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States Stepping into the Breach on Drug-Pricing Transparency | Lexology

In recent months President Trump, Food and Drug Administration Commissioner Scott Gottlieb, and Health and Human Services Secretary Alex Azar have all spoken publicly about the need to lower prescription drug prices and make the pricing models used by the nation’s drug manufacturers more transparent to consumers.  While at the federal level there has been talk, many States have begun to take active measures, proposing a number of laws designed to either lower drug prices, make pricing more transparent, or both. Legislators in more than 30 States proposed bills on drug pricing during their legislative sessions in 2017.

Each State, however, has its own take on the problem.  Several recent transparency and pricing laws are summarized below.

California: In the fall of 2017, California Governor Jerry Brown signed into law SB 17 and a companion bill, AB 265, both designed to regulate drug prices in the State starting in 2019. SB 17 requires health insurers to disclose the costs of certain drugs and requires drug makers to explain, and justify, price increases above a threshold of 16% when combined with increases from the previous two years.  AB 265 limits the use of copay coupons and other discounting strategies for branded prescription drugs in situations where cheaper generics are available. SB 17 is currently under legal challenge by PhRMA, a trade industry group that represents some of the world’s largest drug makers. PhRMA has filed similar suits in Maryland and Nevada, which enacted similar laws in 2017.

Florida: House Bill 351 does away with so called “gag clauses” in which insurance and drug companies prohibited pharmacists from being able to mention if patients could get medications at a lower price, namely by purchasing generic versions of name brand drugs. Effective July 1, 2018, pharmacists are required to inform customers of generic equivalents to their prescribed medications and whether any co-pays would actually exceed the cost of the generic. The bill also requires pharmacy benefit managers (PBMs) to register with the State.

New Jersey: New Jersey already maintains a drug price registry of the 150 most frequently prescribed prescription drugs. In January 2018, however, the State began to tackle the issue of PBMs and the role they play in drug pricing with the signing of S-3185/A-4676.

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States Stepping into the Breach on Drug-Pricing Transparency – Lexology.

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