Public Act 103-0367
 
HB3957 EnrolledLRB103 29676 CPF 56079 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  



 
 
    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.
    (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 
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 
    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 
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 
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 
    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 
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.