STATE OF NEW YORK
________________________________________________________________________
5860--B
2021-2022 Regular Sessions
IN ASSEMBLY
March 1, 2021
___________
Introduced by M. of A. REYES, WILLIAMS -- read once and referred to the
Committee on Consumer Affairs and Protection -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee -- recommitted to the Committee on Consumer Affairs and
Protection in accordance with Assembly Rule 3, sec. 2 -- reported and
referred to the Committee on Codes -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
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 manufacturer, supplier, wholesaler, distributor or retail seller
12 of any drug subject to a shortage shall sell or offer to sell any such
13 drug subject to a shortage for an amount which represents an unconscion-
14 ably excessive price.
15 3. Whether a price is unconscionably excessive is a question of law
16 for the court.
17 (a) The court's determination that a violation of this section has
18 occurred shall be based on any of the following factors:
19 (i) that the amount of the excess in price is unconscionably extreme;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06581-04-2
A. 5860--B 2
1 (ii) that there was an exercise of unfair leverage or unconscionable
2 means; or
3 (iii) a combination of both factors in subparagraphs (i) and (ii) of
4 this paragraph.
5 (b) In any proceeding commenced pursuant to subdivision four of this
6 section, prima facie proof that a violation of this section has occurred
7 shall include evidence that:
8 (i) the amount charged represents a gross disparity between the price
9 of the drug subject to a shortage which was the subject of the trans-
10 action and their value measured by the price at which such drug was sold
11 or offered for sale by the defendant in the usual course of business
12 immediately prior to the onset of the shortage; or
13 (ii) the amount charged grossly exceeded the price at which the same
14 or similar drug subject to a shortage was readily obtainable by other
15 purchasers in the trade area.
16 (c) A defendant may rebut a prima facie case with evidence that:
17 (i) the increase in the amount charged preserves the margin of profit
18 that the defendant received for the same drug subject to a shortage
19 prior to the onset of the shortage; or
20 (ii) additional costs not within the control of the defendant were
21 imposed on the defendant for the drug subject to a shortage.
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 violation is 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 twenty-five thousand dollars per
29 violation or three times the gross receipts for the relevant drug
30 subject to the shortage, whichever is greater, and where appropriate,
31 order restitution to aggrieved parties.
32 § 2. This act shall take effect immediately.
