AB259

Existing federal law establishes the Medicare program, which is a public health insurance program for persons 65 years of age and older and specified persons with disabilities who are under 65 years of age. (42 U.S.C. §§ 1395 et seq.) Existing federal law requires the United States Secretary of Health and Human Services to negotiate with the manufacturers of certain drugs and to establish the maximum fair price for certain drugs, which is the maximum price at which such drugs may be sold to a recipient of Medicare. (42 U.S.C. §§ 1320f-2, 1320f-3) Existing federal law requires the Secretary of Health and Human Services to publish those maximum fair prices. (42 U.S.C. § 1320f-4) Section 1 of this bill prohibits a person or entity that: (1) purchases a drug which is subject to a maximum fair price in this State from paying a price that is higher than the maximum fair price; or (2) seeks reimbursement for a drug subject to a maximum fair price which is delivered, dispensed or administered to a person in this State from seeking reimbursement at a rate which is higher than the maximum fair price. Section 1 exempts from such prohibitions certain providers of health coverage under federal law but prescribes a procedure by which such a provider of health coverage may elect to be subject to the provisions of section 1. Existing law: (1) prohibits certain trade practices which are deemed to be deceptive trade practices; and (2) provides for the enforcement of th