Drugmakers cancel some price increases after California law takes effect

Some drugmakers are canceling or reducing some planned price increases in the United States after California enacted a new drug pricing transparency law. The California law, which began to take effect this year, requires pharmaceutical firms to give insurers, governments, and drug purchasers advance notice of large price increases.

Some drugmakers are canceling or reducing some planned price increases in the United States after California enacted a new drug pricing transparency law. The California law, which began to take effect this year, requires pharmaceutical firms to give insurers, governments, and drug purchasers advance notice of large price increases. In the past 3 weeks, Novartis AG, Gilead Sciences, Roche Holding, and Novo Nordisk sent notices to California health plans rescinding or reducing previously announced price increases on at least 10 drugs. The California measure, signed in October by Gov. Jerry Brown, is among the most aggressive efforts by states to peel back the secretive process of setting drug prices. The law requires pharmaceutical companies to notify insurers and government health plans at least 60 days before planned price increases of more than 16% during a 2-year period. The law is being challenged in court by the Pharmaceutical Research and Manufacturers of America. Many drugmakers have been complying in the interim, sending out notices to health plans.