State Drug Price Transparency Legislation: What to Watch for This Fall

After a slow-down during the summer recesses, action on the drug price transparency front is beginning to increase as we enter the fall season.  Here are a few states to watch in the coming months:


California’s price transparency legislation, SB 17, passed the legislature on September 13, and now goes to Governor Jerry Brown for his signature.  The legislation had passed the Senate by a 28-10 vote on May 30, and the Assembly passed an amended version of the legislation on September 11, with the Senate concurring in the amendments two days later.  As amended, this legislation would require a manufacturer of a drug with a WAC of more than $40 per course of therapy to provide 60 days’ advance notice to state and other purchasers where the drug sees a WAC increase in excess of 16% cumulatively over the current calendar year and the previous two.  The legislation also imposes reporting requirements for these and certain newly introduced drugs to the California Office of Statewide Health Planning and Development.  More detail on this legislation can be found here and here.


A number of potentially noteworthy bills remain alive in the Massachusetts General Court.  S.652 would impose reporting requirements on covered drugs and authorize the Attorney General to bring consumer protection suits against manufacturers charging “excessive” prices.  S.627 would impose strict transparency requirements for prescription drugs with an increase in “average manufacturer price” of 10% or more over a 12-month period, or the introduction of a new drug at a price that may cause the state to exceed the benchmark for health cost increases.  A third piece of legislation, H.2983, would prohibit state agencies and entities from purchasing a prescription drug at a higher net cost than the Department of Veterans’ Affairs.  The Joint Committee on Health Care Financing held hearings on these bills on July 11.


An Ohio ballot initiative would enact a new Section 194.01 of the Ohio Revised Code.  This initiative – which is similar to H.2983 in Massachusetts – would prohibit Ohio, its state agencies and entities, and all programs where the state or its agencies or entities are the ultimate payer, from entering into an agreement with a drug manufacturer to purchase a drug at a net cost higher than that paid by the Department of Veterans’ Affairs.  This initiative, which will be on the ballot this November, will likely find itself at the center of a high-profile political campaign both for and against.  The traditionally low turnout in an odd-year election may be a wild card in determining the outcome.

Watch this space for updates on these issues and other state legislation.

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