Cost Transparency: Prescription Drugs (CTRx)
WAC Increase Report Data Now Available Through The Second Quarter 2019!#
When the Wholesale Acquisition Cost (WAC) of a prescription drug increases by more than 16%, including the proposed increase and the cumulative increases that occurred within the previous two calendar years prior to the current year, a manufacturer must report information related to the increase by the end of the following month from the quarter in which the proposed increase becomes effective.
- WAC Increase Report Data Now Available Through The Second Quarter 2019!
- CTRx Data and Reports
- Cost Transparency Rx (CTRx) Program
Register to Submit Prescription Drug Pricing Information#
Registration is open for manufacturers to access the online system to submit prescription drug information to OSHPD, as required by SB 17. The SIERA-CTRx online system will be available on January 1, 2019 for the submission of information for specified new prescription drugs introduced to market and specified increases in the wholesale acquisition cost of existing prescription drugs.
Submit Prescription Drug Pricing Reports#
Once registered to access the SIERA-CTRx online system, manufacturers may login and submit prescription drug pricing reports to OSHPD.
Current List of Registered Rx Purchasers#
Download the list of registered prescription drug purchasers for the purpose of 60-day advance notice of a specified increase in the wholesale acquisition cost of a prescription drug, as required by Senate Bill 17. This list will be updated weekly or as needed to include all current registrants.
CTRx Data and Reports#
A prescription drug manufacturer has two types of reporting requirements to OSHPD relating to prescription drug cost transparency.
WAC Increase Report#
When the WAC of a prescription drug increases by more than 16%, including the proposed increase and the cumulative increases that occurred within the previous two calendar years prior to the current year, a manufacturer must report information related to the increase by the end of the following month from the quarter in which the proposed increase becomes effective.
New Drug Report#
A manufacturer must also report to OSHPD information on new prescription drugs with a WAC of more than $670 for a course of therapy. Reported information on specified prescription drugs introduced to market in the first quarter of 2019 is now available.
Cost Transparency Rx (CTRx) Program#
SB 17 Overview#
Senate Bill (SB) 17 (Chapter 603, Statutes of 2017)
Senate Bill (SB) 17 was enacted on October 9, 2017, with the relevant provisions captured in §§127675 – 127686 of the Health and Safety Code (Division 107, Part 2, Chapter 9). There are four major reporting requirements manufacturers must comply with under the statute:
- 60-day notices of specified WAC increases to purchasers of prescription drugs who register with OSHPD
- Reports to OSHPD of specified WAC increases and related information on a quarterly basis
- 3-day notices to OSHPD of specified new drugs being introduced to the California market
- Reports to OSHPD of information related to specified new drugs being introduced to the California market.
There are also provisions that have been implemented by the Department of Managed Health Care and the California Department of Insurance.
January 1, 2018, SB 17 requires OSHPD to make available a registry of public and private purchasers for purposes of the 60-day advance notice requirement for specified increases in the wholesale acquisition cost of a prescription drug. Public and private purchasers may register with OSHPD beginning December 1, 2017 on this website.
January 1, 2019, regulations were adopted.
January 1, 2019, drug manufacturers must notify OSHPD within three days of introducing a new drug at a wholesale acquisition cost that exceeds the specified threshold. Within 30 days of this notification, manufacturers must submit additional information to OSHPD. OSHPD will publish this information on its website quarterly.
After January 1, 2019, drug manufacturers are required to submit to OSHPD information on the rationale for cost increases for existing drugs that fall under the reporting requirement. OSHPD will collect this information beginning April 2019 and publish on its website within 60 days of receipt from each manufacturer on a quarterly basis.
Wholesale Acquisition Cost (WAC)#
Wholesale Acquisition Cost (WAC) is defined in the U.S. Code as “…the manufacturer’s list price for [a] drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price…”
What is Senate Bill 17?
SB 17 (Hernandez, Statutes of 2017) seeks to increase prescription drug cost transparency by:
- Requiring advance notification to public and private purchasers before a significant prescription drug wholesale acquisition cost increase occurs, and making public certain information associated with the increase.
- Requiring the provision of information about the impact to health care plans and insurers of cost increases.
Are prescription drug purchasers required to register with OSHPD?
No. Registration is purely voluntary. However, specified prescription drug purchasers must register with OSHPD in order to receive advance notice of specified prescription drug wholesale acquisition cost increases.
I reimburse prescription drug manufacturers, but I am not a direct purchaser. Am I eligible to register for advance notice?
Yes. State purchasers, licensed health care service plans, health insurers holding a valid outstanding certificate of authority from the Insurance Commissioner, and pharmacy benefit managers as defined in subdivision (j) of Section 4430 of the Business and Professions Code that purchase or reimburse for prescription drugs are eligible to register for advance notice from manufacturers.
I am aware that there is an active lawsuit challenging the constitutionality of SB 17. Do I need to comply with SB 17 while the lawsuit is active?
Yes. Unless a court issues an order preventing OSHPD from implementing SB 17, you must comply with law. No order is in place at the present time.