In a unanimous 9 to 0 vote Tuesday, the San Francisco County Board of Supervisors passed a first-in-the-nation drug pricing resolution, “…supporting City, State, and Federal efforts to reduce pharmaceutical prices and making the rate-setting process more transparent.”
Introduced by Board President David Chiu and cosponsored by Supervisors Weiner & Campos and backed by AHF, the resolution seeks to bring transparency to the pricing and purchasing of prescription medications by government agencies—by far the largest purchaser of drugs. Resolution follows passage of Proposition D, a ballot measure approved by San Francisco voters that requires city and county officials to “use all available opportunities to reduce the City’s cost of prescription drugs.”
SAN FRANCISCO (March 12, 2014) The Board of Supervisors for the County of San Francisco made history Tuesday when, in a unanimous 9 to 0 vote (with two Supervisors not present), it adopted a resolution intended to bring transparency to, and reduce the overall pricing of prescription medications in San Francisco. The resolution, introduced by Supervisor and Board President David Chiu (D, District 3) and cosponsored by Supervisor Scott Weiner (D, District 8) and Supervisor David Campos (D, District 9) and backed by the AIDS Healthcare Foundation (AHF), seeks to bring transparency to the pricing and purchasing of prescription medications by government agencies—by far the largest purchaser of drugs. The resolution follows the recent passage of Proposition D, a ballot measure overwhelmingly approved by San Francisco voters last November that requires city and county officials to “use all available opportunities to reduce the City’s cost of prescription drugs.” Chiu’s resolution now directs San Francisco government officials to support, “…City, State, and Federal efforts to reduce pharmaceutical prices and making the rate-setting process more transparent.”
“All San Franciscans suffer because of rising drug prices. Tax dollars that should be used to help our schools, improve MUNI, or make our neighborhoods safer instead go to pay drug manufacturers for excessive costs,” said David Chiu, President of the San Francisco Board of Supervisors. “The resolution passed by the Board of Supervisors affirms our commitment to the implementation of Proposition D and to supporting all City, State, and Federal efforts to reduce the heavy burdens that many San Franciscans face from pharmaceutical drug prices.”
“David Chiu and the entire San Francisco Board of Supervisors are providing genuine leadership in the life and death battle against sky high drug prices. The people of San Francisco and the nation deserve better than to be held ransom by drug companies that rack up billions of dollars of corporate welfare, while real folks often have to make the hard choice between their lifesaving medicines and putting food on their tables,” said Michael Weinstein, President of AIDS Healthcare Foundation, a backer of the resolution. “And while San Francisco leads the nation with this groundbreaking resolution, this is also only a first stop: we plan to take this measure to other cities around the country in a full frontal attack on the pricing and policies of the entire pharmaceutical industry.”
“As a mother caring for a young child and aging parents, the exploding cost of prescription medications has had a major impact on my family. I’ve seen firsthand how medications—some that cost merely pennies to make—are sold at staggeringly high prices,” said Leah Pimentel, member of the San Francisco Democratic Party and a Bayview mother. “That’s why this resolution is so important: because San Francisco always stands up for progressive values for people who need it most, like children and working families.”
“As one of the first supporters of Proposition D, we are proud that the Board of Supervisors unanimously passed a resolution to ensure more fair drug pricing for all San Franciscans,” said Jessica Lehman, Executive Director of Senior and Disability Action. “More work must be done to address the rising cost of prescription medications, a major problem for the senior and disabled community in San Francisco.”
“Seniors pay more for prescription drugs than anyone else in the United States and every year, costs are rising,” said Hene Kelly, member of the San Francisco Democratic Party and Vice President, California Association for Retired Americans. “Many members of the senior and disabled community in San Francisco are choosing between filling their medication and paying for essentials such as food, transportation, and phone, – I’m proud San Francisco took a strong stance to make fair drug pricing a reality for all of us”
In November 2013, San Francisco voters overwhelmingly approved Proposition D, a first-in-the-nation drug pricing ballot measure that allowed San Franciscans to speak out on the skyrocketing cost of prescription drugs. The measure garnered 80% of the vote—72,978 of 95,612 total votes cast in an election that saw turnout of approximately 22%. The measure required San Francisco city and county officials to “use all available opportunities to reduce the City’s cost of prescription drugs.” In addition, it also instructed state and federal representatives to sponsor legislation “to reduce drug prices paid by the government.” Chiu’s resolution is one of the first official actions in response to Proposition D.
“This resolution is a concrete step toward gaining more transparency from the pharmaceutical industry in the shell game that so often is the drug pricing process for government drug programs. I thank Board President Chiu for introducing the resolution and all Supervisors for taking this issue so seriously,” said Dale Gluth, Bay Area Regional Director for AIDS Healthcare Foundation, who worked closely on the Proposition D campaign over the past year. “Proposition D—the catalyst for the resolution—was placed on the ballot last November by nearly 18,000 San Franciscans and had unanimous support from the Board of Supervisors, the San Francisco Chronicle, the San Francisco Democratic Party, the Alice B. Toklas LGBT Democratic Club, and a coalition of health advocacy and neighborhood organizations. We thank the Supervisor Chiu and the Entire Board for swiftly adopting this resolution earlier today.”
In addition to finding ways the city can reduce its cost of the more than $23 million San Francisco spends on medications, the resolution looks to shine a light on the ability for drug manufactures to set any price for essential medications, no matter how high the cost.
Following is the full text of the “Resolution supporting City, State, and Federal efforts to reduce pharmaceutical prices and making the rate-setting process more transparent.”
WHEREAS, The Voters passed Proposition D in November, 2013, supporting the City’s efforts to lower drug prices and increase the transparency of the pharmaceutical rate setting process; and
WHEREAS, The Department of Public Health spends over 23 million dollars on purchasing pharmaceuticals for its patient population; and
WHEREAS, Drug manufacturers contend that information as to how the rates for various pharmaceuticals are set are trade secret protected and subject to other regulatory prohibitions on disclosure; and
WHEREAS, Public entity purchasers must rely upon the manufacturers’ representations that the prices quoted are the lowest available, even with discounted drugs covered by federal programs; and
WHEREAS, The Department of Veterans Affairs purchases prescription drugs at lower prices than those provided by manufacturers to the City; and
WHEREAS, Government entities covered by The Omnibus Budget Reconciliation Act of 1990, which enacted the Section 340B discount program that provides these entities with significantly discounted drugs for outpatient care are unable to obtain pricing information; and
WHEREAS, in July, 2011, the “340B Improvement Act of 2011” was introduced that would have extended 340B pricing to the inpatient setting but the bill was defeated; and
WHEREAS, Governor Brown vetoed Senate Bill 746, sponsored by Senator Leno, which would have required health plans and insurers to disclose a greater degree of information on a variety of aspects of charges and rates, including prescription drugs; the City had taken an official position in support of Senate Bill 746; and
WHEREAS, the 2003 Federal Medicare Prescription Drug, Improvement, and Modernization Act brought drug manufacturers tens of millions of new customers funded by taxpayers yet prohibits the Medicare program from directly negotiating lower prescription drug prices with pharmaceutical manufacturers; and
WHEREAS, The City must explore all means to reduce the price of pharmaceuticals for its patients and price transparency as part of a broader set of strategies to reduce costs; and now, therefore, be it
RESOLVED, That the Board of Supervisors urges the Department of Public Health to explore the feasibility of the use of consumer websites that provide price comparisons for specific medications by the residents of San Francisco; and, be it
FURTHER RESOLVED, That the Board of Supervisors asks the City to pursue extension of 340B pricing to inpatient settings in the City’s federal legislative agenda for 2014; and, be it
FURTHER RESOLVED, That the Board of Supervisors supports the reintroduction of Senate Bill 746 and other similar State legislation; and, be it
FURTHER RESOLVED, That the Board of Supervisors supports innovative state and federal efforts to reduce pharmaceutical prices and increase the transparency of the pharmaceutical rate-setting process.
