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A03751 Summary:

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A03751 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         3751--B
                                                                Cal. No. 310
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 29, 2013
                                       ___________
 
        Introduced  by  M.  of  A.  CRESPO,  RODRIGUEZ, RAMOS, MAISEL, DINOWITZ,
          SKOUFIS, ENGLEBRIGHT, MONTESANO, GIBSON, SCARBOROUGH, ROBERTS, GABRYS-
          ZAK, SANTABARBARA -- Multi-Sponsored by -- M. of A. ABINANTI,  ARROYO,
          BOYLAND,  BRAUNSTEIN,  BRENNAN,  CAMARA, COLTON, COOK, CROUCH, DUPREY,

          FINCH, GOTTFRIED, HEASTIE, HOOPER, MOSLEY, MOYA, PERRY, RIVERA, ROBIN-
          SON, ROSA, SCHIMEL, SEPULVEDA -- read once and referred to the Commit-
          tee on Consumer Affairs and Protection -- reported and referred to the
          Committee on Codes -- reported from committee,  advanced  to  a  third
          reading,  amended  and  ordered  reprinted, retaining its place on the
          order of third reading -- passed by  Assembly  and  delivered  to  the
          Senate,  recalled  from  the  Senate, vote reconsidered, bill amended,
          ordered reprinted, retaining its place on the order of third reading
 
        AN ACT to amend the general business law, in relation to the price goug-
          ing of medicine
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. The general business law is amended by adding a new section

     2  396-rrr to read as follows:
     3    §  396-rrr.  Price  gouging  of  medicine. 1. For the purposes of this
     4  section, "drug subject to a shortage" shall mean  any  drug  or  medical
     5  product  intended  for human use publicly reported as being subject to a
     6  shortage by the U.S.  food  and  drug  administration  on  its  website,
     7  provided,  however, that a drug or medical product shall only be consid-
     8  ered a "drug subject to a shortage" during the period of time that  such
     9  drug or medical product is listed as being subject to a shortage on such
    10  website.
    11    2.  No party within the chain of distribution of any drug subject to a
    12  shortage shall sell or offer to sell any such drug subject to a shortage

    13  for an amount which represents an unconscionably excessive price.
    14    3. Whether a price is unconscionably excessive is a  question  of  law
    15  for the court.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02559-06-3
        A. 3751--B                          2
 
     1    (a)  The  court's  determination  that a violation of this section has
     2  occurred shall be based on any of the following factors:
     3    (i) that the amount of the excess in price is unconscionably extreme;
     4    (ii)  that  there was an exercise of unfair leverage or unconscionable
     5  means; or

     6    (iii) a combination of both factors in subparagraphs (i) and  (ii)  of
     7  this paragraph.
     8    (b)  In  any proceeding commenced pursuant to subdivision four of this
     9  section, prima facie proof that a violation of this section has occurred
    10  shall include evidence that:
    11    (i) the amount charged represents a gross disparity between the  price
    12  of  the  drug  subject to a shortage which was the subject of the trans-
    13  action and their value measured by the price at which such drug was sold
    14  or offered for sale by the defendant in the  usual  course  of  business
    15  immediately prior to the onset of the shortage; and
    16    (ii)  the  amount charged grossly exceeded the price at which the same

    17  or similar drug subject to a shortage was readily  obtainable  by  other
    18  purchasers  in  the trade area. A defendant may rebut a prima facie case
    19  with evidence that additional  costs  not  within  the  control  of  the
    20  defendant were imposed on the defendant for the drug subject to a short-
    21  age.
    22    4.  Where a violation of this section is alleged to have occurred, the
    23  attorney general may apply in the name of the People of the State of New
    24  York to the supreme court within the judicial  district  in  which  such
    25  violations  are alleged to have occurred, on notice of five days, for an
    26  order enjoining or restraining commission or continuance of the  alleged
    27  unlawful  acts.  In  any such proceeding, the court shall impose a civil

    28  penalty in an amount not to exceed one  hundred  thousand  dollars  and,
    29  where appropriate, order restitution to aggrieved consumers.
    30    5.  Prior  to applying for an order from the supreme court pursuant to
    31  subdivision four of this section, the attorney general, in  consultation
    32  with  the  department  of  health,  shall  consider the pricing dynamics
    33  unique to the small and independent distributors within the supply chain
    34  including, but not limited to, the price charged by the end use  dispen-
    35  ser relative to its acquisition cost.
    36    § 2. This act shall take effect immediately.