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California just moved a step closer to requiring drug makers to report and justify price hikes.

The state Senate on Wednesday approved legislation that would mandate companies to disclose any increase in the list price of a medicine by more than 10 percent during any 12-month period. And drug makers would also have to explain price hikes for medicines with a list price of more than $10,000 within 30 days of making such a move. If the bill becomes law, the state would have to issue public reports on costs and spending.


The effort is among a wave of legislation across the country designed to get a grip on the rising cost of medicines and force the pharmaceutical industry to explain how it makes pricing decisions. The topic has become a talking point in the presidential campaign. And the Obama administration recently proposed an experiment for lowering the cost of some Medicare drugs.

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  • I can think of a dozen ways to massage a balance sheet to justify a price hike, and few if any legislators would be able to figure it out. We’re talking high priced pharma number crunchers versus legislative bean counters, and this is much more complex than counting beans or monitoring county sewage effluent rates.

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