States Are Taking Aggressive Steps To Lower Drug Prices By Regulating Drug Companies and PBMs

The House of Representatives and the Senate are both considering measures to lower prescription drug costs, and bills are working their way through various committees. Yet advocates should not lose sight of another important area-state governments. In 2019, states are taking more aggressive actions than ever before to reduce drug costs, by regulating both drug companies and pharmacy benefit managers (PBMs).

Both of these actors have been pointing fingers at each other, attempting to deflect blame. And both of them are right! Drug companies set the prices and can increase them without consequences, but PBMs push up drug prices as well because they make more profits. But this year state legislators are taking a broader view of why prescription costs are so high, and they are attempting to reform the whole system.

Hundreds of bills have been introduced in over forty one states. In Maryland, Governor Larry Hogan is considering whether to sign a bill creating a Prescription Drug Affordability Board that would set maximum prices that the state government would pay for prescription drugs. In Montana, Governor Steve Bullock is also debating whether to sign SB 71, which would indirectly regulate PBMs and require rebates to be passed on to consumers. Similar bills to regulate PBMs have been introduced in Maine, Minnesota, and Ohio.

Since January, California has required drug companies to give at least sixty days' notice before they can raise drug prices. Ohio's Attorney General Dave Yost is suing the PBM OptumRx for fraud, and reports from Pennsylvania and Michigan show that PBMs overcharged taxpayers in those states as well. And Florida is going to become the second state after Vermont to allow importation of more affordable prescription drugs from Canada.

These are also excellent reforms-other states should follow suit and pass laws to reduce drug costs and ensure drug companies and PBMs keep prices affordable. And members of Congress should not hesitate to learn from state legislative efforts.