Feature

States pass record number of laws to reel in drug prices


 

Whether Congress will act this year to address the affordability of prescription drugs – a high priority among voters – remains uncertain. But states aren’t waiting.

So far this year, 33 states have enacted a record 51 laws to address drug prices, affordability, and access. That tops the previous record of 45 laws enacted in 28 states set just last year, according to the National Academy for State Health Policy, a nonprofit advocacy group that develops model legislation and promotes such laws.

Among the new measures are those that authorize importing prescription drugs, screen for excessive price increases by drug companies, and establish oversight boards to set the prices states will pay for drugs.

“Legislative activity in this area is escalating,” said Trish Riley, NASHP’s executive director. “This year, some states moved to launch programs that directly impact what they and consumers pay for high-cost drugs.”

And more laws could be coming before year’s end. Of the handful of states still in legislative session – including California, Massachusetts, Michigan, New Jersey, Ohio, and Pennsylvania – debate continues on dozens of prescription drug bills. In New Jersey alone, some 20 proposed laws are under consideration.

“Both Democrat and Republican leaders have shown a willingness to pursue strong measures that help consumers but also protect state taxpayer dollars,” said Hemi Tewarson, director of the National Governors Association’s health programs.

Ms. Riley, Ms. Tewarson, and others note, however, that states can go only so far in addressing rising drug prices, and that federal legislation would be necessary to have a major effect on the way the marketplace works.

Federal lawmakers are keeping a close eye on the state initiatives, Ms. Tewarson said, to gauge where legislative compromise may lie – even as Congress debates more than a dozen bills that target drug costs.

The pharmaceutical industry has opposed most – though not all – state bills, said Priscilla VanderVeer, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, the industry’s main trade group.

“We agree that what consumers now pay for drugs out-of-pocket is a serious problem,” said Ms. VanderVeer. “Many states have passed bills that look good on paper but that we don’t believe will save consumers money.”

Limiting gag rules for pharmacists

At least 16 states have enacted 20 laws governing the behavior of pharmacy benefit managers. The so-called PBMs serve as middlemen among drugmakers, insurance companies, and pharmacies, largely with pharmaceutical industry support.

Those laws add to the 28 passed in 2018. Most of the new laws ban “gag clauses” that some PBMs impose on pharmacists. The clauses, written into pharmacy contracts, stop pharmacists from discussing with customers whether a drug’s cash price would be lower than its out-of-pocket cost under insurance.

With widespread public outrage over gag clauses pushing states to act, federal lawmakers got the message. In October, Congress passed a federal law banning such clauses in PBM-pharmacy contracts nationwide and under the Medicare Part D prescription drug benefit. The Senate passed it 98-2. Even so, many of this year’s PBM laws contain additional gag clause limitations that go beyond the 2018 federal law.

Next Article: