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James Shehan, JD: State Efforts to Address Drug Costs


James Shehan, JD, chair of regulatory practice at Lowenstein Sandler, LLP, discusses state laws targeting drug prices.


In efforts to address drug costs, some US states have passed legislation attempting to rein in drug prices. What are some of the common features of these laws?

When we talk about the states in contrast to the Congress, states have actually done an awful lot over the last 5-10 years on drug pricing, and it’s an accelerating trend. By one count, almost all of the states had some kind of proposals that they were considering last year [2017] and a number of them have been enacted.

I actually recently did an analysis where I counted 11 different categories, and we put out a client alert about it, 11 different categories of state actions on drug pricing. Everything from, kind of transparency-type rules where, if a product’s price is increased, it has to be reviewed by the state and potentially approved, to approval of importation from non—US jurisdictions, to repeal of “gag” rules where you walk in and the pharmacy has to tell you the cash price versus the price if you use your insurance, studies of drug pricing.

Many different experiments, if you will, where the states are taking a creative approach and in a lot of cases are actually enacting things. Now, some of these efforts are not without legal challenges. Some have already been successful, Maryland had a price-gouging bill that was struck down by the first court that heard it, and there will be others like that, but I think we are going to continue to see the states being very active in this area and having an impact.

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