Read the full stored bill text
SB1797 - 572R - I Ver
REFERENCE TITLE:
essential drugs; price increases; limits.
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SB 1797
Introduced by
Senators
Sears: Bravo, Fernandez, Miranda, Ortiz, Sundareshan
AN
ACT
amending title 36, Arizona Revised
Statutes, by adding chapter 43; relating to prescription drugs.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 36, Arizona Revised Statutes,
is amended by adding chapter 42, to read:
CHAPTER 42
PRESCRIPTION DRUGS
ARTICLE 1. PRICING
START_STATUTE
36-4301.
Definitions
In this article, unless the context otherwise
requires:
1. "Essential off-patent
or generic drug":
(
a
) Means any
prescription drug that meets all of the following:
(
i
) All
exclusive marketing rights, if any, granted under the federal food, drug, and
cosmetic act, section 351 of the federal public health service act, and federal
patent law have expired.
(
ii
) Either
appears on the model list of essential medicines most recently adopted by the
world health organization or has been designated by the secretary of the United
States department of health and human services as an essential medicine due to
its efficacy in treating a life-threatening health condition or a chronic
health condition that substantially impairs an individual's ability to engage
in activities of daily living.
(
iii
) Is
actively manufactured and marketed for sale in the United States by three or
fewer manufacturers.
(
iv
) Is made
available for sale in this state.
(
b
) Includes
any drug-device combination product used to deliver a drug for which all
exclusive marketing rights, if any, granted under the federal food, drug, and
cosmetic act, section 351 of the federal public health service act, and federal
patent law have expired.
2. "Price gouging" means an
unconscionable increase in the price of a prescription drug.
3. "State medical assistance
program" means the Arizona health care cost containment system established
by chapter 29 of this title.
4. "Unconscionable
increase" means an increase in the price of a prescription drug that both:
(
a
) Is
excessive and not justified by the cost of producing the prescription drug or
the cost of appropriate expansion of access to the prescription drug to promote
public health.
(
b
) Results in
consumers for whom the prescription drug has been prescribed having no
meaningful choice about whether to purchase the prescription drug at an
excessive price because of the importance of the prescription drug to the
consumer's health and insufficient competition in the market for the
prescription drug.
5. "Wholesale acquisition
cost" has the same meaning prescribed in 42 United States code section
1395
w
�3
a
.
END_STATUTE
START_STATUTE
36-4302.
Manufacturers; wholesale distributors; price gouging prohibited
A. A
manufacturer or wholesale distributor may not engage in price gouging in the
sale of an essential off-patent or generic drug.
B. It is not a violation of
subsection A of this section for a wholesale distributor to increase the price
of an essential off-patent or generic drug if the price increase is
directly attributable to additional costs for the essential off-patent or
generic drug imposed on the wholesale distributor by the manufacturer of the
essential off-patent or generic drug.
END_STATUTE
START_STATUTE
36-4303.
Attorney general; information required; enforcement actions;
civil penalty; confidentiality
A. The state medical assistance
program may notify the attorney general of any increase in the price of an
essential off-patent or generic drug if both of the following apply:
1. The price increase, by itself or
in combination with other price increases, would result in an increase of at
least fifty percent in either:
(
a
) The
wholesale acquisition cost of the essential off-patent or generic drug
within the preceding one-year period.
(
b
) The price
paid by the state medical assistance program for the essential off-patent
or generic drug within the preceding one-year period.
2. One of the following applies:
(
a
) A thirty-day
supply of the maximum recommended dosage of the essential off-patent or
generic drug for any indication, according to the label for the essential off-patent
or generic drug approved under the federal food, drug, and cosmetic act, would
cost more than $80 at the essential off-patent or generic drug's
wholesale acquisition cost.
(
b
) A full
course of treatment with the essential off-patent or generic drug,
according to the label for the essential off-patent or generic drug
approved under the federal food, drug, and cosmetic act, would cost more than
$80 at the essential off-patent or generic drug's wholesale acquisition
cost.
(
c
) The
essential off-patent or generic drug is made available to consumers only
in quantities that do not correspond to a thirty-day supply, a full
course of treatment or a single dose and would cost more than $80 at the
essential off-patent or generic drug's wholesale acquisition cost to
obtain a thirty�day supply or a full course of treatment.
B. On request of the attorney
general, the manufacturer of an essential off-patent or generic drug
identified in a notice under subsection A of this section, within forty-five
days after the request, shall submit a statement to the attorney general that
does all of the following:
1. Itemizes the components of the
cost of producing the essential off-patent or generic drug and identifies
the circumstances and timing of any increase in materials or manufacturing
costs that caused any increase in the price of the essential off-patent
or generic drug within the one-year period preceding the date of the
price increase.
2. Identifies the circumstances and
timing of any expenditures made by the manufacturer to expand access to the
essential off-patent or generic drug and explains any improvement in
public health associated with those expenditures.
3. Provides any other information
that the manufacturer believes to be relevant to determining whether a
violation of this article has occurred.
C. The attorney general may require a
manufacturer or a wholesale distributor of an essential off-patent or
generic drug to produce any records or other documents that may be relevant to
a determination of whether a violation of this article has occurred.
D. On petition of the attorney
general and subject to subsection E of this section, a superior court may issue
an order:
1. Compelling a manufacturer or a
wholesale distributor of an essential off-patent or generic drug to
provide the statement required under subsection B of this section and to
produce specific records or other documents requested by the attorney general
under subsection C of this section that may be relevant to determining whether
a violation of this article has occurred.
2. Restraining or enjoining a
violation of this article.
3. Restoring to any consumer,
including a third-party payor, any monies acquired as a result of a price
increase that violates this article.
4. Requiring a manufacturer that has
engaged in price gouging in the sale of an essential off-patent or
generic drug to make the essential off-patent or generic drug available
to participants in the state medical assistance program for a period of up to
one year at the price at which the essential off-patent or generic drug
was made available to participants immediately before the manufacturer's
violation of this article.
5. Imposing a civil penalty of up to
$10,000 for each violation of this article.
E. The attorney general may not bring
an action for a remedy under subsection D, paragraph 2, 3, 4 or 5 of this
section unless the attorney general has provided the manufacturer or wholesale
distributor of an essential off-patent or generic drug with an
opportunity to meet with the attorney general to offer a justification for the
increase in the price of the essential off-patent or generic drug.
F. Any
information provided by a manufacturer or a wholesale distributor of an
essential off-patent or generic drug to the attorney general under
subsections B and C of this section is considered confidential commercial
information unless the confidentiality of the information is waived by the
manufacturer or wholesale distributor.
G. In any action brought by the
attorney general under subsection D of this section, a person who is alleged to
have violated a requirement of this article may not assert as a defense that
the person did not deal directly with a consumer residing in this state.
END_STATUTE