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As I have mentioned before, the pharmaceutical industry is tempting fate with its exorbitant prices. As the prices of old drugs are raised as well as sky high prices on new drugs, insurers and government leaders are starting to move to hold prices down or force the companies to justify prices. Pharmaceutical lobbyists have had so much influence they have prevented the government from negotiating prices in the Medicare program. So, there is little expectation of action coming from Congressional legislation on that issue. The Senate Aging Committee led by Senator Susan Collins, (R- Maine) has held a number of hearings on drug prices and could come forward with some bills. The Obama Administration has tried to institute some rules on Medicare drug prices but those have being resisted.
The New York Times reported on Tuesday that , state legislators and citizen activists across the country are pushing campaigns to hold down prices through legislation as well as a major referendum on the ballot in California this fall. That initiative would restrict prices to no more than what the government pays for veterans though the Veterans Administration, prices which are lower than Medicaid and Medicare. The drug companies and their allied patient advocacy groups are mounting a major campaign to defeat the referendum.
Pharmaceutical companies have been able to rely on support from patient advocacy groups who argue they need the new, higher priced drugs for survival. The Times reported what is common knowledge, that the drug companies provide major funding to the patient and disease groups. However, the AARP (which does not receive pharmaceutical funding) is supporting the California referendum.
Meanwhile in other states including New York, legislation has been introduced to require transparency and notification on drug price increases. Some state legislation requires notification if drug prices rise by more than ten percent.
Here in New York State, Senators Kemp Hannon, Ruben Diaz and Liz Krueger have introduced legislation. The Diaz and Krueger bills would require greater disclosure and transparency regarding costs. None of these bills were acted on by the Senate Health committee this year.
Hannon’s bill , S7022, would prevent price gouging. The bill requires prior authorization for Medicaid if cost increases exceed 100% in a twelve month period. The text adds a statement about protecting the public interest:
The bill states that price gouging or "excessive price increases to prescription drugs that lack justification based on market forces" is a "public health risk" in the state and that "the legislature declares that the public interest requires that conduct be prohibited and subject to civil penalties."