H. B. 4651
(By Delegates Staton and Browning)
(Introduced March 1, 1994; referred to the
Committee on the Judiciary.)
A BILL to amend chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article twenty-four, relating to prohibiting certain discriminatory pricing; treble damages and civil penalties.
Be it enacted by the Legislature of West Virginia:
That chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article twenty-four, to read as follows:
ARTICLE 24. DISCRIMINATORY PRICING.
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47-24-1. Definitions.
As used in this article:
(a) "Drug" means any substance subject to section 503 (b) (1) of the Federal Food, Drug and Cosmetic Act.
(b) "Manufacturer" means any person, other than a wholesaler, who trades in drugs for resale to purchasers or sale to consumers, either directly or through a wholesaler, in this state.
(c) "Purchaser" means any person who engages in selling or dispensing of drugs directly to a consumer.
(d) "Wholesaler" means any person, other than a manufacturer, who sells drugs to a purchaser.
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47-24-2. Price discrimination prohibited.
(a) Every manufacturer shall offer drugs to every wholesaler or purchaser it sells to with all rights and privileges offered or accorded by the manufacturer to the most favored purchaser or consumer, (1) including any transaction to which a manufacturer sells to a purchaser through a contractual arrangement implemented by one or more wholesalers and (2) including purchase prices for similar volume purchases. Every manufacturer shall offer rebates, free merchandise, samples and similar trade concessions on proportionally equal terms to every seller. Nothing in this subsection prohibits the giving of a discount that is justified by the economies or efficiencies realized by the manufacturer resulting from volume buying, including opportunities available to all sellers on equal terms to increase their volume buying through influencing physician prescribing practices or increasing their volume buying resulting from agreements to place drugs on a formulary; prompt payment; and prompt delivery, so long as such discount is made available to all sellers on equal terms. Any discount must be directly proportional to the economies and efficiencies realized by the manufacturer.
(b) No manufacturer shall provide discounts to any purchaser or wholesaler based on the class of trade to which the purchaser or seller belongs.
(c) This section shall apply to any purchase of drugs which shall be delivered to a purchaser or purchaser facility located in this state.
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47-24-3. Government purchases prohibited from violators;
ineligibility for participation in state program.
(a) No entity of the state government shall purchase any drug from a manufacturer who engages in price discrimination prohibited by this section. Agencies of government and political
subdivisions are not wholesalers or purchasers under this section, and manufacturers and wholesalers of drugs are not prohibited from according to them pricing or related arrangements which are not made available to other purchasers in this state.
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47-24-4. Right of recovery for treble damages.
(b) Any purchaser or wholesaler damaged by violation of this section 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.
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47-24-5. Civil penalty and enforcement.
Any person who violates this article or any rule promulgated under this article 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 nor more than one hundred thousand dollars per violation. The prosecuting attorney of any county in which such violation occurred may commence an action to enforce this section.
NOTE: The purpose of this bill is to prohibit discriminatory pricing by manufacturers of prescription drugs. The bill would allow volume discounts if they are cost-justified by any efficiencies or economies and made available to all customers on proportionally equal terms. The prohibition would be enforced by civil penalties and a ban on participation in government programs.