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Drug Companies Would Have to Disclose Profits, Production Costs, Under New Bill

StockMonkeys.com / Flickr
 

StockMonkeys.com / Flickr

Democratic Assemblymember David Chiu's bill would require that production costs associated with medications priced more than $10,000 a year be reported to the State of California. He says drug prices are too high.

"Impacting the overall cost of delivering health care, threatening the long term success of health care for all, and putting enormous cost pressures on state and local governments," says Chiu.

But University of Southern California pharmaceutical economics professor Jeff McCombs says the bill is a first step towards government regulation of drug pricing. And that would stifle innovation that could cure disease.

"There's a lot of legislators out there that don't understand the market system," says McCombs, who has been a consultant for several pharmaceutical companies.

"[Lawmakers] don't understand when you make a certain change, that the companies react to that and it has downstream consequences."

If the bill passes, drug pricing information would be posted online.