufacturer that has engaged in unrestrained price increases in the sale
of an essential off-patent or generic drug to make the drug available to residents of
La. for a period of up to one year at the price at which the drug was made available
prior to the manufacturer's violation.
(2)Impose a civil penalty of up to $10,000 for each violation.
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HB NO. 710
Proposed law prohibits the attorney general from bringing an action for a remedy unless the
attorney general has provided the manufacturer or wholesale distributor an opportunity to
offer a justification for the increase in the price of the essential off-patent or generic drug.
Proposed law provides that any information provided by a manufacturer or a wholesale
distributor to the attorney general shall be considered confidential commercial information
not subject to public disclosure pursuant to the Public Records Law unless the confidentiality
of the information is waived by the manufacturer or wholesale distributor.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 44:4.1(B)(26); Adds R.S. 40:2255.21-2255.23)
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