On Monday, California adopted a law that requires drug makers to explain and justify price hikes, making it only the third state in the country to demand some transparency in response to rising medicine prices. Although the law does not actually allow the state to control pricing, the pharmaceutical industry fought the effort over concerns other states will now pursue similar legislation, since California is often seen as a bellwether. We spoke with state Sen. Ed Hernandez, the Democratic legislator who shepherded the bill — and who believes it can force a change in the national conversation about drug pricing.
What do you hope to gain by pursuing transparency, as you call it?
There are two ways to think about how you can control prices. One is setting rates or capping fees. But we still live in a system where we don’t need to do that right now. And transparency has worked elsewhere in the health care industry — Medicare, provider fees, hospitals, health plans. Every segment of the health care market, with the exception of prescription drugs, has some type of checks and balances. We have to have a conversation about controlling the cost of prescription drug bills, which are getting larger. It’s time for this to happen.
We’re now requiring everybody to purchase health care. So if we’re going to require our citizens to buy that, we as policy makers have to need to make sure they have the best price and are not gouged.
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