STAND. COM. REP. NO. 767

Honolulu, Hawaii

RE: S.B. No. 1328

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 1328 entitled:

"A BILL FOR AN ACT RELATING TO PRESCRIPTION DRUGS,"

begs leave to report as follows:

The purpose and intent of this measure is to require drug manufacturers to notify prescription drug benefit plans and pharmacy benefit managers of any planned increase in the wholesale price of certain drugs that would result in a sixteen percent or more increase over any two-year period.

Your Committee received testimony in support of this measure from the Hawaii Medical Service Association, Kaiser Permanente Hawai‘i, and one individual. Your Committee received testimony in opposition to this measure from the Pharmaceutical Research and Manufacturers of America. Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs.

Your Committee finds that one of the greatest threats to the affordability of health care coverage is the pharmaceutical industry's pricing of new and existing medications. According to testimony received by your Committee, between 2015 and 2018, overall drug spending for Hawaii members of a particular health maintenance organization increased one hundred forty-six percent for that organization's specialty pharmacy. New drugs are being approved and marketed at higher prices than their predecessor treatments, often with no difference in effectiveness or safety. Your Committee notes that hospitals and health plans report pricing information. It is therefore appropriate for pharmaceutical manufacturers to do the same when implementing major price increases. This measure will promote transparency in drug pricing and is an important step toward controlling excessive costs for prescription drugs.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1328 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,

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ROSALYN H. BAKER, Chair