Life Science Compliance Update

« Previous article | Home| Next article »

September 01, 2017

Chicago Proposes Drug Pricing Transparency Ordinance


Chicago Alderman Edward M. Burke recently held a hearing on the proposed city ordinance, “Chicago Drug Pricing Transparency Ordinance.” The ordinance would mandate that pharmaceutical manufacturers whose drugs are sold in Chicago must disclose any rise in prices ninety days in advance if those increases fall within one of the pre-selected categories.

The ordinance proposes establishing a Prescription Drug Price Review Board, which shall be responsible for: (1) reviewing trends in the list price of medications dispensed or prescribed through its services – either directly or through public and private partnerships; (2) publishing an annual report highlighting prescription drug pricing trends within the City and where the data suggests the need for legislative, administrative, or other policy changes and put the report on file with the City Council Committee on Finance semi-annually, and presenting it to the City Council Committee on Finance at a hearing at least once per calendar year; (3) promulgating public advisory opinions about specific drugs, drug classes, or drug manufacturers that satisfy the standards for pricing practices to its facilities, partners, website, and the City’s Benefits Management Division; (4) establishing a “Pharmaceutical Price Watch Hotline” to accept notifications and information about pharmaceutical price increases from the public; and (5) effectuating and enforcing the regulations.

The Hotline in number four is expected to be available via phone, email, internet portal, social media outlets, or other generally available methods of communication as designated by the Commissioner.

With respect to price increases, any manufacturers of pharmaceuticals sold in Chicago shall notify the City of Chicago Department of Public Health Commissioner of price increases and launch price notifications and justifications. For brand-name drugs, the manufacturers shall notify the Commissioner if a Wholesale Acquisition Cost (“WAC”) increases ten percent or more, if there is a twelve-month period WAC increase of $10,000 or more, or if they introduce a pharmaceutical that has a twelve-month WAC of $30,000 or more.

For a generic drug, manufacturers shall notify the Commissioner of a WAC increase of 25% or more, a twelve-month period WAC increase of $300 or more, or an introduction to market of a pharmaceutical that has a twelve-month WAC of $3,000 or more.

The proposed ordinance requires that the manufacturers justify the proposed price or price increases via documents and other information to substantiate their selection of the launch price or price increase, including research, materials, manufacturing, administrative expenses, life cycle management, market competition and context, manufacturer revenue and loss data, and estimated cost-effectiveness of the product.

The proposed ordinance states that Chicago has the ability to enact such an ordinance because “pursuant to its home rule power, the City of Chicago may exercise any power and perform any function relating to its government and affairs including the power to regulate for the protection of the public health, safety, morals, and welfare.”

Unfortunately, if enacted, the proposal will likely have an effect on the bottom line of pharmaceutical companies. “When you price control the way that this ordinance is proposed to do, it doesn’t allow for the reinvestment of those profits and money to create and develop other life-saving machines,” said Michael Reever, Chamber of Commerce.

« Previous article | Home| Next article »


Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.


Preview | Powered by FeedBlitz


February 2018
Sun Mon Tue Wed Thu Fri Sat
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28