‘More is possible’: A bunch of states are taking on high drug prices, and it could start hitting drugmaker profits
A 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.
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.
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.
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."
Nevada is confronting the price of diabetes drugs.
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.
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 threeotherbills 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).
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.
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