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A California bill that would require drug makers to report and justify price hikes took a big step toward reality on Monday night. The state Assembly overwhelmingly passed the legislation and it now goes to the Senate for approval, which legislative sources say may occur as soon as today.

The bill, which has been vociferously fought by the pharmaceutical industry, could become one of the most comprehensive state efforts to address pricing transparency. For instance, drug makers would have to provide 60-day notice to insurers and government health plans before increasing list prices of a medicine that costs more than $40, by 16 percent in a two-year period.


If the legislation becomes law, health plans would also have to provide detailed information about prescription drug costs and the portion of premiums attributed to this expense (here is a fact sheet).

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