'More is possible': A bunch of states are taking on high drug prices, and it could start hitting drugmaker profits
U.S, Sen. Bernie Sanders (I-Vt.) expresses his support for Proposition 61 downtown Los Angeles, Monday, Nov. 7, 2016. The ballot initiative drawing the most spending on the November ballot would not affect the average Californian, but drug companies have a major stake and are spending heavily to defeat it. Proposition 61 would prohibit state agencies from paying more for prescription drugs than the U.S. Dept. of Veterans Affairs does in an effort to curb rising costs for taxpayers.APA number of states have proposed bills that take on the rising cost of drug pricing. And, unlike in the past, many are on track to becoming law.
The legislation at the state level, along with local, and national government actions, are latest attempts to change the way we spend money on prescription drugs.
It's gotten to the point where Wall Street is starting to take notice."These laws are now at the 'annoyance' level, rather than material commercial impact but presumably once a coalition gels at state level and reaps political rewards, more is possible," Bernstein analyst Ronny Gal wrote.
Here are the states that have either passed bills, or are in the process of passing legislation that could increase transparency around drug prices.
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Vermont already has a transparency law.
In 2016, Vermont passed a bill that required drugmakers to provide justification for drug price hikes. In a report, state officials also had to report 15 drugs that had price increases of 15% in the past year, or 50% over the last five years.
In response to the increases, the state can fine the drugmakers. Beyond that, the state doesn't have the power to cap or reduce the drugs' prices.
California has a number of bills on drug pricing and transparency.
California is taking a few different approaches to take on high drug prices. One, which limits drug companies' ability to give gifts to medical professionals, passed the state senate in May. It's now before the Assembly.
There are three other bills that have all passed on to the second house, including SB 17 which is getting under biotech executives' skin. The bill would require companies to disclose more information that the executives argue could undercut competition, including a 90-day notice of increases to a drug's price (similar to Nevada's bill).
Ohio wants to cap what state agencies pay for drugs.
A ballot measure in Ohio, titled the Ohio Drug Price Relief Act, aims to cap the amount the state's agencies pay for prescription drugs at the rate that the Department of Veteran Affairs pays.
It's similar to California Prop 61, the most expensive ballot measure of the November 2016 election. Currently, the VA gets a discount of about 24% off traditional drug prices, and the agency can negotiate further discounts on top of that.
The ballot measure will be part of Ohio's November election.
Nevada is confronting the price of diabetes drugs.
The bill, known as SB 265, passed the Senate on May 19 and the Assembly on May 25, after facing opposition from lobbyists and nonprofit patient groups that disagree with the bill's approach to reining in prescription drug spending.
As it stands, the bill aims to bring transparency to the way diabetes drugs are priced, including mandating that drugmakers notify state officials and insurance companies 90 days before raising the price of insulin. The bill also could make nonprofits disclose when they get funding from drug companies, as well as what they receive from middlemen including pharmacy benefit managers, and health insurers. It would also register pharmaceutical sales representatives and have them supply certain details about the conversations they have with healthcare providers.
But on Friday, Nevada Governor Brian Sandoval vetoed the bill, saying that before he supports a bill like this "there must be compelling evidence that the benefits are worth the risks," The Nevada Independent reported.
New York passed a bill that wants to 'hassle' drug companies.
A new law in New York wants to pester drug companies for more information regarding drug price hikes, specifically when Medicaid spending rises. According to Gal's note, it "smartly just 'hassles' drug companies for raising prices."
Maryland is tackling generic drug price hikes.
In May, Maryland passed a drug pricing law that aims to curb generic drug price hikes by allowing Medicaid to alert the attorney general if drugmakers raise the price of a drug by 50% or more in a year, which could result in a fine.
Maryland Governor Larry Hogan didn't veto the bill, but didn't sign it either.
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