NY State Senate Bill 2019-S256

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to consumer protection
Jan 09, 2019	referred to consumer protection

2019-S256 (ACTIVE) - Details

Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Add §396-rrr, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S6514
2013-2014: S2138
2015-2016: S4508
2017-2018: S5262
2021-2022: S3947

2019-S256 (ACTIVE) - Summary

Prohibits selling a drug subject to a shortage for an unconscionably excessive price.

2019-S256 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S256

SPONSOR: KENNEDY
 
TITLE OF BILL:

An act to amend the general business law, in relation to the price goug-
ing 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 short-
ages 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 to 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" that is "endan-
gering 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 near-
ly two dozen experts found that at least 15 deaths in recent years were
blamed on the shortages, either because the right drug wasn't available
or because of dosing errors and 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 unneces-
sary pain and forcing hospitals to give less effective treatments. This
has resulted in complications and longer hospital stays.

Just over half of the 549 U.S. hospitals responding to a survey 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.



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

At least 210 drugs in recent years 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, normal-
ly priced at $25.90 per dose, for $1,200.

 
PRIOR LEGISLATIVE HISTORY:

2017-18: S.5262 - Referred to Consumer Protection /A.7087 - Passed
Assembly
2016: S.4508 - Referred to Consumer Protection /A.6731 - Passed Assembly
2015: S.4508 - Referred to Consumer Protection /A.6731 - Passed Assembly
2014: S.2138-B - Referred to Consumer Protection/ A.3751-B - Passed
Assembly
2013: S.2138-B - Referred to Consumer Protection/ A.3751-B - Passed
Assembly

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT:

None.

 
EFFECTIVE DATE:
This bill will take effect immediately.

2019-S256 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    256
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 9, 2019
                                ___________
 
 Introduced  by  Sen. KENNEDY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation to the price goug-
   ing of medicine

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new section
 396-rrr to read as follows:
   §  396-RRR.  PRICE  GOUGING  OF  MEDICINE. 1. FOR THE PURPOSES OF THIS
 SECTION, "DRUG SUBJECT TO A SHORTAGE" SHALL MEAN  ANY  DRUG  OR  MEDICAL
 PRODUCT  INTENDED  FOR HUMAN USE PUBLICLY REPORTED AS BEING SUBJECT TO A
 SHORTAGE BY THE U.S.  FOOD  AND  DRUG  ADMINISTRATION  ON  ITS  WEBSITE,
 PROVIDED,  HOWEVER, THAT A DRUG OR MEDICAL PRODUCT SHALL ONLY BE CONSID-
 ERED A "DRUG SUBJECT TO A SHORTAGE" DURING THE PERIOD OF TIME THAT  SUCH
 DRUG OR MEDICAL PRODUCT IS LISTED AS BEING SUBJECT TO A SHORTAGE ON SUCH
 WEBSITE.
   2.  NO PARTY WITHIN THE CHAIN OF DISTRIBUTION OF ANY DRUG SUBJECT TO A
 SHORTAGE SHALL SELL OR OFFER TO SELL ANY SUCH DRUG SUBJECT TO A SHORTAGE
 FOR AN AMOUNT WHICH REPRESENTS AN UNCONSCIONABLY EXCESSIVE PRICE.
   3. WHETHER A PRICE IS UNCONSCIONABLY EXCESSIVE IS A  QUESTION  OF  LAW
 FOR THE COURT.
   (A)  THE  COURT'S  DETERMINATION  THAT A VIOLATION OF THIS SECTION HAS
 OCCURRED SHALL BE BASED ON ANY OF THE FOLLOWING FACTORS:
   (I) THAT THE AMOUNT OF THE EXCESS IN PRICE IS UNCONSCIONABLY EXTREME;
   (II) THAT THERE WAS AN EXERCISE OF UNFAIR LEVERAGE  OR  UNCONSCIONABLE
 MEANS; OR
   (III)  A  COMBINATION OF BOTH FACTORS IN SUBPARAGRAPHS (I) AND (II) OF
 THIS PARAGRAPH.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05721-01-9

 S. 256                              2
 
   (B) IN ANY PROCEEDING COMMENCED PURSUANT TO SUBDIVISION FOUR  OF  THIS
 SECTION, PRIMA FACIE PROOF THAT A VIOLATION OF THIS SECTION HAS OCCURRED
 SHALL INCLUDE EVIDENCE THAT:
   (I)  THE AMOUNT CHARGED REPRESENTS A GROSS DISPARITY BETWEEN THE PRICE
 OF THE DRUG SUBJECT TO A SHORTAGE WHICH WAS THE SUBJECT  OF  THE  TRANS-
 ACTION AND THEIR VALUE MEASURED BY THE PRICE AT WHICH SUCH DRUG WAS SOLD
 OR  OFFERED  FOR  SALE  BY THE DEFENDANT IN THE USUAL COURSE OF BUSINESS
 IMMEDIATELY PRIOR TO THE ONSET OF THE SHORTAGE; AND
   (II) THE AMOUNT CHARGED GROSSLY EXCEEDED THE PRICE AT WHICH  THE  SAME
 OR  SIMILAR  DRUG  SUBJECT TO A SHORTAGE WAS READILY OBTAINABLE BY OTHER
 PURCHASERS IN THE TRADE AREA. A DEFENDANT MAY REBUT A PRIMA  FACIE  CASE
 WITH  EVIDENCE  THAT  ADDITIONAL  COSTS  NOT  WITHIN  THE CONTROL OF THE
 DEFENDANT WERE IMPOSED ON THE DEFENDANT FOR THE DRUG SUBJECT TO A SHORT-
 AGE.
   4. WHERE A VIOLATION OF THIS SECTION IS ALLEGED TO HAVE OCCURRED,  THE
 ATTORNEY GENERAL MAY APPLY IN THE NAME OF THE PEOPLE OF THE STATE OF NEW
 YORK  TO  THE  SUPREME  COURT WITHIN THE JUDICIAL DISTRICT IN WHICH SUCH
 VIOLATION IS ALLEGED TO HAVE OCCURRED, ON NOTICE OF FIVE  DAYS,  FOR  AN
 ORDER  ENJOINING OR RESTRAINING COMMISSION OR CONTINUANCE OF THE ALLEGED
 UNLAWFUL ACTS. IN ANY SUCH PROCEEDING, THE COURT SHALL  IMPOSE  A  CIVIL
 PENALTY  IN  AN  AMOUNT  NOT TO EXCEED ONE HUNDRED THOUSAND DOLLARS AND,
 WHERE APPROPRIATE, ORDER RESTITUTION TO AGGRIEVED CONSUMERS.
   5. PRIOR TO APPLYING FOR AN ORDER FROM THE SUPREME COURT  PURSUANT  TO
 SUBDIVISION  FOUR OF THIS SECTION, THE ATTORNEY GENERAL, IN CONSULTATION
 WITH THE DEPARTMENT OF  HEALTH,  SHALL  CONSIDER  THE  PRICING  DYNAMICS
 UNIQUE TO THE SMALL AND INDEPENDENT DISTRIBUTORS WITHIN THE SUPPLY CHAIN
 INCLUDING,  BUT NOT LIMITED TO, THE PRICE CHARGED BY THE END USE DISPEN-
 SER RELATIVE TO ITS ACQUISITION COST.
   § 2. This act shall take effect immediately.

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Senate Bill S256

Sponsored By

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

2019-S256 (ACTIVE) - Details

2019-S256 (ACTIVE) - Summary

2019-S256 (ACTIVE) - Sponsor Memo

2019-S256 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S256

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Sponsored By

Timothy M. Kennedy

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

2019-S256 (ACTIVE) - Details

2019-S256 (ACTIVE) - Summary

2019-S256 (ACTIVE) - Sponsor Memo

2019-S256 (ACTIVE) - Bill Text download pdf

Comments