New law holds Big Pharma accountable in California

This month, Governor Brown signed into law a bill that requires more transparency from pharmaceutical companies regarding their prices. Senate Bill 17 (SB 17) was heavily advocated for by California Teamsters along with a coalition of other labor unions because the skyrocketing cost of prescription drugs are hurting working families.

“When union members are forced to shoulder the unnecessary rising costs of health care, that is money that is taken away from wages,” said Local 856 Secretary-Treasurer/Principal Officer Peter Finn.

Price hikes have gotten so bad that unlikely allies – unions, employers, and insurance companies – all worked together help pass SB 17.

“Prescription drug costs are the fastest growing costs in providing health care,” said Barry Broad, Director of the California Teamsters Public Affairs Council. “Year over year, it’s growing faster in real dollar terms way ahead of health care inflation in other areas.”

Teamsters 856 leveraged relationships with California lawmakers to ensure the bill passed. “We visited key legislators in the Senate and the Assembly who tended to be more moderate to talk with them about the importance of the bill,” said Local 856 Political Director Tricia Suzuki-Blinstrub.

Exponential price increases have become the norm. It is now far too common to hear about life-saving drugs like EpiPens or insulin increasing in price inexplicably. In fact, the price of insulin has increased 200% in the last eight years, and the price of doxycycline, an antibiotic that treats bronchitis and acne has increased 900% in less than a year.

SB 17 requires pharmaceutical companies to give major purchasers 60-days advance notice before increasing the price of a prescription drug above a specified threshold. The bill also requires companies to provide an explanation of why the drug’s price is being increased, which allows the public to pushback and pressure companies to maintain fairness in their pricing.

Health funds like the Local 856 Health & Welfare Trust Fund would be among those that receive advance notice of cost increases. The Trust Fund would then have the opportunity to negotiate or even stop doing business with the company increasing their prices.

“SB 17 will give our Trust Fund similar leverage in negotiations with pharmaceutical companies that previous transparency bills gave us in negotiations over premium rates with providers such as Kaiser,” said Peter. “Overall, transparency in the health care industry leads to lower costs for our health plans, which translates to lower costs for our members.”

Teamsters 856 is no stranger to the fight to hold companies accountable for outrageous price hikes. Earlier this year, members attended a public hearing in San Francisco about the real-life impact insurance rate hikes have on families.