Advisory Market Update

This the Advisory Market Update for July 2020 from IntegriChain. We want to keep you up-to-date with relevant, timely industry insights and regulatory updates that may impact your business. If you have questions on any of the content found in this or other newsletters, reach out to your IntegriChain Advisory Lead or advisory@integrichain.com and we would be happy to talk you through it.

Did You Know?

Pricing Transparency: CA Litigation – Advance Notice of Price Increase Not a Confidential Trade Secret

The California Court of Appeals recently issued a decision in a case stemming from Amgen’s attempt to block a California Public Records Act (“CPRA”) request from Reuters News seeking Amgen’s price increase notification it had provided to CA purchasers in accordance with price transparency regulations.

As per CA Senate Bill 17 “Health care: prescription drug costs,” pharmaceutical manufacturers are required to provide advance notice of WAC increases greater than 16% within the previous two calendar years. Manufacturers must provide this notice 60 days prior to the effective date of the increase. 

Manufacturers had been under the impression that these notices would remain confidential and only received by specified prescription drug purchasers who signed up for them. However, the court ruled that Senate Bill No. 17, “does not impose any confidentiality obligations on the recipients of the price increase notices or restrict their use of the information provided in the notices,” therefore, these notifications can be made public.

You can read the entire publication here.

 

Medicaid State Supplemental Program: CA 2020 Budget – Relevant Medi-Cal Changes for Manufacturers

California’s approved 2020-21 budget included two changes to the state’s Medicaid program which will have a direct impact on manufacturers.

The state amended the definition of “best price,” as related to supplemental rebates, to read, “manufacturer’s lowest price available to any foreign or domestic class of trade organization or entity, including, but not limited to, wholesalers, retailers, hospitals, repackagers, providers, or governmental entities, that contracts with a manufacturer…inclusive of cash discounts, free goods, volume discounts, rebates, and on- or off-invoice discounts or credits…” (emphasis added). By including foreign prices, manufacturers can expect the state to seek even deeper discounts through its various supplement rebate programs.

The budget bill also authorized the department to seek federal approvals to establish and administer a drug rebate program to collect manufacturer rebates for selected populations of California residents that are ineligible for full-scope Medi-Cal benefits.

If you’re interested, here’s where you can read SB-102 Public health omnibus and SB-17 Health care: prescription drug costs.