BILL NUMBER:S4508

TITLE OF BILL:  An act to amend the general business law, in relation
to the price gouging of medicine

PURPOSE OR GENERAL IDEA OF THE BILL:

This legislation adds medicine to the list of goods and services that
can be classified as possibly being subject to price gouging.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Section 396-rrr of the general business law is amended to
add medicine to the list of consumer goods that can be classified as
subject to price gouging. The classification of medicines falling
under this section of law will be determined by the publicly reported
drug shortages reported by the U.S. Food and Drug Administration.

Section 2: Bans the price gouging of medicines listed as been in short
supply by the US FDA.

Section 3: Allows for the courts to determine if the price established
for a drug in short supply is unconscionably excessive and establishes
the criteria for the court to consider such determination.

Section 4: Extends medicine price gouging prosecution powers to the
              

Attorney General of New York State.

JUSTIFICATION:

According data uncovered by the Associated Press and made public on
September 23, 2011, there is an ongoing and "severe shortage of drugs
for chemotherapy, infections and other serious ailments is endangering
patients and forcing hospitals to buy life-saving medications from
secondary suppliers at huge markups because they can't get them any
other way."

An Associated Press review of industry reports and interviews with
nearly two dozen experts found at least 15 deaths in the past 15
months blamed on the shortages, either because the right drug wasn't
available or because of dosing errors or other problems in
administering or preparing alternative medications.

The shortages, mainly involving widely-used generic injected drugs
that ordinarily are cheap, have been delaying surgeries and cancer
treatments, leaving patients in unnecessary pain and forcing hospitals
to give less effective treatments. That's resulted in complications
and longer hospital stays.

Just over half of the 549 U.S. hospitals responding to a survey this
summer by the Institute for Safe Medication Practices, a patient
safety group, said they had purchased one or more prescription drugs
from so-called "gray market vendors" - companies other than their
normal wholesalers. Most also said they've had to do so more often of
late, and 7 percent reported side effects or other problems.


"Hospital pharmacists "are really looking at this as a crisis. They
are scrambling to find drugs," the AP article read.

The Associated Press found that among the reasons for drug shortages
was price gouging by secondary market vendors. It is obvious that the
owners of these secondary market companies called "gray market" are
placing profit over lives and Americans have been found to be dying
due to this practice.

"Secondary, "gray market" vendors are business firms that buy scarce
drugs from small regional wholesalers, pharmacies or other sources aid
then market them to hospitals, often at many times the normal price,
These sellers may not be licensed, authorized distributors," appeared
in the AP news story.

According to pharmacy industry representatives, at least 15 recent
deaths to drug shortages based on reports by medical personnel, but
many deaths and injuries go unreported.

So far this year, 210 drugs have been added to the list of drugs in
short supply. The average price markup on drugs sold by secondary
distributors was 650 percent, according to an Aug. 16 report by the
Premier Healthcare Alliance, a group that helps U.S. hospitals and
other health providers improve their patient care and finances.

The Associated Press also reported that, in an extreme case, one
vendor was offering a generic drug for dangerously high blood
pressure, normally priced at $25.90 per dose, for $1,200.

PRIOR LEGISLATIVE HISTORY:

2014: S2138B Referred to Consumer Protection / A3751-B Passed
Assembly. A8801 of 2011, Passed Assembly 2012

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT:

None

EFFECTIVE DATE:

This bill will take effect immediately.