NY State Senate Bill S5262

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

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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Actions

view actions (2)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to consumer protection
Mar 17, 2017	referred to consumer protection

Co-Sponsors

S5262 (ACTIVE) - Details

See Assembly Version of this Bill:: A7087
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, A8801
2013-2014: S2138, A3751
2015-2016: S4508, A6731
2019-2020: S256
2021-2022: S3947

S5262 (ACTIVE) - Summary

Relates to price gouging of medicine.

S5262 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S5262             Revised 01/24/18

SPONSOR: LANZA
 
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 treat-
ments, leaving patients in unnecessary 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 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.

The AP article read: "Hospital pharmacists 'are really looking at this
as a crisis. They are scrambling to find drugs'". 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 second-
ary market companies called "gray markets" 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, 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: 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.

S5262 (ACTIVE) - Bill Text download pdf


                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5262

                       2017-2018 Regular Sessions

                            I N  S E N A T E

                             March 17, 2017
                               ___________

Introduced  by  Sen.  LANZA  -- 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.
  (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:

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

                                                           LBD07926-01-7

S. 5262                             2

  (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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The New York State Senate

senate Bill S5262

Sponsored By

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

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Co-Sponsors

S5262 (ACTIVE) - Details

S5262 (ACTIVE) - Summary

S5262 (ACTIVE) - Sponsor Memo

S5262 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S5262

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Sponsored By

Andrew J. Lanza

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

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Actions

Co-Sponsors

Luis R. Sepúlveda

S5262 (ACTIVE) - Details

S5262 (ACTIVE) - Summary

S5262 (ACTIVE) - Sponsor Memo

S5262 (ACTIVE) - Bill Text download pdf

Comments