Bill Text: NY S03081 | 2021-2022 | General Assembly | Amended

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Bill Title: Prohibits selling a drug subject to a shortage for an unconscionably excessive price.

Spectrum: Moderate Partisan Bill (Democrat 9-2)

Status: (Vetoed) 2022-12-23 - VETOED MEMO.162 [S03081 Detail]

Download: New_York-2021-S03081-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         3081--B
            Cal. No. 461

                               2021-2022 Regular Sessions

                    IN SENATE

                                    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:

     1    Section 1. The general business law is amended by adding a new section
     2  396-rrr to read as follows:
     3    §  396-rrr.  Price  gouging  of  medicine. 1. For the purposes of this
     4  section, "drug subject to a shortage" shall mean  any  drug  or  medical
     5  product  intended  for human use publicly reported as being subject to a
     6  shortage by the U.S.  food  and  drug  administration  on  its  website,
     7  provided,  however, that a drug or medical product shall only be consid-
     8  ered a "drug subject to a shortage" during the period of time that  such
     9  drug or medical product is listed as being subject to a shortage on such
    10  website.
    11    2. No manufacturer, supplier, wholesaler, distributor or retail seller
    12  of  any  drug subject to a shortage shall sell or offer to sell any such
    13  drug subject to a shortage for an amount which represents an unconscion-
    14  ably excessive price.
    15    3. Whether a price is unconscionably excessive is a  question  of  law
    16  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

     1    (a)  The  court's  determination  that a violation of this section has
     2  occurred shall be based on any of the following factors:
     3    (i) that the amount of the excess in price is unconscionably extreme;
     4    (ii)  that  there was an exercise of unfair leverage or unconscionable
     5  means; or
     6    (iii) a combination of both factors in subparagraphs (i) and  (ii)  of
     7  this paragraph.
     8    (b)  In  any proceeding commenced pursuant to subdivision four of this
     9  section, prima facie proof that a violation of this section has occurred
    10  shall include evidence that:
    11    (i) the amount charged represents a gross disparity between the  price
    12  of  the  drug  subject to a shortage which was the subject of the trans-
    13  action and their value measured by the price at which such drug was sold
    14  or offered for sale by the defendant in the  usual  course  of  business
    15  immediately prior to the onset of the shortage; or
    16    (ii)  the  amount charged grossly exceeded the price at which the same
    17  or similar drug subject to a shortage was readily  obtainable  by  other
    18  purchasers in the trade area.
    19    (c) A defendant may rebut a prima facie case with evidence that:
    20    (i)  the increase in the amount charged preserves the margin of profit
    21  that the defendant received for the same  drug  subject  to  a  shortage
    22  prior to the onset of the shortage; or
    23    (ii)  additional  costs  not  within the control of the defendant were
    24  imposed on the defendant for the drug subject to a shortage.
    25    4. Where a violation of this section is alleged to have occurred,  the
    26  attorney general may apply in the name of the People of the State of New
    27  York  to  the  supreme  court within the judicial district in which such
    28  violation is alleged to have occurred, on notice of five  days,  for  an
    29  order  enjoining or restraining commission or continuance of the alleged
    30  unlawful acts. In any such proceeding, the court shall  impose  a  civil
    31  penalty  in  an  amount  not  to exceed twenty-five thousand dollars per
    32  violation or three times  the  gross  receipts  for  the  relevant  drug
    33  subject  to  the  shortage, whichever is greater, and where appropriate,
    34  order restitution to aggrieved parties.
    35    § 2. This act shall take effect immediately.