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Bills will help protect California consumers from rising out-of-pocket prescription drug costs

October 3, 2018

Sacramento, CA (October 3, 2018) – The California Chronic Care Coalition (CCCC), a unique alliance of healthcare organizations collaborating to improve the health of Californians with chronic conditions, today applauded Governor Jerry Brown for signing Assembly Bill 2863 (AB 2863), and Assembly Bill 315 (AB 315) and thanked Assemblymember Adrin Nazarian (D-Van Nuys) and Assemblymember Jim Wood, (D-Healdsburg) for championing these bills, which will help ensure that Californians do not overpay for their prescription drugs because of harmful PBM practices.

“The California Chronic Care Coalition applauds Governor Jerry Brown for standing with millions of Californians living with chronic conditions who are unknowingly overpaying for their treatments due to common practices by the largely unregulated pharmacy benefit manager industry,” said California Chronic Care Coalition CEO Liz Helms.

“PBMs are third-party negotiators contracted by insurers to manage prescription drug benefits, set prices with manufacturers and decide rebates with pharmacies,” states Assemblymember Jim Wood, legislative author of AB 315. “Due to the lack of transparency and government oversight, PBMs have increased consumer costs and profiting from the overpayment difference. AB 315 will bring transparency and oversight to PBM practices.”

“Californians are struggling to afford the cost of their prescriptions and patients, not corporations, should benefit from the savings negotiated by PBMs,” said Assemblymember Adrin Nazarian, legislative author of AB 2863. “AB 2863 will help curtail the problem of high prescription costs by ensuring that consumers are made aware of and pay the lowest available price for their medications.”

According to a recent University of Southern California study, customers overpay for their prescriptions 23 percent of the time – an average of $7.69 on each transaction. During the six month period examined by the study, the total overpayment reached $135 million nationwide.

AB 315, authored by Assemblymember Jim Wood (D-Healdsburg) , will implement much needed transparency and oversight to the interactions PBMs have with health plans, insurers, manufacturers and pharmacies and would eliminate so-called PBM ‘gag clauses,’ which prevent pharmacists from telling patients when it would be cheaper to pay for their medication out-of-pocket, rather than going through insurance.

Media Contact:
Lucila Garcia
(323) 646-2150