The Business Council of New York State has reviewed S.141 (Carlucci) and opposes its enactment for a number of reasons.
The bill would grant the Attorney General new oversight and authority to unnecessarily regulate the price of pharmaceuticals. The legislation gives broad and unusual power to the Attorney General to decide that any price change for a drug over a six month period is price gouging, and allows the price comparisons from other jurisdictions, not taking into account the vast differences in markets and plan designs.
Many businesses sell products at different prices in different markets depending on local competitive conditions. The regulation of one segment of the free market would be an over-arching interference by the Legislature especially considering that New York already has robust anti-gouging laws. We believe existing law, Section 396-r of the General Business Law, is adequate and appropriate as it addresses price gouging and gives enforcement authority to the Attorney General. It allows for injunctive relief, a civil penalty up to $25,000 and instructs the court as to the criteria for the finding of “unconscionably excessive”, rendering any new legal standard superfluous at best and a mechanism for complete price control at worst.
Lastly, we believe that S.141 is contrary to existing federal law. Federal patent law preempts any provision that interferes with the pricing of patented drugs, biologics, or devices and courts have found that “the underlying determination about the proper balance between innovators’ profit and consumer access to medication…is exclusively one for Congress. S.141 allows the state Attorney General to intervene whenever she feels a drug price is “unconscionably excessive”. This bill, as many similar from other states, is quite likely to fail Constitutional muster if challenged.
Due to the broad power afforded the Attorney General, the vagueness of the standards applied, already existing statutes dealing with gouging and the unnecessary interference in the free market, The Business Council of New York State, Inc. opposes the above legislation.