States Are Taking Action on Drug Prices. Here's A Quick List
Federal legislation on drug prices is advancing slowly. By contrast, many state legislators have proposed bills to control prescription drug prices and promote transparency in the drug market. Several states have already enacted such legislation. Here is a helpful list of some of the major laws and proposals, organized by state:
Connecticut: The Legislature just approved a law that bans two abusive PBM practices: gag clauses that prohibit pharmacies from disclosing relevant drug price information to consumers, and contract provisions that lead to consumers unknowingly paying higher out-of-pocket prices for prescription drugs than the drugs actually cost. It now heads to the Governor for his signature.
Maryland: At the end of the legislative session, the Legislature passed a drug pricing law intended to curb price gouging. It gives Maryland’s Attorney General the power to demand explanations from drug companies for unconscionable price increases for generic or off-patent drugs, and to administer fines.
New York: A new law sets an annual cap on Medicaid prescription drug spending. It aims to limit total payments to the sum of medical inflation plus 5%. If this is exceeded, it allows regulators to conduct a review that uses scientific studies and other information to determine if specific medications are overpriced in relation to their medical benefits.
Nevada just passed a bill, S.B. 539, that mandates transparency from both pharmaceutical companies and the middlemen in the drug pricing process known as pharmacy benefit managers (PBMs). PBMs are responsible for negotiating between pharmacies and insurance companies. The bill also requires that health care nonprofits disclose any contributions they receive from the pharmaceutical industry, PBMs and insurers. It was approved by the State Senate 19-2 and has been sent to the Governor’s desk; he stated he will be proud to sign it.
Vermont already has a transparency law. In 2016, the state passed a bill that required drug companies to provide justification for drug price hikes. And state officials had to report 15 drugs that had price increases of 15% in the past year, or 50% over the last five years.
And California has a number of bills that it is considering, including a bill requiring 90 days’ notice before a drug’s price can be increased.
We are encouraged by so many proposals, and hope that federal legislators will follow suit.