while drug manufactures have made billions of dollars in profits. these are tax dollars going to our schools and making our neighborhood safe. but unfortunately even our residents that have good coverage are spending this money on medications. there are a lot of complicated issues that under lie why drug pricing is so high. there are a couple things that i would like to note that i have certainly explored with city staff on this issue. we have very little transparency on the prices set not only with drugs but also prices paid by the city and county of san francisco. some of the out patients are eligible to receive a low price negotiated by the federal government in the so-called 340 b program.

unfortunately it's not accessible to in patients that we have in our local hospitals as well as our jails. i would also note that our city purchases many of our drugs for our inpatient populations and others with a contract through a company called innovation. unfortunately the pricing for those particular drugs are covered by non-disclosure agreement and we don't have the ability to understand how those prices are set. the resolution is asking for four things. it asks the department of public health to use consumer websites to provide comparisons for drugs in san francisco and asks for the drug pricing through all inpatient settings federal legislative agenda for this year. we also state that the

board of supervisors will increase transparency in pricing for health care and prescription drugs and also a firms our city supports for pharmaceutical prices and rate setting process. i want to take a moment to thank all the advocacy organizations and our residents that have been disproportionately affected by the rising cost. starting with the leadership and the disability action work and the san francisco labor council and many others. these are organizations that are really bringing this issue to our attention and are working with us closely to move things forward. i would like to invite up from the department of public health david woods who is the pharmacy director who can discuss some of these issues from dph's point of

view and then open up to public comment. mr. woods thank you for your work with our office and with the community. >> good morning, i'm david wootsdz from the department of public health. to reduce the price of prescription drugs is an important goal and one that is significant for the city of san francisco. with the passages of proposition d residents have expressed their opinion and with this has started a public health issue that is impacting many of our citizens. this resolution states the federal legislative body that san francisco support the national policy change which increases the profile of this issue. the department of public health is to protect and promote the health of all city san franciscans. this message is

enlightenment. the city and county of san francisco already does many things to ensure we get the low prices for medication. for example the group purchasing organization from hundreds of manufactures. the department also makes the use of the special drug pricing program 340 b drug program which allows the clinics and hospitals to purchase outpatient drugs at deeply discounted rates. the dph in turn provides free drug access to low income, uninsured and under in insured patients through the drug program, but

under through the level could this be changed. this resolution is far more reaching and will reach other populations in san francisco where there is the need. for example, some persons have to make large out of pocket copayment to get medications or fight with their drug plan to get the medication they need. they are required to provide high prices which is notable for some notifications. for example, some new medications which are considered breakthroughs which treat illnesses like hepatitis c can cost $1200 per pill. the cost is still very high for treatment. medication prices are not transparent to consumers as supervisor chiu has said. in cases with high

co-payments and large out of pocket cost for medications, pharmacies may charge a different price for medication. oftentimes it's difficult for consumers to shop around. many don't realize they can shop around for medication. they just need to know how. since transparency for consumers, websites are useful for sf residents purchasing outpatient drugs. some websites can help persons to locate lower prices for medication and generic and cost saving tips. the resolution recognizes the value of the 340 b program to benefits that it benefits the most and patients in

hospitals that care for low income persons and no matter what their level of insurance would allow the department and other safety hospitals to further serve city san franciscans even better. they share a cost for these persons. this program is only for outpatient. the advocacy that will serve will be a great benefit by an allowing the great service to customers and great programs that will improve care. >>president david chiu: i have a couple of questions for the public. can you tell us what drugs come under this

program? >> about 1/3 of our program. >> this program allows us to get from others. the bottom line is we are paying through one part of our system for lower prices because they are negotiated through the federal government but two parts of our drugs we purchase don't have that same level of lower prices. >> right. we use the organization to negotiate prices for the groups and it only applies to outpatient. >> on the drug purchasing that we do through innovation, my understanding is that the city and you are under agreement not to discuss the pricing? >> if i were to disclose somebody's price then the supplier might not be able to negotiate with me in the future. >> i understand that. from

the city's perspective, we as policy makers we can't compare them to know what other low prices are in other parts of the country. >> correct, the prices we pay. as far as the prices to consumers, those are public. >> right. could i ask our city attorney, are you familiar, i know we were supposed to have a deputy city attorney here to answer questions on this topic. could you tell us what restrictions we have as policy makers. oh, you are here. my apology. we are wondering why we can't get a little transparency on this pricing. the organization has negotiated with the city that these prices need to be kept secret and can only be negotiated with a handful of our city staffers such as there is no transparency with

anyone nor the public. can you help us understand what that entails. >> i will attempt to. i'm here on behalf of the city attorneys office. good morning supervisors. actually it was this board that passed this section of the administrative code section 15.104 which authorizes dph to enter into an agreement with basically a cooperative united health care systems that then in turn contracts with innovation to do the negotiations. now, in the very language of that administrative code section dp h is required to agree to united health -- uhc's terms

and conditions. so it was a measure passed by the board. obviously the board could revisit that language. i think as dave woods indicated on behalf of dph that if certain pieces and information are made public, we definitely would lose our ability to leverage better prices. even prime vendors would be reluctant to act on our behalf because of another locality could point to san francisco as being able to acquire a certain price and a certain

drug and manufacturers would start to back out of negotiations. so it's something again that the board could look at. bus there are disadvantages. >> when was that code? >> i believe 1997. >> do you know if our predecessors were aware of the implications of not being able to view the prices? >> i don't know. i can look into it. >> from my standpoint, it seems a bit kofkaist that the industry is essentially saying that we will negotiate with city governments but only do that if a handful of bureaucrats and city staffers do this with zero scrutiny and i understand that they might say to us that if you are

unwilling to an abide by secrecy and trade confidentiality agreement but that affects our public transparency law and to have competitive pricing. that's what i'm grappling with. i certainly understand if there are many cities that do this we would be concerned about getting cut out but it's in the interest of all the organizations that are negotiating with the government cities to have more transparency. if you have any thoughts on that? >> i understand the concern. i think we often need to identify the slice of pharmaceuticals that we would be looking at so we essentially only the supreme court ruled in after san

santa clara can move the pricing from the manufactures to the price. now we are looking at the inpatient piece. of that piece you have a number of drugs that are protected on patent. so those drugs are protected. other companies claim they have proprietary rates as to the drugs. i don't have an immediate suggestion other than other than what we can do.

this is an evolving area because there is certainly rocketing cost of prescription medications is that dph can explore what organizations exist in vendors that perhaps don't have quite so stringent terms in their agreements. >> which i think is a very interesting possible next step. it occurred to me that if our department of public health reached out to department of public health's of other major cities and we all collectively asked for a little bit more transparency there might be some movement that could be helpful so it's not just san francisco. that's one idea. another observation

i would have is the issue of pricing in the area of hospital cost that for many many years was incredibly untransparent and this past year the obama administration released hospital pricing throughout the country and it was a water shed moment where hospitals can compare prices and consumers of health care can compare prices. the federal government hasn't done that in terms of pharmaceuticals but in our outpatient cost we have lower prices than other areas and two-thirds of the other inflated cost and try to get what we think of the fairist cost for residents that just can't afford the drugs that we are talking about. but, i look forward to working with your office as well as the department of public health in moving this forward.

>> i would follow that up. that is action at the state level would be equally helpful in terms of requiring greater transparency. >> i understand that our state senator mark leno offered sb 746 to offer lower drug prices. unfortunately that was a bill vetoed by the governor. we are all here trying to figure out what to do in san francisco to move things forward. this you for your work. colleagues, at this time unless you have any other questions, i would like to open it up to public comment. i know we have a fair number of public comment cards. let me call up the following individuals who submitted cards. jessie brooks, daniel ramos, bates, michael lion,

duke, kelly and those are the cards that i have at the moment. if you want to step up, you have two minutes.2 minutes. thank you for your leadership on this. >> thank you for having this conversation. my name is dale glutsdz and bay area regional foundation and we were the major funder for prop b and dealing with the hiv epidemic and i'm very aware of life savings medication. i met a lot of people with other health conditions such as cancer, heart disease and diabetes who also struggle to afford medication. these people are all races and financial means. a city that struggles to remain affordable, lower cost to medications is crucial. thank

you. >> next speaker? >> good morning supervisors. my name is daniel ramos and i work with aids foundation as a pharmacy representative and pharmacy case manager. as a professional in the health industry i have worked in the bay area for 10 years here in the san francisco and east bay helping people find ways to afford medications that they need to survive, life saving therapies. my current role as a pharmacy representative and pharmacy case manager i see firsthand to some medications that cost pennies to make are sold at staggering high prices. for those with top insurance plans, a typical medication maybe only a few dollars, but those who are uninsured, the exact same drugs could cost thousands of dollars per month. we

mentioned earlier mr. woods mentioned the new oral hepatitis c therapy, $1200 per pill and the treatment is about 3 months. it's the newest probably one of the most effective course to hepatitis c as we know it bus also one of the most expensive anti-retro viral therapies that hit the market. many insurances are not covering it at this point and definitely medi-cal and medicare are not covering it whatsoever. the point being is that pharmaceutical cost, lowered cost would increase access to people who cannot afford it. there is really nothing worst than seeing a patient struggle from buying life saving medication to other items such as food and clothing. this resolution is a smart way to

address an issue that is being ignored at the state and federal level. drug manufactures have made sure there is no limit. >> thank you. next speaker. >> good afternoon, i'm reverend daniel. city of oakland church. i would like to say thank you for passing this measure and this you to the entire san francisco area and community. it's imperative that we get this medication and everybody's medication that needs them that can't afford them. few people may know it but i have tested positive for hiv in september of 1988. along with a diagnosed i was given a life expectancy for 11 years. had it not been for the grass roots organization to provide medicine to me. i wouldn't be

here today as things trickle down budget wise it does work and does matter. there is nothing more disheartening that you can get help and get to the doctors and they say your medicine is not on our list. we can't give it to you. it's discouraging and at the same i want to say thank you and god bless you for all that you are doing for us. it definitely working. never think it's going in vein. it's definitely working. i have seen many things in my life that i would not have seen were it not for your efforts. >> next speaker. >> thank you for putting forward this resolution on drug pricing. it's just a reflection of the outrageous profits of the drug companies and this whole aspect of secrecy is a tribute to the free market system. i'm

michael lion and worked at san francisco hospital for 15 years and i want to give a historical for why these issues are so important particularly with dph. in 2000 dph closed one of it's pharmacies in san francisco and patients had to wait in line for 5 hours. there is a major take back where san francisco pharmacy would continue to stay open. dph would contract for the non-for profit benefits manager and the pharmacy oversight committee was set up and i was on that committee. by april 1, 2003, we concluding that providing community pharmacy services has cost the city approximately $3.5 million

more per year than it should have for the last three 1/2 years. it included about $1 million more in fees in service management fees and $2.5 million for the drugs themselves. this was because the city was unable or unwilling to abide by 340 b regulations that are necessary to have the program. to give you an idea of how important this was is by 2005 dph was charging patients above the poverty line $5 for each generic and $10 for each brand name drug and they were thinking of doing this for below -- >> thank you very much. next speaker.

>> good morning supervisors. i have been politically active since i was a child and my concern was for the populations that are left out of many of the things that this country prospered on into war, after the war and things going on back then that were not able to afford the medications necessary to keep them going especially diabetics. the legislation

that prop d brought forth i thought was a marvelous thing for the city to be doing because of the population involved who have extraordinary needs for prescription drugs and simply cannot afford them whether or not they are insured. many times the insurance co-pays are tremendously costly and and various companies say you can't get our drugs because your insurance doesn't cover this particular drug and you have to get another type of drug and that doesn't work. i would hope that this legislation goes forward. i noted specifically the last next to the last further resolved you mentioned transparency and pricing for health care and prescriptions. they need to go hand in hand starting with the prescriptions. the health case

-- care issue is tremendous. >> thank you. i want to call up a couple more folks. if there are any other individuals who wish to speak on this topic, please lineup. ms. kelly. >> hi there. my name is kelly. i take drugs. i take drugs to help me walk. i take drugs to help me with my blood pressure. and when i see farma do you agree is helping to raise my blood pressure. because there is a difference between being ridiculously rich and very rich. and without transparency drug makers become ridiculously rich and our people become at

risk, ridiculously at risk. i'm very proud for san francisco voting 80 percent for proposition d. many of san franciscans can afford, but we stand here to tell you, we want everybody to be able to have drugs. we believe that you can work on this. the transparency is a very difficult thing and we learned about that today. i believe that we can work on ways to making a transparent what the markup is on drugs and what we can bargain for. i used to work in a jewelry shop and pawnshop and i know that the only thing that has a higher markup than jewelry and luggage is drugs. maybe i should have sold drugs. i

didn't. i believe that you have to help our seniors, you have to help our poor, you have to help our homeless. you have to help our immigrants, and you have to help people like me get the drugs they need to survive. >> thank you. >> good morning supervisors. my name is lee. i spend thousands of dollars or asthma medication. the reason is we can't just have one inhaler or one neb lieser. it's his

life, it's children's life. these fair pricing is crucial because of the skyrocketing cost. i'm going to kaiser to spend $200 on a breathing treatment. working class people can't pay this and they are struggling and they shouldn't have to choose between paying medication and someone's life. san francisco has always stood up for families and this resolution supports this type of family to help the families and make a difference in their life and no one has to choose from their health and their lives and this will help make life affordable. thank you. >> thank you. next speaker. >> hello, supervisors. my name is jessie