Bill Text: IL HB4900 | 2017-2018 | 100th General Assembly | Engrossed

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Bill Title: Creates the Illinois Generic Drug Pricing Fairness Act. Provides that a manufacturer or wholesale drug distributor shall not engage in price gouging in the sale of an essential off-patent or generic drug. Provides that the Director of Healthcare and Family Services or Director of Central Management Services may notify the Attorney General of any increase in the price of any essential off-patent or generic drug under the Medical Assistance Program under the Illinois Public Aid Code or a State health plan, respectively, that amounts to price gouging. Provides that whenever the Attorney General has reason to believe that a manufacturer or wholesale drug distributor of an essential off-patent or generic drug has violated the Act, the Attorney General shall send a notice to the manufacturer or wholesale drug distributor requesting a specified statement. Provides that within 45 days after receipt of the request, the manufacturer or wholesale drug distributor shall submit the statement to the Attorney General. Provides that to accomplish the objectives and carry out the duties prescribed in the Act, the Attorney General may issue subpoenas or examine under oath any person to determine whether a manufacturer or wholesale drug distributor has violated the Act. Provides that upon petition of the Attorney General, a circuit court may issue specified orders against violations of the Act. Contains provisions concerning the disclosure of financial information provided by a manufacturer or wholesale drug distributor to the Attorney General. Effective January 1, 2019.

Spectrum: Partisan Bill (Democrat 51-1)

Status: (Failed) 2019-01-08 - Session Sine Die [HB4900 Detail]

Download: Illinois-2017-HB4900-Engrossed.html

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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Illinois Generic Drug Pricing Fairness Act.
Section 5. Definitions. As used in this Act:
"Essential off-patent or generic drug" means any
prescription drug sold within the State:
(1) for which all exclusive marketing rights, if any,
granted under the Federal Food, Drug, and Cosmetic Act,
Section 351 of the federal Public Health Service Act, and
federal patent law have expired;
(2) that appears on the model list of essential
medicines most recently adopted by the World Health
Organization or that has been designated by the United
States Secretary of Health and Human Services as an
essential medicine due to its efficacy in treating a
life-threatening health condition or a chronic health
condition that substantially impairs an individual's
ability to engage in activities of daily living; and
(3) that is actively manufactured and marketed for sale
in the United States by 3 or fewer manufacturers.
"Essential off-patent or generic drug" includes any

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drug-device combination product used for the delivery of a drug
for which all exclusive marketing rights, if any, granted under
the Federal Food, Drug, and Cosmetic Act, Section 351 of the
federal Public Health Service Act, and federal patent law have
expired.
"Manufacturer" has the meaning provided in Section 15 of
the Wholesale Drug Distribution Licensing Act.
"Price gouging" means an unconscionable increase in a
prescription drug's price that:
(1) would result in an increase in the wholesale
acquisition cost of the essential off-patent or generic
drug of 30% or more within the preceding year, 50% or more
within the preceding 3 years, or 75% or more within the
preceding 5 years; or
(2) is otherwise excessive and unduly burdens
consumers because of the importance of the essential
off-patent or generic drug to their health and because of
insufficient competition in the marketplace.
"Price gouging" does not include a price increase that can
be reasonably justified by:
(1) an increase in the cost of producing the essential
off-patent or generic drug; or
(2) the cost of appropriate expansion of access to the
essential off-patent or generic drug to promote public
health.
"State health plan" means the program of health benefits

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under the State Employees Group Insurance Act of 1971.
"Wholesale acquisition cost" has the meaning provided in 42
U.S.C. 1395w-3a.
"Wholesale drug distributor" has the meaning provided in
Section 15 of the Wholesale Drug Distribution Licensing Act.
Section 10. Price gouging prohibited.
(a) A manufacturer or wholesale drug distributor shall not
engage in price gouging in the sale of an essential off-patent
or generic drug.
It is not a violation of this Act for a wholesale
distributor to increase the price of an essential off-patent or
generic drug if the price increase is directly attributable to
additional costs for the essential off-patent or generic drug
imposed on the wholesale drug distributor by the manufacturer
of the drug.
For the purpose of the enforcement of this Act:
(1) the Director of Healthcare and Family Services may
notify the Attorney General of any increase in the price of
any essential off-patent or generic drug under the Medical
Assistance Program under Section V of the Illinois Public
Aid Code that amounts to price gouging; and
(2) the Director of Central Management Services may
notify the Attorney General of any increase in the price of
any essential off-patent or generic drug under the State
health plan that amounts to price gouging.

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(b) If the Attorney General has reason to believe that a
manufacturer or wholesale drug distributor of an essential
off-patent or generic drug has violated this Act, then the
Attorney General shall send a notice to the manufacturer or the
wholesale drug distributor requesting a statement:
(1) itemizing the components of the cost of producing
the essential off-patent or generic drug;
(2) identifying the circumstances and timing of an
increase in materials or manufacturing costs that caused an
increase in the price of the essential off-patent or
generic drug within the 5-year period preceding the date of
the price increase;
(3) identifying the circumstances and timing of any
expenditures made by the manufacturer to expand access to
the essential off-patent or generic drug and explaining any
improvement in public health associated with those
expenditures; and
(4) providing any other information that the
manufacturer or wholesale drug distributor believes to be
relevant to a determination of whether a violation of this
Act has occurred.
Within 45 days after receipt of the request, the
manufacturer or wholesale drug distributor shall submit the
statement to the Attorney General.
To accomplish the objectives and carry out the duties
prescribed in this Act, the Attorney General may issue

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subpoenas or examine under oath any person to determine whether
a manufacturer or wholesale drug distributor has violated this
Act.
(c) Upon petition of the Attorney General, a circuit court
may issue an order:
(1) compelling a manufacturer or a wholesale drug
distributor:
(A) to provide a statement required under
subsection (b); or
(B) to produce specific records or other documents
requested by the Attorney General that may be relevant
to a determination of whether a violation of this Act
has occurred;
(2) restraining or enjoining a violation of this Act;
(3) restoring to any consumer, including a third-party
payor, any money acquired as a result of a price increase
that violates this Act;
(4) requiring a manufacturer or wholesale drug
distributor that has engaged in price gouging in the sale
of an essential off-patent or generic drug to make the drug
available to participants in the State health plan or
Medical Assistance Program under Section V of the Illinois
Public Aid Code for a period of up to one year at the price
at which the drug was made available to participants in
Illinois immediately before the violation of this Act;
(5) imposing a civil penalty of up to $10,000 for each

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violation of this Act; or
(6) granting any other relief.
In response to any petition brought by the Attorney General
under this Section, a manufacturer or wholesale drug
distributor who is alleged to have violated this Act may not
assert as a defense that the manufacturer or wholesale drug
distributor did not directly sell a product to a consumer
residing in Illinois.
(d) Any financial information provided by a manufacturer or
a wholesale drug distributor to the Attorney General in
accordance with this Section may not be disclosed to the public
by the Attorney General. The financial information, while in
the possession of the Attorney General, shall be exempt from
disclosure by the Attorney General under the Freedom of
Information Act. Notwithstanding the other provisions of this
subsection, if it appears to the Attorney General that a
manufacturer or wholesale drug distributor has engaged in or is
engaging in any practice declared to be in violation of this
Act and that legal proceedings would be in the public interest,
then the Attorney General may disclose any financial
information provided in accordance with this Section in support
of the filing of an action in the circuit court.
Section 99. Effective date. This Act takes effect January
1, 2019.