Public Act 0367 103RD GENERAL ASSEMBLY |
Public Act 103-0367 |
HB3957 Enrolled | LRB103 29676 CPF 56079 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 1. Short title. This Act may be cited as the |
Pharmaceutical and Health Affordability: Restrictions on |
Manufacturers' Amoral Behavior through Reasonable Oversight |
Act. |
Section 2. Legislative Findings. |
(a) The General Assembly finds that public reports by |
Congress and the news media have
demonstrated the devastating |
impact that increasing drug prices can have on the
60% of |
Americans and 90% of seniors that take prescription drugs. |
(b) The General Assembly further finds that public reports |
describe a repeated pattern and practice
of price gouging by |
certain prescription drug manufacturers once they acquire the |
ownership rights for a
new generic drug. |
(c) The General Assembly further finds that price gouging |
has forced patients to choose between
copayments exceeding |
tens of thousands of dollars per year and risking their health |
to find a more
affordable drug. |
(d) The General Assembly further finds that this choice |
has led patients to
delay or forgo necessary medications |
creating greater health risks and complications. |
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(e) The General Assembly concludes that addressing |
accessibility of these life-saving medications
is a matter of |
health, safety, and welfare for the People of the State of |
Illinois. |
Section 5. Definitions. As used in this Act: |
"Essential off-patent or generic drug" means any |
prescription drug sold within the State: |
(1) for which all exclusive marketing rights, if any, |
granted under the Federal Food, Drug, and Cosmetic Act, |
Section 351 of the federal Public Health Service Act, and |
federal patent law have expired; |
(2) that appears on the model list of essential |
medicines most recently adopted by the World Health |
Organization or that has been designated by the United |
States Secretary of Health and Human Services as an |
essential medicine due to its efficacy in treating a |
life-threatening health condition or a chronic health |
condition that substantially impairs an individual's |
ability to engage in activities of daily living; and |
(3) that is actively manufactured and marketed for |
sale in the United States by 3 or fewer manufacturers. |
"Essential off-patent or generic drug" includes any |
drug-device combination product used for the delivery of a |
drug for which all exclusive marketing rights, if any, granted |
under the Federal Food, Drug, and Cosmetic Act, Section 351 of |
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the federal Public Health Service Act, and federal patent law |
have expired. |
"Manufacturer" has the meaning provided in Section 15 of |
the Wholesale Drug Distribution Licensing Act. "Manufacturer" |
does not include an entity operating as a wholesale drug |
distributor as defined in Section 15 of the Wholesale Drug |
Distribution Licensing Act. |
"Price gouging" means an unconscionable increase in a |
prescription drug's price that: |
(1) would result in the wholesale acquisition cost of |
a 30-day supply of the essential off-patent or generic |
drug exceeding $20 and would result in an increase in the |
wholesale acquisition cost of the essential off-patent or |
generic drug of: |
(A) 30% or more within the preceding year; |
(B) 50% or more within the preceding 3 years; or |
(C) 75% or more within the preceding 5 years; and |
(2) is otherwise excessive and unduly burdens |
consumers because of the importance of the essential |
off-patent or generic drug to their health and because of |
insufficient competition in the marketplace. |
"Price gouging" does not include a price increase that can |
be reasonably justified by: |
(1) an increase in the cost of producing the essential |
off-patent or generic drug; or |
(2) the cost of appropriate expansion of access to the |
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essential off-patent or generic drug to promote public |
health. |
"State health plan" means the program of health benefits |
under the State Employees Group Insurance Act of 1971. |
"Wholesale acquisition cost" has the meaning provided in |
42 U.S.C. 1395w-3a. |
"Wholesale drug distributor" has the meaning provided in |
Section 15 of the Wholesale Drug Distribution Licensing Act. |
Section 10. Price gouging prohibited. |
(a) A manufacturer or wholesale drug distributor shall not |
engage in price gouging in the sale of an essential off-patent |
or generic drug that is ultimately sold in Illinois. |
It is not a violation of this Act for a wholesale |
distributor to increase the price of an essential off-patent |
or generic drug if the price increase is directly attributable |
to an increase in the wholesale acquisition cost for the |
essential off-patent or generic drug imposed on the wholesale |
drug distributor by the manufacturer of the drug. |
For the purpose of the enforcement of this Act, the |
Director of Healthcare and Family Services shall notify the |
Attorney General of any increase in the price of any essential |
off-patent or generic drug under the Medical Assistance |
Program under Section V of the Illinois Public Aid Code that |
amounts to price gouging. |
(b) If the Attorney General has reason to believe that a |
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manufacturer or wholesale drug distributor of an essential |
off-patent or generic drug has violated this Act, then the |
Attorney General may send a notice to the manufacturer or the |
wholesale drug distributor requesting a statement: |
(1) itemizing the components of the cost of producing |
the essential off-patent or generic drug; |
(2) identifying the circumstances and timing of an |
increase in materials or manufacturing costs that caused |
an increase in the wholesale acquisition cost of the |
essential off-patent or generic drug within the 5-year |
period preceding the date of the price increase; |
(3) identifying the circumstances and timing of any |
expenditures made by the manufacturer to expand access to |
the essential off-patent or generic drug and explaining |
any improvement in public health associated with those |
expenditures; |
(4) identifying any communications with competitors of |
distributors about that drug and any price
changes; the |
request for a statement shall serve as a litigation hold |
regarding documents and communications
about that drug; |
and |
(5) providing any other information that the |
manufacturer or wholesale drug distributor believes to be |
relevant to a determination of whether a violation of this |
Act has occurred. |
Within 45 days after receipt of the request, the |
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manufacturer or wholesale drug distributor shall submit the |
statement to the Attorney General. |
To accomplish the objectives and carry out the duties |
prescribed in this Act, the Attorney General may issue |
subpoenas or examine under oath any person to determine |
whether a manufacturer or wholesale drug distributor has |
violated this Act. |
(c) Upon petition of the Attorney General, a circuit court |
may issue an order: |
(1) compelling a manufacturer or a wholesale drug |
distributor: |
(A) to provide a statement required under |
subsection (b); or |
(B) to produce specific records or other documents |
requested by the Attorney General that may be relevant |
to a determination of whether a violation of this Act |
has occurred; |
(2) restraining or enjoining a violation of this Act; |
(3) restoring to any consumer, including a third-party |
payor, any money acquired as a result of a price increase |
that violates this Act; |
(4) requiring a manufacturer or wholesale drug |
distributor that has engaged in price gouging in the sale |
of an essential off-patent or generic drug to make the |
drug available to participants in the State health plan or |
Medical Assistance Program under Section V of the Illinois |
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Public Aid Code for a period of up to one year at the price |
at which the drug was made available to participants in |
Illinois immediately before the violation of this Act; |
(5) imposing a civil penalty of up to $10,000 per day |
for each violation of this Act; |
(6) providing for the Attorney General's recovery of |
costs and disbursements incurred in
bringing an action |
against a manufacturer found to be in violation of this |
Act, including the costs of
investigation and reasonable |
attorney's fees; or |
(7) granting any other relief. |
In response to any petition brought by the Attorney |
General under this Section, a manufacturer or wholesale drug |
distributor who is alleged to have violated this Act may not |
assert as a defense that the manufacturer or wholesale drug |
distributor did not directly sell a product to a consumer |
residing in Illinois. |
(d) Any financial information provided by a manufacturer |
or a wholesale drug distributor to the Attorney General in |
accordance with this Section may not be disclosed to the |
public by the Attorney General. The financial information, |
while in the possession of the Attorney General, shall be |
exempt from disclosure by the Attorney General under the |
Freedom of Information Act. Notwithstanding the other |
provisions of this subsection, if it appears to the Attorney |
General that a manufacturer or wholesale drug distributor has |
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engaged in or is engaging in any practice declared to be in |
violation of this Act and that legal proceedings would be in |
the public interest, then the Attorney General may disclose |
any financial information provided in accordance with this |
Section in support of the filing of an action in the circuit |
court. |
Section 99. Effective date. This Act takes effect January |
1, 2024.
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