States Passing Laws to Address High Drug Prices in Battle with BIG PHARMA’s Market and Political Power

  • The New York Times reported last week that 24 states have passed 37 laws this year to address high drug costs.  Among the most prominent bills are those which require the companies to justify their costs, a move the companies say violates their freedom of speech.   States are also trying to regulate pharmacy benefit managers which can give preferential treatment for drugs if the companies pay them rebates.

  • Utah is exploring importing drugs from Canada.

  • Connecticut passed a law requiring justification of price increases above 20% in one year or 50% in three years.  California passed a law requiring advance notice of drug price increases with explanations for those increases.  The pharmaceutical industry is suing.

  • The generic drug industry sued Maryland which passed a price gouging law that was thrown out by a federal court after the generic drug industry sued the state.

  •   New York has a ceiling on Medicaid drug prices and can seek higher rebates or cuts in drug prices if the budget exceeds its ceiling.   The article says state officials claimed $60 million in savings were negotiations because costs were going to exceed the cap.

  • In one of the most creative and intriguing actions Oklahoma will only pay for new drugs if they produce a value in treatment.  The article quoted  Nancy Nesser, the state’s Medicaid pharmacy director, “If a drug claims to keep people out of the hospital and doesn’t, the manufacturer may be liable for the cost of the hospitalization.”