Dive Brief:
- A Democratic state rep in San Francisco, Assemblymember David Chiu, has proposed legislation (AB 469) that would require full transparency regarding operational costs for any drug costing $10,000 or more.
- The bill would require companies to submit annual cost-reporting to the Office of State-wide Health Planning and Development.
- The impetus for the bill's introduction is the proliferation of high-price pharmaceuticals, most notably $1,000-per-pill Sovaldi (sofosbuvir).
Dive Insight:
Chiu has plenty of patient advocate support behind him for the bill. One vocal supporter, Bill Michael Weinstein, president of the AIDS Healthcare Foundation, has cited the tension between people choosing between medication and basic necessities while companies reap record profits.
The bill stipulates that a manufacturer that prices a drug at $10,000 per year or more must submit information on the following: R&D costs, R&D grants from any source, clinical trials and other regulatory costs, manufacturing costs, marketing and advertising costs, and acquisition costs—including patents and licensing, profit attributed to the drug, and the cost of assisting patients financially through special programs.
Pharmaceutical companies are likely to respond that such numbers may wind up painting a distorted picture of a drug's true costs, since the process of drug discovery can't always be neatly packaged into distinct, singular figures.