Editorial: California needs prescription drug transparency | The Mercury News

Drug makers argue that the bill is a first step toward price controls that will decimate their research and development work. Pharmaceutical companies certainly deserve a reasonable return on their substantial investments in research and development.

But if they reveal a pricing strategy that seems justified, it could have the opposite effect, relieving the pressure for price controls. If the figures confirm that   companies now spend more on marketing than they do on actual R & D, well, that could be a problem for them. Much as we are amused by those ads with the twin tubs on a cliff.

Hernandez’ bill would require prescription drug companies to notify state health programs and private insurance companies 60 days before they raise the price of a prescription drug.The measure also requires that health plans and insurers notify state regulators of pricing information for the most costly drugs.

“We aren’t limiting how much they can charge,” said Hernandez. “What I’ve learned in the past two years working on this bill is the drug companies don’t tie price increases to value, effectiveness, research costs or even changes in manufacturing costs of a drug. We just want to give consumers a greater understanding of the costs.”

The impetus for the bill was the outrageous price gouging by former The firm selling EpiPen, the life-and-death drug that saves people allergic to bee stings, from $100 for a two-pack in 2009 to $600 in 2016.

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Editorial: California needs prescription drug transparency.