101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2882

 

Introduced , by Rep. Will Guzzardi

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Pharmaceutical and Health Affordability: Restrictions on Manufacturers' Amoral Behavior Through Reasonable Oversight Act. Provides that a manufacturer or wholesale drug distributor shall not engage in price gouging in the sale of an essential off-patent or generic drug. Provides that the Director of Healthcare and Family Services or Director of Central Management Services may notify the Attorney General of any increase in the price of any essential off-patent or generic drug under the Medical Assistance Program under the Illinois Public Aid Code or a State health plan, respectively, that amounts to price gouging. Provides that whenever the Attorney General has reason to believe that a manufacturer or wholesale drug distributor of an essential off-patent or generic drug has violated the Act, the Attorney General shall send a notice to the manufacturer or wholesale drug distributor requesting a specified statement. Provides that within 45 days after receipt of the request, the manufacturer or wholesale drug distributor shall submit the statement to the Attorney General. Provides that to accomplish the objectives and carry out the duties prescribed in the Act, the Attorney General may issue subpoenas or examine under oath any person to determine whether a manufacturer or wholesale drug distributor has violated the Act. Provides that upon petition of the Attorney General, a circuit court may issue specified orders against violations of the Act. Contains provisions concerning the disclosure of financial information provided by a manufacturer or wholesale drug distributor to the Attorney General. Effective January 1, 2020.


LRB101 00386 RPS 45392 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2882LRB101 00386 RPS 45392 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 5. Definitions. As used in this Act:
9    "Essential off-patent or generic drug" means any
10prescription drug sold within the State:
11        (1) for which all exclusive marketing rights, if any,
12    granted under the Federal Food, Drug, and Cosmetic Act,
13    Section 351 of the federal Public Health Service Act, and
14    federal patent law have expired;
15        (2) that appears on the model list of essential
16    medicines most recently adopted by the World Health
17    Organization or that has been designated by the United
18    States Secretary of Health and Human Services as an
19    essential medicine due to its efficacy in treating a
20    life-threatening health condition or a chronic health
21    condition that substantially impairs an individual's
22    ability to engage in activities of daily living; and
23        (3) that is actively manufactured and marketed for sale

 

 

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1    in the United States by 3 or fewer manufacturers.
2    "Essential off-patent or generic drug" includes any
3drug-device combination product used for the delivery of a drug
4for which all exclusive marketing rights, if any, granted under
5the Federal Food, Drug, and Cosmetic Act, Section 351 of the
6federal Public Health Service Act, and federal patent law have
7expired.
8    "Manufacturer" has the meaning provided in Section 15 of
9the Wholesale Drug Distribution Licensing Act. "Manufacturer"
10does not include an entity operating as a wholesale drug
11distributor as defined in Section 15 of the Wholesale Drug
12Distribution Licensing Act.
13    "Price gouging" means an unconscionable increase in a
14prescription drug's price that:
15        (1) would result in the wholesale acquisition cost of a
16    30-day supply of the essential off-patent or generic drug
17    exceeding $20 and would result in an increase in the
18    wholesale acquisition cost of the essential off-patent or
19    generic drug of:
20            (A) 30% or more within the preceding year;
21            (B) 50% or more within the preceding 3 years; or
22            (C) 75% or more within the preceding 5 years; or
23        (2) is otherwise excessive and unduly burdens
24    consumers because of the importance of the essential
25    off-patent or generic drug to their health and because of
26    insufficient competition in the marketplace.

 

 

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1    "Price gouging" does not include a price increase that can
2be reasonably justified by:
3        (1) an increase in the cost of producing the essential
4    off-patent or generic drug; or
5        (2) the cost of appropriate expansion of access to the
6    essential off-patent or generic drug to promote public
7    health.
8    "State health plan" means the program of health benefits
9under the State Employees Group Insurance Act of 1971.
10    "Wholesale acquisition cost" has the meaning provided in 42
11U.S.C. 1395w-3a.
12    "Wholesale drug distributor" has the meaning provided in
13Section 15 of the Wholesale Drug Distribution Licensing Act.
 
14    Section 10. Price gouging prohibited.
15    (a) A manufacturer or wholesale drug distributor shall not
16engage in price gouging in the sale of an essential off-patent
17or generic drug that is ultimately sold in Illinois.
18    It is not a violation of this Act for a wholesale
19distributor to increase the price of an essential off-patent or
20generic drug if the price increase is directly attributable to
21an increase in the wholesale acquisition cost for the essential
22off-patent or generic drug imposed on the wholesale drug
23distributor by the manufacturer of the drug or due to market
24forces in those cases where there are multiple competing
25generic drug products.

 

 

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1    For the purpose of the enforcement of this Act:
2        (1) the Director of Healthcare and Family Services may
3    notify the Attorney General of any increase in the price of
4    any essential off-patent or generic drug under the Medical
5    Assistance Program under Section V of the Illinois Public
6    Aid Code that amounts to price gouging; and
7        (2) the Director of Central Management Services may
8    notify the Attorney General of any increase in the price of
9    any essential off-patent or generic drug under the State
10    health plan that amounts to price gouging.
11    (b) If the Attorney General has reason to believe that a
12manufacturer or wholesale drug distributor of an essential
13off-patent or generic drug has violated this Act, then the
14Attorney General shall send a notice to the manufacturer or the
15wholesale drug distributor requesting a statement:
16        (1) itemizing the components of the cost of producing
17    the essential off-patent or generic drug;
18        (2) identifying the circumstances and timing of an
19    increase in materials or manufacturing costs that caused an
20    increase in the wholesale acquisition cost of the essential
21    off-patent or generic drug within the 5-year period
22    preceding the date of the wholesale acquisition cost
23    increase;
24        (3) identifying the circumstances and timing of any
25    expenditures made by the manufacturer to expand access to
26    the essential off-patent or generic drug and explaining any

 

 

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

 

 

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1    payor, any money acquired as a result of a price increase
2    that violates this Act;
3        (4) requiring a manufacturer or wholesale drug
4    distributor that has engaged in price gouging in the sale
5    of an essential off-patent or generic drug to make the drug
6    available to participants in the State health plan or
7    Medical Assistance Program under Section V of the Illinois
8    Public Aid Code for a period of up to one year at the price
9    at which the drug was made available to participants in
10    Illinois immediately before the violation of this Act;
11        (5) imposing a civil penalty of up to $10,000 for each
12    violation of this Act; or
13        (6) granting any other relief.
14    In response to any petition brought by the Attorney General
15under this Section, a manufacturer or wholesale drug
16distributor who is alleged to have violated this Act may not
17assert as a defense that the manufacturer or wholesale drug
18distributor did not directly sell a product to a consumer
19residing in Illinois.
20    (d) Any financial information provided by a manufacturer or
21a wholesale drug distributor to the Attorney General in
22accordance with this Section may not be disclosed to the public
23by the Attorney General. The financial information, while in
24the possession of the Attorney General, shall be exempt from
25disclosure by the Attorney General under the Freedom of
26Information Act. Notwithstanding the other provisions of this

 

 

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1subsection, if it appears to the Attorney General that a
2manufacturer or wholesale drug distributor has engaged in or is
3engaging in any practice declared to be in violation of this
4Act and that legal proceedings would be in the public interest,
5then the Attorney General may disclose any financial
6information provided in accordance with this Section in support
7of the filing of an action in the circuit court.
 
8    Section 99. Effective date. This Act takes effect January
91, 2020.