HB3957 EngrossedLRB103 29676 CPF 56079 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Pharmaceutical and Health Affordability: Restrictions on
6Manufacturers' Amoral Behavior through Reasonable Oversight
7Act.
 
8    Section 2. Legislative Findings.
9    (a) The General Assembly finds that public reports by
10Congress and the news media have demonstrated the devastating
11impact that increasing drug prices can have on the 60% of
12Americans and 90% of seniors that take prescription drugs.
13    (b) The General Assembly further finds that public reports
14describe a repeated pattern and practice of price gouging by
15certain prescription drug manufacturers once they acquire the
16ownership rights for a new generic drug.
17    (c) The General Assembly further finds that price gouging
18has forced patients to choose between copayments exceeding
19tens of thousands of dollars per year and risking their health
20to find a more affordable drug.
21    (d) The General Assembly further finds that this choice
22has led patients to delay or forgo necessary medications
23creating greater health risks and complications.

 

 

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1    (e) The General Assembly concludes that addressing
2accessibility of these life-saving medications is a matter of
3health, safety, and welfare for the People of the State of
4Illinois.
 
5    Section 5. Definitions. As used in this Act:
6    "Essential off-patent or generic drug" means any
7prescription drug sold within the State:
8        (1) for which all exclusive marketing rights, if any,
9    granted under the Federal Food, Drug, and Cosmetic Act,
10    Section 351 of the federal Public Health Service Act, and
11    federal patent law have expired;
12        (2) that appears on the model list of essential
13    medicines most recently adopted by the World Health
14    Organization or that has been designated by the United
15    States Secretary of Health and Human Services as an
16    essential medicine due to its efficacy in treating a
17    life-threatening health condition or a chronic health
18    condition that substantially impairs an individual's
19    ability to engage in activities of daily living; and
20        (3) that is actively manufactured and marketed for
21    sale in the United States by 3 or fewer manufacturers.
22    "Essential off-patent or generic drug" includes any
23drug-device combination product used for the delivery of a
24drug for which all exclusive marketing rights, if any, granted
25under the Federal Food, Drug, and Cosmetic Act, Section 351 of

 

 

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1the federal Public Health Service Act, and federal patent law
2have expired.
3    "Manufacturer" has the meaning provided in Section 15 of
4the Wholesale Drug Distribution Licensing Act. "Manufacturer"
5does not include an entity operating as a wholesale drug
6distributor as defined in Section 15 of the Wholesale Drug
7Distribution Licensing Act.
8    "Price gouging" means an unconscionable increase in a
9prescription drug's price that:
10        (1) would result in the wholesale acquisition cost of
11    a 30-day supply of the essential off-patent or generic
12    drug exceeding $20 and would result in an increase in the
13    wholesale acquisition cost of the essential off-patent or
14    generic drug of:
15            (A) 30% or more within the preceding year;
16            (B) 50% or more within the preceding 3 years; or
17            (C) 75% or more within the preceding 5 years; and
18        (2) is otherwise excessive and unduly burdens
19    consumers because of the importance of the essential
20    off-patent or generic drug to their health and because of
21    insufficient competition in the marketplace.
22    "Price gouging" does not include a price increase that can
23be reasonably justified by:
24        (1) an increase in the cost of producing the essential
25    off-patent or generic drug; or
26        (2) the cost of appropriate expansion of access to the

 

 

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1    essential off-patent or generic drug to promote public
2    health.
3    "State health plan" means the program of health benefits
4under the State Employees Group Insurance Act of 1971.
5    "Wholesale acquisition cost" has the meaning provided in
642 U.S.C. 1395w-3a.
7    "Wholesale drug distributor" has the meaning provided in
8Section 15 of the Wholesale Drug Distribution Licensing Act.
 
9    Section 10. Price gouging prohibited.
10    (a) A manufacturer or wholesale drug distributor shall not
11engage in price gouging in the sale of an essential off-patent
12or generic drug that is ultimately sold in Illinois.
13    It is not a violation of this Act for a wholesale
14distributor to increase the price of an essential off-patent
15or generic drug if the price increase is directly attributable
16to an increase in the wholesale acquisition cost for the
17essential off-patent or generic drug imposed on the wholesale
18drug distributor by the manufacturer of the drug.
19    For the purpose of the enforcement of this Act:
20        (1) the Director of Healthcare and Family Services
21    shall notify the Attorney General of any increase in the
22    price of any essential off-patent or generic drug under
23    the Medical Assistance Program under Section V of the
24    Illinois Public Aid Code that amounts to price gouging;
25    and

 

 

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1        (2) the Director of Central Management Services shall
2    notify the Attorney General of any increase in the price
3    of any essential off-patent or generic drug under the
4    State health plan that amounts to price gouging.
5    (b) If the Attorney General has reason to believe that a
6manufacturer or wholesale drug distributor of an essential
7off-patent or generic drug has violated this Act, then the
8Attorney General shall send a notice to the manufacturer or
9the wholesale drug distributor requesting a statement:
10        (1) itemizing the components of the cost of producing
11    the essential off-patent or generic drug;
12        (2) identifying the circumstances and timing of an
13    increase in materials or manufacturing costs that caused
14    an increase in the wholesale acquisition cost of the
15    essential off-patent or generic drug within the 5-year
16    period preceding the date of the price increase;
17        (3) identifying the circumstances and timing of any
18    expenditures made by the manufacturer to expand access to
19    the essential off-patent or generic drug and explaining
20    any improvement in public health associated with those
21    expenditures;
22        (4) identifying any communications with competitors of
23    distributors about that drug and any price changes; the
24    request for a statement shall serve as a litigation hold
25    regarding documents and communications about that drug;
26    and

 

 

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1        (5) providing any other information that the
2    manufacturer or wholesale drug distributor believes to be
3    relevant to a determination of whether a violation of this
4    Act has occurred.
5    Within 45 days after receipt of the request, the
6manufacturer or wholesale drug distributor shall submit the
7statement to the Attorney General.
8    To accomplish the objectives and carry out the duties
9prescribed in this Act, the Attorney General may issue
10subpoenas or examine under oath any person to determine
11whether a manufacturer or wholesale drug distributor has
12violated this Act.
13    (c) Upon petition of the Attorney General, a circuit court
14may issue an order:
15        (1) compelling a manufacturer or a wholesale drug
16    distributor:
17            (A) to provide a statement required under
18        subsection (b); or
19            (B) to produce specific records or other documents
20        requested by the Attorney General that may be relevant
21        to a determination of whether a violation of this Act
22        has occurred;
23        (2) restraining or enjoining a violation of this Act;
24        (3) restoring to any consumer, including a third-party
25    payor, any money acquired as a result of a price increase
26    that violates this Act;

 

 

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1        (4) requiring a manufacturer or wholesale drug
2    distributor that has engaged in price gouging in the sale
3    of an essential off-patent or generic drug to make the
4    drug available to participants in the State health plan or
5    Medical Assistance Program under Section V of the Illinois
6    Public Aid Code for a period of up to one year at the price
7    at which the drug was made available to participants in
8    Illinois immediately before the violation of this Act;
9        (5) imposing a civil penalty of up to $10,000 per day
10    for each violation of this Act;
11        (6) providing for the Attorney General's recovery of
12    costs and disbursements incurred in bringing an action
13    against a manufacturer found to be in violation of this
14    Act, including the costs of investigation and reasonable
15    attorney's fees; or
16        (7) granting any other relief.
17    In response to any petition brought by the Attorney
18General under this Section, a manufacturer or wholesale drug
19distributor who is alleged to have violated this Act may not
20assert as a defense that the manufacturer or wholesale drug
21distributor did not directly sell a product to a consumer
22residing in Illinois.
23    (d) Any financial information provided by a manufacturer
24or a wholesale drug distributor to the Attorney General in
25accordance with this Section may not be disclosed to the
26public by the Attorney General. The financial information,

 

 

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1while in the possession of the Attorney General, shall be
2exempt from disclosure by the Attorney General under the
3Freedom of Information Act. Notwithstanding the other
4provisions of this subsection, if it appears to the Attorney
5General that a manufacturer or wholesale drug distributor has
6engaged in or is engaging in any practice declared to be in
7violation of this Act and that legal proceedings would be in
8the public interest, then the Attorney General may disclose
9any financial information provided in accordance with this
10Section in support of the filing of an action in the circuit
11court.
 
12    Section 99. Effective date. This Act takes effect January
131, 2024.