Pills in bottle Federal lawmakersare keeping a close eye on the state initiatives, to gauge wherelegislative compromise may lie — even as Congress debates more thana dozen bills that target drug costs.

|

Whether Congress will act this year to address the affordabilityof prescription drugs — a high priority among voters — remains uncertain. But statesaren't waiting.

|

So far this year, 33 states have enacted a record51 laws to address drug prices, affordability and access. Thattops the previous record of 45 laws enacted in 28 states set justlast year, according to the National Academy for State HealthPolicy, a nonprofit advocacy group that develops model legislation andpromotes such laws.

|

Related: As states target drug costs, Big Pharma targetsstates

|

Among the new measures are those that authorize importingprescription drugs, screen for excessive price increases by drugcompanies and establish oversight boards to set the prices stateswill pay for drugs.

|

"Legislative activity in this area is escalating," said Trish Riley, NASHP's executivedirector. "This year, some states moved to launch programs thatdirectly impact what they and consumers pay for high-costdrugs."

|

And more laws could be coming before year's end. Of the handfulof states still in legislative session — including California,Massachusetts, Michigan, New Jersey, Ohio and Pennsylvania — debatecontinues on dozens of prescription drug bills. In New Jerseyalone, some 20 proposed laws are under consideration.

|

"Both Democrat and Republican leaders have shown a willingnessto pursue strong measures that help consumers but also protectstate taxpayer dollars," said HemiTewarson, director of the National Governors Association'shealth programs.

|

Riley, Tewarson and others note, however, that states can goonly so far in addressing rising drug prices, and that federallegislation would be necessary to have a major impact on the waythe marketplace works.

|

Federal lawmakers are keeping a close eye on the stateinitiatives, Tewarson said, to gauge where legislative compromisemay lie — even as Congress debates more than a dozen bills thattarget drug costs. Political divisiveness, a packed congressionalschedule and a looming election year could stall momentum at thefederal level.

|

The pharmaceutical industry has opposed most — though not all —state bills, said PriscillaVanderVeer, a spokeswoman for the Pharmaceutical Research andManufacturers of America, the industry's main trade group.

|

"We agree that what consumers now pay for drugs out-of-pocket isa serious problem," said VanderVeer. "Many states have passed billsthat look good on paper but that we don't believe will saveconsumers money."

Limiting gag rules for pharmacists

At least 16 states have enacted 20 laws governing the behaviorof pharmacy benefit managers. The so-called PBMs serve as middlemenamong drugmakers, insurance companies and pharmacies, largely withpharmaceutical industry support.

|

Those laws add to the 28 passed in 2018. Most of the new lawsban "gag clauses" that some PBMs impose on pharmacists. Theclauses, written into pharmacy contracts, stop pharmacists fromdiscussing with customers whether a drug's cash price would belower than its out-of-pocket cost under insurance.

|

With widespread public outrage over gag clauses pushing statesto act, federal lawmakers got the message. In October, Congresspassed a federal law banning such clauses in PBM-pharmacy contractsnationwide 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 gagclause limitations that go beyond the 2018 federal law.

Importing cheaper drugs

Four states — Colorado, Florida, Maine and Vermont — this yearhave enacted measures to establish programs to import cheaperprescription drugs from Canada and, in Florida's case, potentiallyother countries. Six other states are considering suchlegislation.

|

Medicines in Canada and other countries are less expensivebecause those nations negotiate directly with drugmakers to setprices.

|

"This is an area where states once feared to tread," said JaneHorvath, a consultant who has advised Maryland and Oregon, amongother states, on prescription drug policy. "Now both Republicansand Democrats view it as a way to infuse more price competitioninto the marketplace."

|

Hurdles remain, however. A 2003 law allows states to importcheaper drugs from Canada but only if the federal Health and HumanServices Department approves a state's plan and certifies itssafety. Between 2004 and 2009, the federal government haltednascent drug import efforts in five states.

|

Even so, momentum for importation has built in recent years instates and Congress as drug prices have continued to rise. And theTrump administration this summer threw its support behind theidea.

|

Florida Gov. Ron DeSantis, a Republican and close ally ofPresident Donald Trump's, signed his state's measure into law onJune 11, claiming he did so after Trump personally promised him theWhite House would back the initiative.

|

On July 31, HHS announced an "action plan" to "lay thefoundation for safe importation of certain prescription drugs." Theplan includes a process to authorize state initiatives. It alsorequires formal regulatory review, including establishing Food andDrug Administration safety criteria. That process could take up totwo years.

|

Two big problems remain: In the weeks since the announcement,the Canadian government has opposed any plan that would rely solelyon Canada as a source of imported drugs. The pharmaceuticalindustry also opposes the plan.

Creating drug affordability boards

Maryland and Maine enacted laws this year that establish stateagencies to review the costs of drugs and take action against thosewhose price increases exceed a certain threshold.

|

New Jersey and Massachusetts are debating similar legislationthis year.

|

Maryland's law establishes a five-member board to review thelist prices and costs of drugs purchased by the state andMaryland's county and local governments. The board will probe drugsthat increase in price by $3,000 or more per year and new medicinesthat enter the market costing $30,000 or more per year or over thecourse of treatment.

|

If approved by future legislation, upper payment limits on drugswith excessive price increases or annual costs would take effect inJanuary 2022.

|

"My constituents have signaled loud and clear that bringing drugprices down is one of their top priorities," said state Sen.Katherine Klausmeier, a Democrat representing Baltimore, whosponsored the legislation.

|

Maine's law also establishes a five-member board. Beginning in2021, the board will set annual spending targets for drugspurchased by the state and local governments.

Increasing price transparency

This year, four states — Colorado, Oregon, Texas and Washington— became the latest to enact laws requiring drug companies toprovide information to states and consumers on the list prices ofdrugs and planned price increases.

|

The majority of states now have such transparency laws, and mostpost the data on public websites. The details vary, but all stateswith such laws seek to identify drugs with price increases above10 percent or more a year, and drugs with price increasesabove set dollar values.

|

Oregon's new law, for example, requires manufacturers to notifythe state 60 days in advance of any planned increase of 10 percentor more in the price of brand-name drugs, and any25 percent or greater increase in the price of genericdrugs.

|

"That 60-days' notice was very important to us," said Rep.AndreaSalinas, chair of the Oregon House's health committee, whorepresents Lake Oswego. "It gives doctors and patients advancenotice and a chance to adjust and consider what to do."

|

Kaiser Health News isa nonprofit news service covering health issues. It is aneditorially independent program of the Kaiser Family Foundation,which is not affiliated with Kaiser Permanente.

|

Read more: 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.