Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Health, Human Services, and Commerce, Consumer Protection, and Housing, to which was referred H.B. No. 31, H.D. 2, entitled:

beg leave to report as follows:

The purpose of this measure is to require manufacturers of prescription drugs to provide quarterly reports that disclose the average wholesale price, the wholesale acquisition cost, the average manufacturer price, and the best price of prescription drugs dispensed in the State.

AARP Hawaii, the Kokua Council, and five individuals submitted testimony in support of this measure. The Department of Human Services, the Attorney General, and the Pharmaceutical Research and Manufacturers of America submitted testimony in opposition.

Your Committees agree that quarterly reports would assist the State to better negotiate discounts for state prescription drug programs. However, much of the information called for in this bill is already in the public domain.

Your Committees find that there is a need for drug marketing disclosure and pharmacy benefit manager transparency. Drug marketing disclosure laws can help policymakers determine the need for, and evaluate, countervailing measures such as evidence-based research, preferred drug lists, and counterdetailing. A pharmacy benefit manager transparency provision will help broaden the understanding of the role of pharmacy benefit managers and the incentives they receive from manufacturers. Your Committees agree that disclosure will give employers and health plans greater leverage to negotiate better agreements and achieve lower costs.

Upon further consideration, your Committees have amended this measure by deleting all of its provisions and adding sections 1 and 2 from S.B. No. 1440, S.D. 1, thereby requiring marketing disclosures by drug manufacturers and requiring transparency in pharmacy benefit managers. Your Committees have defected the date to July 1, 2099 to encourage further discussion of this measure.

As affirmed by the records of votes of the members of your Committees on Health and Human Services and Commerce, Consumer Protection, and Housing that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 31, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 31, H.D. 2, S.D. 1, and be referred to the Committees on Judiciary and Hawaiian Affairs and Ways and Means.