California Legislature Passes Senator Wiener’s Drug Co-Pay Bill to Extend Consumer Price Gouging Protections

SB 1021 extends expiring drug pricing protections that cap monthly co-pays and set drug pricing standards, and also ensures these pricing protections apply to HIV/AIDS prevention drugs
August 28, 2018

Sacramento –  Today, the California Legislature passed Senator Scott Wiener’s Senate Bill 1021, which will keep out-of-pocket drug costs low for consumers by preserving and strengthening existing drug pricing protections. SB 1021 does this by extending drug co-pay limits and prescription drug pricing standards put in place in 2015 under a bill (AB 339) authored by Assemblymember Rich Gordon, which are currently set to expire at the end of 2019. SB 1021 also strengthens these protections, including by ensuring these pricing protections apply to HIV prevention drugs.

SB 1021 passed with 33 votes. It will now go to the Governor for his signature.

SB 1021 is sponsored by Health Access and co-authored by President pro Tempore Toni Atkins (D-San Diego) and Assemblymember Jesse Gabriel (D- Encino).  It is supported by public health advocacy organizations, including the San Francisco AIDS Foundation, APLA Health, and the California LGBT Health and Human Services Network.

Prior to the imposition of these protections under AB 339, consumers could pay thousands of dollars in one month alone for badly needed medication. SB 1021 extends the drug co-pay limits of $250 for a 30-day supply for an additional five years beyond its current sunset date. The bill also makes permanent drug pricing standards that keep insurance companies from routinely placing specialty drugs on their highest pricing tiers.

SB 1021 also ensures that the provisions of the bill cover drugs such as PrEP that prevent the transmission of HIV/AIDS, not just those that treat it. PrEP (pre-exposure prophylaxis), if taken consistently, reduces the risk of HIV transmission by nearly 100%. These protections will be in place until January 1, 2023.

In 2014, Senator Wiener, then a member of the San Francisco Board of Supervisors, became the first elected official to announce he was on PrEP, in hopes of spreading awareness and reducing stigma regarding PrEP.

“Consumers shouldn’t be saddled with huge out of pocket costs for their medicaiton when they are just trying to keep themselves and their families healthy,” said Senator Wiener. “These protections are working to help protect all consumers, and I am glad the Legislature recognizes the importance of mainting these protections. This bill will also help us in our work to increase use of PrEP so that we can continue the progress we have made to reduce new HIV infections.”

“We have made significant advances in developing drugs to treat conditions that were previously fatal but are now curable with medication, such as Hepatitis C,“ said President pro Tem Atkins. “Other previously fatal conditions, such as HIV, have become treatable as a chronic condition. But we must ensure that everyone can afford to benefit from these breakthrough therapies. People should not have to choose between taking their medication or putting food on the table when drugs are increasingly more expensive. This bill caps the amount of money a consumer needs to pay out of their pocket and prohibits health insurance companies from shifting more of these costs onto consumers through their drug formularies. I want to thank Senator Wiener for his leadership on this important issue.”

“No one feels the pain of high prescription drug prices more than those with serious and chronic conditions, even those who have coverage,” said Anthony Wright, executive director of Health Access California, the statewide health consumer advocacy coalition.  SB 1021 is needed to extend patient protections for those who require the most expensive specialty medications, ensuring that their out-of-pocket costs are capped, so life-saving medications remain accessible. No person should be forced to pay thousands of dollars for a single prescription.”

Before AB 339 went into effect, California residents with serious and chronic conditions like cancer, HIV/AIDS, multiple sclerosis, and lupus were particularly vulnerable to higher out of pocket costs for their medication. Specialty prescription drugs were often placed on the highest tier in the drug pricing formulary, which put them out of reach for many patients.

SB 1021 also adds several provisions not included in AB 339.  In addition to ensuring AB 339 pricing protections apply to HIV prevention medication, SB 1021 also codifies an existing Department of Managed Health Care regulation that prevents the cost of a drug copay from exceeding the retail price.  Finally, SB 1021 limits the number of tiers in health plans’ formularies to four, consistent with Covered California and Medicare formulary standards.