S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3081--A
     Cal. No. 461
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 27, 2021
                                ___________
 
 Introduced by Sens. SALAZAR, BIAGGI, BRISPORT, GIANARIS, JACKSON, KRUEG-
   ER,  LANZA, REICHLIN-MELNICK, SANDERS -- read twice and ordered print-
   ed, and when printed to be committed  to  the  Committee  on  Consumer
   Protection  --  recommitted to the Committee on Consumer Protection in
   accordance with Senate Rule 6, sec. 8 -- reported favorably from  said
   committee,  ordered  to  first  and  second report, ordered to a third
   reading, amended and ordered reprinted, retaining  its  place  in  the
   order of third reading
 
 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 MANUFACTURER, SUPPLIER, WHOLESALER, DISTRIBUTOR OR RETAIL SELLER
 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 UNCONSCION-
 ABLY 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;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06581-03-1
 S. 3081--A                          2
 
   (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.
   (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; OR
   (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.
   (C) A DEFENDANT MAY REBUT A PRIMA FACIE CASE WITH EVIDENCE THAT:
   (I) THE INCREASE IN THE AMOUNT CHARGED PRESERVES THE MARGIN OF  PROFIT
 THAT  THE  DEFENDANT  RECEIVED  FOR  THE SAME DRUG SUBJECT TO A SHORTAGE
 PRIOR TO THE ONSET OF THE SHORTAGE; OR
   (II) ADDITIONAL COSTS NOT WITHIN THE CONTROL  OF  THE  DEFENDANT  WERE
 IMPOSED ON THE DEFENDANT FOR THE DRUG SUBJECT TO A SHORTAGE.
   4.  (A) 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 TWENTY-FIVE THOUSAND DOLLARS PER
 VIOLATION OR THREE TIMES  THE  GROSS  RECEIPTS  FOR  THE  RELEVANT  DRUG
 SUBJECT  TO  THE  SHORTAGE, WHICHEVER IS GREATER, AND WHERE APPROPRIATE,
 ORDER RESTITUTION TO AGGRIEVED PARTIES.
   (B) IN ADDITION TO ANY ACTION BROUGHT BY THE ATTORNEY GENERAL PURSUANT
 TO PARAGRAPH (A) OF THIS SUBDIVISION, A PERSON INJURED BY A VIOLATION OF
 THIS SECTION MAY BRING AN ACTION TO RECOVER DAMAGES. THE COURT MAY  ALSO
 AWARD REASONABLE ATTORNEYS FEES TO A PREVAILING PLAINTIFF.
   § 2. This act shall take effect immediately.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3081--B
     Cal. No. 461
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 27, 2021
                                ___________
 
 Introduced by Sens. SALAZAR, BIAGGI, BRISPORT, GIANARIS, JACKSON, KRUEG-
   ER,  LANZA, REICHLIN-MELNICK, SANDERS -- read twice and ordered print-
   ed, and when printed to be committed  to  the  Committee  on  Consumer
   Protection  --  recommitted to the Committee on Consumer Protection in
   accordance with Senate Rule 6, sec. 8 -- reported favorably from  said
   committee,  ordered  to  first  and  second report, ordered to a third
   reading, amended and ordered reprinted, retaining  its  place  in  the
   order of third reading -- passed by Senate and delivered to the Assem-
   bly,  recalled,  vote reconsidered, restored to third reading, amended
   and ordered reprinted, retaining its place in the order of third read-
   ing
 
 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 MANUFACTURER, SUPPLIER, WHOLESALER, DISTRIBUTOR OR RETAIL SELLER
 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 UNCONSCION-
 ABLY EXCESSIVE PRICE.
   3. WHETHER A PRICE IS UNCONSCIONABLY EXCESSIVE IS A  QUESTION  OF  LAW
 FOR THE COURT.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD06581-05-2
 S. 3081--B                          2
 
   (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.
   (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; OR
   (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.
   (C) A DEFENDANT MAY REBUT A PRIMA FACIE CASE WITH EVIDENCE THAT:
   (I)  THE INCREASE IN THE AMOUNT CHARGED PRESERVES THE MARGIN OF PROFIT
 THAT THE DEFENDANT RECEIVED FOR THE SAME  DRUG  SUBJECT  TO  A  SHORTAGE
 PRIOR TO THE ONSET OF THE SHORTAGE; OR
   (II)  ADDITIONAL  COSTS  NOT  WITHIN THE CONTROL OF THE DEFENDANT WERE
 IMPOSED ON THE DEFENDANT FOR THE DRUG SUBJECT TO A SHORTAGE.
   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 TWENTY-FIVE THOUSAND DOLLARS PER
 VIOLATION OR THREE TIMES  THE  GROSS  RECEIPTS  FOR  THE  RELEVANT  DRUG
 SUBJECT  TO  THE  SHORTAGE, WHICHEVER IS GREATER, AND WHERE APPROPRIATE,
 ORDER RESTITUTION TO AGGRIEVED PARTIES.
   § 2. This act shall take effect immediately.