California Lawmaker Calls for Drug Company Accounting
The rising cost of prescription drugs has been receiving a lot of attention lately. Consumers complain about the cost of prescription drugs. Drug companies blame the enormous costs of research and development. Employers, legislators and medical professionals are caught in the middle.
In California, where the state spends more than $4 billion a year on prescription drugs, one lawmaker wants the drug companies to put up or shut up. Senator Jack Scott, D-Pasadena, has introduced a bill requiring drug companies doing business with the state to disclose how much they spend on research compared to their marketing expenses. Any company refusing to provide such financial information would be prohibited from doing business with the state. An amendment to the bill has also been offered that would protect the financial confidentiality of the information while still making it available for review by state lawmakers.
“We have a right to look into their finances,” Scott told the Pasadena Star-News. “One of the reasons they say drug prices are so high is because of how much money they have to spend on research and development,” Scott added. “But studies indicate their profits are among the highest among Fortune 500 companies.”
The Pharmaceutical Research and Manufacturer’s Association (PhRMA) has come out against the bill claiming it places an unfair burden on the industry and puts the companies dealing with the state at a competitive disadvantage.