{"id":22316,"date":"2021-04-02T15:21:29","date_gmt":"2021-04-02T19:21:29","guid":{"rendered":"https:\/\/avalere.com\/?p=22316"},"modified":"2024-05-21T14:10:17","modified_gmt":"2024-05-21T18:10:17","slug":"2021-state-drug-pricing-legislation-the-evolution-beyond-transparency","status":"publish","type":"post","link":"https:\/\/advisory.avalerehealth.com\/insights\/2021-state-drug-pricing-legislation-the-evolution-beyond-transparency","title":{"rendered":"2021 State Drug Pricing Legislation: The Evolution Beyond Transparency"},"content":{"rendered":"<div class=\"wpb-content-wrapper\">[vc_row][vc_column][vc_column_text]\n<h2>Prior State Legislative Activity<\/h2>\n<p>Twenty-two states have enacted drug pricing laws since 2016. Many of these laws aim to increase drug price transparency through reporting and notification requirements, such as by requiring manufacturers to provide specific pricing information to the state or other entities (e.g., health plans).<\/p>\n<p>Notably, some state transparency laws have been subject to litigation. For instance, in 2018, the 4th US Circuit Court of Appeals\u00a0<a href=\"http:\/\/www.ca4.uscourts.gov\/opinions\/172166.P.pdf\">ruled<\/a> that Maryland\u2019s <a href=\"https:\/\/govt.westlaw.com\/mdc\/Document\/N229453E0729111E7BEF098E29B5A7DDA?viewType=FullText&amp;originationContext=documenttoc&amp;transitionType=CategoryPageItem&amp;contextData=(sc.Default)\">drug pricing law<\/a> passed in 2017, which was the first of its kind, was unconstitutional. The law would have prohibited a manufacturer or wholesale distributor from engaging in \u201cprice gouging,\u201d defined as an \u201cunconscionable increase\u201d in the price of a prescription drug in the original bill, in the sale of an essential generic drug. The appeals court found the law to be unconstitutional because it \u201cdirectly regulates the price of transactions that occur outside Maryland.\u201d Maryland has continued to pursue transparency efforts, enacting the first-in-nation drug affordability review board in 2019.<\/p>\n<h2>Current Legislative Activity<\/h2>\n<p>While states continue to consider price transparency initiatives, state legislatures have debated in 2021 new types of drug pricing bills that move beyond manufacturer reporting requirements and more towards directly controlling or limiting prices. In particular, at least 14 states are considering a form of \u201cprice control\u201d legislation so far in 2021. The provisions in these bills include, but are not limited to:<\/p>\n<ul>\n<li>Imposing fines on manufacturers that have \u201cunsupported price increases\u201d\u2014defined by states as increasing drug prices beyond a set inflation rate or beyond an increase threshold determined through value assessments; or<\/li>\n<li>Benchmarking drug prices in the state against referenced prices from other countries (e.g., Canada)<\/li>\n<\/ul>\n<p>Similarly, states are evolving the role of drug price affordability review boards to have a more active role in price setting by including new provisions, such as:<\/p>\n<ul>\n<li>Establishing an upper payment limit<sup>1<\/sup> that could enable a review board to fine manufacturers that exceed the limit set by the review board<\/li>\n<li>Requiring manufacturers to pay an annual assessment fee to the review board<\/li>\n<\/ul>\n<p>Recent prescription drug price transparency and cost-focused legislation fall into the following categories, including through a combination of related\u00a0drug pricing\u00a0initiatives:[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=&#8221;22317&#8243; add_caption=&#8221;yes&#8221; css=&#8221;.vc_custom_1617894279509{margin-top: 50px !important;margin-bottom: 20px !important;}&#8221; img_caption=&#8221;Figure 1. Recent Prescription Drug Price Transparency and Cost-Focused Legislation&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]\n<h2>Looking Ahead<\/h2>\n<p>Both Republicans and Democrats have signaled that drug pricing is a priority at the state and federal levels. Federal proposals have been mirrored across multiple state legislatures this year (e.g., reference pricing and value-based pricing assessments). Given the substantial state legislative activity so far in 2021, it is likely additional states will enact new laws related to drug pricing and transparency this year. At the same time, states continue to grapple with addressing healthcare costs and increased state budget deficits amidst the COVID-19 pandemic, which could factor into the likelihood of these and other health-related proposals advancing.<\/p>\n<p>To learn more about how we track and analyze emerging state issues, check out <a href=\"https:\/\/advisory.avalerehealth.com\/products\/state-policy-360\">State Policy 360<sup>TM<\/sup><\/a>. Stay ahead of emerging state policy activity. Monitor what\u2019s important for your business across all 50 states and DC, and see major trends in Medicaid waivers, drug benefit management, prescription drug pricing, and individual market changes.<\/p>\n<p>For more on drug pricing trends and news,\u00a0<a href=\"https:\/\/pages.avalere.com\/Insights.html\">connect with us<\/a>.<\/p>\n<h2>Notes<\/h2>\n<ol>\n<li>Not in reference to Upper Payment Limits in Medicaid.<\/li>\n<\/ol>\n[\/vc_column_text][\/vc_column][\/vc_row]\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_column_text] Prior State Legislative Activity Twenty-two states have enacted drug pricing laws since 2016. Many of these laws aim to increase drug price transparency through reporting and notification requirements, such as by requiring manufacturers to provide specific pricing information to the state or other entities (e.g., health plans). Notably, some state transparency laws have been&hellip;<\/p>\n","protected":false},"author":1,"featured_media":10423,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[993],"content-categories":[129],"class_list":["post-22316","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights","tag-archive","content-categories-drug-pricing","entry","has-media"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>2021 State Drug Pricing Legislation: The Evolution Beyond Transparency | Avalere Health Advisory<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/advisory.avalerehealth.com\/insights\/2021-state-drug-pricing-legislation-the-evolution-beyond-transparency\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2021 State Drug Pricing Legislation: The Evolution Beyond Transparency | Avalere Health Advisory\" \/>\n<meta property=\"og:description\" content=\"[vc_row][vc_column][vc_column_text] Prior State Legislative Activity Twenty-two states have enacted drug pricing laws since 2016. 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Many of these laws aim to increase drug price transparency through reporting and notification requirements, such as by requiring manufacturers to provide specific pricing information to the state or other entities (e.g., health plans). Notably, some state transparency laws have been&hellip;","og_url":"https:\/\/advisory.avalerehealth.com\/insights\/2021-state-drug-pricing-legislation-the-evolution-beyond-transparency","og_site_name":"Avalere Health Advisory","article_published_time":"2021-04-02T19:21:29+00:00","article_modified_time":"2024-05-21T18:10:17+00:00","og_image":[{"width":570,"height":388,"url":"https:\/\/advisory.avalerehealth.com\/wp-content\/uploads\/2018\/08\/Insight_6.20.2018_Real-World-Evidence_Is-it-a-Game-Changer-for-the-FDA_570x388.jpg","type":"image\/jpeg"}],"author":"avalere_wp","twitter_card":"summary_large_image","twitter_creator":"@avalerehealth","twitter_site":"@avalerehealth","twitter_misc":{"Written by":"avalere_wp","Est. reading time":"3 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