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.

You may like these other stories...

By Jason Bramwell Government leaders of eight of the world's largest economies pledged on June 18 to take a tougher stance on fighting tax evasion. The Group of Eight (G8) leaders, who met in Northern Ireland,...
By Jason BramwellAttorney General Eric Holder is scheduled to testify on May 15 before the House Judiciary Committee, one day after he announced the Justice Department has opened a criminal investigation of the IRS for...
By Jason BramwellPresident Barack Obama says he will not tolerate political bias at the IRS and promised to get to the bottom of the agency's admitted targeting of conservative groups, according to a May 13 article in...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.