The bill would require the companies to alert the market about price increases for any drug that sees a price rise of at least 10 percent or $10,000 a year. Price hikes for generics would need to be reported for increases of 25 percent or more a year.
Insurance companies would be required to report data on drug prices to state regulators, highlighting the portion of premiums attributed to pharmaceuticals.
Proponents of the bill believe the advance notice will give government, insurers and pharmacy benefit managers the opportunity to negotiate price.
Drugmakers counter that the system could create drug shortages and create a distorted view of drug pricing.
The legislation cleared the Senate and is now up for deliberation in the Assembly.
More articles on the drug market:
Drug monitoring programs show reduction in opioid overdoses: 6 things to know
GAO: Fewer new drug shortages, while ongoing shortages remain steady
Humira to face competition from biosimilars
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