BP BHEAD INT H

AN ACT Relating to pharmaceutical price discrimination; adding a new chapter to Title 69 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that drug manufacturers and drug wholesalers engage in pricing practices that result in unfair price discrimination among the retail prescription pharmacies in the state of Washington, including the independent and chain pharmacies, paying the highest prices for drugs, regardless of the quantities they purchase. The legislature further finds that as part of this practice, many manufacturers refuse to sell to retail pharmacies directly, but sell through wholesalers at higher prices than charged to other privileged purchasers. This practice adversely affects the retail pharmacies' ability to bid for prescription services in proposed insurance contracts, to form or become part of any health care reform alliances, and to offer consumers a reasonable price in comparison to those charged by the privileged purchasers who receive the deep discounts. The legislature finds that this price discrimination results in subsidization by consumers and pharmacies to further this practice of deep discounts to privileged purchasers.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Drug" means any substance subject to section 201(g) of the federal food, drug and cosmetic act except for injectable products.

(2) "Purchaser" means any person who sells or dispenses drugs directly to consumers, or any co-op or buying group that purchases drugs on behalf of pharmacies.

(3) "Seller" means any person who sells drugs to purchasers.

(4) "Manufacturer" means any person who sells drugs to sellers, purchasers, or both.

NEW SECTION. Sec. 3. (1) Every manufacturer shall offer drugs to every seller with all rights and privileges offered or accorded by the manufacturer to the most favored seller, including purchase prices for similar volume purchases. Every manufacturer shall offer rebates, free merchandise, and similar trade concessions on proportionally equal terms to every seller. Nothing in this subsection prohibits the giving of a discount for volume purchases, so long as the discount is justified by the economies or efficiencies resulting from those volume purchases and the discount is made available to all sellers on proportionally equal terms.

(2) Every manufacturer or seller shall offer drugs to every purchaser, with all rights and privileges offered or accorded by the manufacturer or seller to the most favored purchaser, including purchase prices for similar volume purchases. A manufacturer or seller shall offer rebates, free merchandise, samples, and similar trade concessions on proportionally equal terms to every purchaser. Nothing in this subsection prohibits the giving of a discount for volume purchases, so long as such discount is justified by the economies or efficiencies resulting from such volume purchases and such discount is made available to all purchasers on proportionally equal terms.

(3) This section applies to any purchase of drugs that are delivered to a purchaser or purchaser facility located in this state.

NEW SECTION. Sec. 4. Agencies of state government and political subdivisions of the state may not purchase any drugs from a manufacturer or seller that engages in any price discrimination prohibited by this chapter.

NEW SECTION. Sec. 5. (1) Any purchaser damaged by violation of this chapter may bring an action against the seller to recover treble damages sustained by reason of such violation. Proof of price discrimination shall constitute prima facie evidence of damage to a disfavored purchaser. The monetary amount of the unlawful discrimination is conclusively presumed to equal the amount of sustained damages. The disfavored purchaser may establish further damages.

(2) Any person who violates this chapter or any rule adopted under this chapter or any order or injunction to cease and desist from such violations shall be required to pay a civil penalty of not less than one thousand dollars nor more than one hundred thousand dollars per violation.

NEW SECTION. Sec. 6. The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. Violations of this chapter are not reasonable in relation to the development and preservation of business. A violation of this chapter is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW.

NEW SECTION. Sec. 7. Sections 1 through 6 of this act shall constitute a new chapter in Title 69 RCW.