State Efforts Lead the Fight Against High Drug Prices

The year began with President Trump’s accusations that pharmaceutical developers were “getting away with murder,” expectations that an executive order on drug pricing was imminent, and calls from stakeholder groups for the government to use such legislation as the Bayh-Dole Act to force drug makers to bring down high prescription drug costs. However, efforts to reduce drug prices appear to have stalled at the federal level as the major focus of congressional activity turned toward healthcare reform.

While the FDA appears to be taking a more active role in leveraging its position to influence drug prices, the majority of remaining efforts to bring down pharmaceutical costs are taking place at the state level. These state legislative efforts, as BioPharma Dive points out, tend to be aimed at narrow goals—including restricting the tactics of pharmacy benefit mangers (PBMs), tracking increased drug prices, and empowering states to impose penalties on entities that flout regulation—rather than seeking comprehensive reform.

The National Academy for State Health Policy (NASHP), a non-profit, non-partisan academy of state health policymakers, reports the following successful 2017 drug pricing initiatives:

• Georgia passed SB 103, a bill which, among other provisions, bans the PBM practice of prohibiting pharmacists or pharmacies from providing patients with information on the amount of the patient’s share of drug costs or the efficacy of a lower-priced alternative drug. The law took effect on July 1.
• North Carolina passed S 384 in July. A law much like Georgia’s SB 103, North Carolina’s legislation additionally requires that PBMs’ contracts with insurers be made available for review by the state.
• Connecticut passed SB 445, which allows pharmacists to disclose information about less expensive medications to consumers. It also prohibits PBMs from requiring consumers to pay more than their copayment amounts, allowable claim amounts, or list prices of the drugs. The bill also authorizes the state’s insurance commissioner to audit pharmacy services’ contracts for compliance. The law was signed by the governor in July.
• Texas’ SB 1076, which takes effect on September 1, is similar to Connecticut’s law; this bill prohibits insurance plans from requiring consumers to pay more than their copays, claim amounts, or the list price of the drug.
• Florida’s HB 589, which became effective on June 9, requires the state’s Agency for Health Care Administration to collect data on retail prices for the 300 most frequently prescribed drugs in the state along with a list of prices for comparable generics.
• Louisiana passed SB 59, which took effect in June. The law commits the state’s Board of Pharmacy to the development of a website that will make drug pricing information available to providers.
• Maryland passed SB 415, which allows the state’s attorney general to require a drug manufacturer to produce records concerning drug price increases and to ask the circuit courts to impose penalties for excessive increases in price. The bill became law in May, when Governor Larry Hogan chose neither to sign nor veto the legislation, which he claimed did not go far enough to address drug and device costs.
• Nevada passed SB 539, which requires the state’s HHS to compile a list of prescription drugs targeting diabetes, and requires manufacturers and PBMs to disclose information concerning diabetes drugs to the state. It also passed SB 91, which authorizes the donation of prescriptions drugs. (Tennessee passed a similar drug donation act, SB 429.)
• New York’s SB 2007B, which has been signed by the state’s governor, empowers the state to request supplemental rebates for drugs based on their costs to the Medicaid program, which is determined by Medicaid’s spending on the drug, price increases for a particular product, or price disproportionate to therapeutic benefits.

A number of other states have bills currently in committee. Those pending efforts include a California bill that would allow for greater regulation of PBMs, an Illinois bill that would require drug makers to notify purchasers of increases in drug prices 60 days prior to the increase, a New Jersey bill that would authorize the state’s attorney general to negotiate discounts for opioid antidotes on behalf of public entities, and Pennsylvania’s effort to establish a Pharmaceutical Transparency Commission to investigate the reasonability of retail drug prices.