Com­pa­nies fight ef­forts to rein in drug prices

The Charlotte Observer (Sunday) - - News - BY ROBERT PEAR New York Times

States around the coun­try are clamp­ing down on phar­ma­ceu­ti­cal com­pa­nies, forc­ing them to dis­close and jus­tify price in­creases, but the drug man­u­fac­tur­ers are fight­ing back, chal­leng­ing the state laws as a vi­o­la­tion of their con­sti­tu­tional rights.

Even more states are, for the first time, try­ing to reg­u­late mid­dle­men who play a cru­cial role by man­ag­ing drug ben­e­fits for em­ploy­ers and in­sur­ers, while tak­ing pay­ments from drug com­pa­nies in re­turn for giv­ing pref­er­en­tial treat­ment to their drugs.

The bi­par­ti­san ef­forts by states come as Pres­i­dent Don­ald Trump and his ad­min­is­tra­tion put pres­sure on drug com­pa­nies to freeze prices and re­duce out-of-pocket costs for con­sumers strug­gling to pay for drugs that of­ten cost thou­sands of dol­lars a month.

Twenty-four states have passed 37 bills this year to curb ris­ing pre­scrip­tion drug costs, ac­cord­ing to Tr­ish Ri­ley, the ex­ec­u­tive di­rec­tor of the Na­tional Academy for State Health Pol­icy, a non­par­ti­san fo­rum of pol­i­cy­mak­ers, and sev­eral state leg­is­la­tures are still in ses­sion.

The burst of state ac­tiv­ity on drug costs re­calls the way states acted on their own to pass laws to ex­pand health in­sur­ance cov­er­age in the years be­fore Con­gress passed the Af­ford­able Care Act in 2010.

“In the ab­sence of fed­eral ac­tion, states are tak­ing the lead in com­bat­ing high drug prices,” said state Rep. Sean Scan­lon of Con­necti­cut, a Demo­crat.

A bill passed unan­i­mously this year by the Con­necti­cut Gen­eral Assem­bly il­lus­trates a pop­u­lar tac­tic: States are shin­ing a spot­light on drug price in­creases as a first step to­ward con­trol­ling costs.

Un­der the Con­necti­cut law, drug com­pa­nies must jus­tify price in­creases for cer­tain drugs if the price rises by at least 20 per­cent in one year or 50 per­cent over three years. In­sur­ers must iden­tify their 25 high­est-cost drugs and the 25 with the great­est cost in­creases when they file their an­nual rate re­quests with the state In­sur­ance De­part­ment.

In ad­di­tion, the mid­dle­men, known as phar­macy ben­e­fit man­agers, must dis­close the amount of re­bates and other price con­ces­sions they re­ceive from drug com­pa­nies.

Repub­li­cans have their own rea­sons for con­cern.

“As state leg­is­la­tors, we are re­spon­si­ble for the wise stew­ard­ship of taxpayers’ money,” said state Rep. Norm Thurston of Utah, a Repub­li­can. “The state spends a lot of taxpayers’ money on pre­scrip­tion drugs, through Med­i­caid, cor­rec­tions and jails, state em­ploy­ees, higher ed­u­ca­tion em­ploy­ees and their de­pen­dents. We should be sure we’re get­ting the best deal.”

In re­sponse to a bill in­tro­duced by Thurston, the Utah Health De­part­ment is study­ing pos­si­ble ways to im­port pre­scrip­tion drugs from Canada, and he is work­ing with a Repub­li­can state sen­a­tor on a bill to re­quire the re­port­ing of price in­for­ma­tion by drug com­pa­nies.

Cal­i­for­nia has adopted a law re­quir­ing drug com­pa­nies to pro­vide ad­vance no­tice of price in­creases, to­gether with a de­tailed state­ment of the rea­sons for the in­creases. In ad­di­tion, in­sur­ers must file an­nual re­ports show­ing the per­cent­age of pre­mi­ums at­trib­ut­able to drug costs.

“Cal­i­for­ni­ans have a right to know why their med­i­ca­tion costs are out of con­trol, es­pe­cially when phar­ma­ceu­ti­cal prof­its are soar­ing,” Gov. Jerry Brown said.

Drug com­pa­nies have filed suit to block the Cal­i­for­nia law, which they de­scribe as “un­prece­dented and un­con­sti­tu­tional.”

The law “ex­ports Cal­i­for­nia’s pol­icy choices” to the rest of the coun­try and vi­o­lates the First Amend­ment by com­pelling drug man­u­fac­tur­ers to ex­plain their price in­creases, said the law­suit, filed by the Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica.

Rein­ing in drug costs is a top pri­or­ity for state of­fi­cials who run Med­i­caid, the health pro­gram that serves more than 70 mil­lion low-in­come peo­ple.


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