California is among a group of states that have taken drug prices into their own hands, with lawmakers last year passing a bill aimed at shining new light on the pricing process. Now, the state is starting to see early results.
Documents obtained by Politico show that Valeant Pharmaceuticals plans a 63% price hike on a generic glaucoma drug, while Teva Pharmaceutical Industries plans a 49% price increase for an inhaled asthma drug at the start of May. While it’s unclear whether the warnings will do much to control overall drug costs, state officials hope pricing disclosures can stir up pressure against big hikes.
California passed its transparency bill back in October despite pushback from the pharma industry. It requires health insurers to disclose certain costs and forces pharmaceutical manufacturers to give advance warning of their price hikes. Drugmakers must also justify large price increases. Certain pricing information will be published on a government website.
At the time, a spokeswoman for industry trade group PhRMA said the bill was “based on misleading rhetoric instead of what’s in the best interest of patients.” The organization has sued to stop the bill’s implementation.
The state also passed a law that targets the branded drug industry’s copay coupons. That bill, signed by Gov. Brown the same day as the pricing transparency act, limits the use of coupons when cheaper generics are available.
As the situation plays out in California, Michigan is considering a proposal that would force drugmakers to disclose manufacturing and marketing costs for expensive medications, according to MiBiz.com; the bill is in a state health policy committee. Massachusetts and Arizona are asking for more power to manage drugs in their Medicaid programs.
All the state-level legislation represents a new risk for the drug industry as pricing reform continues to command broad public support, and as lawmakers in Washington, D.C., haven’t advanced any major proposals on the issue. More than half of the U.S. public believes drug pricing is a “top priority,” according to a new Kaiser Family Foundation Poll.
State lawmakers around the country are considering 51 bills focused on drug price transparency, 12 on price gouging and dozens more on a range of topics, according to the National Academy for State Health Policy. Maryland, Nevada and Oregon have each passed bills that focus on different aspects of the drug industry and supply chain.
At the federal level, President Donald Trump and HHS secretary Alex Azar said at a recent speech the administration’s pricing plan is coming in “about a month.”