In just the last few weeks, Tennessee and Connecticut joined the growing list of states to pass legislation banning the use of accumulator adjustment programs. As my colleague Erik explained earlier this month, manufacturers often provide cost sharing assistance programs to help patients afford certain high-cost specialty drugs. Insurers have in turn implemented “accumulator adjustment programs” that seek to reverse the impact of these programs by not counting the amounts provided by the manufacturer in calculating the patient’s annual out-of-pocket limit.… More
Category Archives: Legislative Developments
Three additional states enacted legislation in recent weeks barring the “accumulator adjustment program” cost sharing framework. Accumulator adjustment programs seek to reverse the impact of manufacturer cost sharing assistance for prescription drugs by not counting amounts offset by such assistance toward a patient’s deductible. This can result in high patient out-of-pocket responsibilities after the manufacturer’s cost sharing assistance has been exhausted. For this reason, both drug manufacturers and patient advocates have sought to bar accumulator adjustment programs on both the federal and state levels.… More
On January 27, 2021, Governor Baker of Massachusetts issued his FY 2022 Governor’s Budget. The budget legislation includes an anti-drug price increase measure that has previously been proposed by the Baker Administration on multiple occasions. Under the legislation, drug manufacturers “who establish an excessive price [meaning WAC] for any such drug directly or in cooperation with a related party, shall pay a per unit penalty on all units of the drug ultimately dispensed or administered in the commonwealth.”
Whether a drug price is excessive is determined by relation to the drug’s “reference price.” A drug’s “reference price” is the WAC of the drug on the later of January 1,… More
During the summer of 2019, a number of states enacted new drug price transparency laws, swelling the number of states with such laws to 11. Colorado, Maine, Maryland, Texas, and Washington joined California, Connecticut, Louisiana, Nevada, and Oregon with transparency laws. Oregon also supplemented its transparency laws with an advance notice requirement for certain price increases.
On July 31, 2019, Governor Charles Baker signed a law designed to increase supplemental rebates for prescription drugs in the Massachusetts Medicaid program (MassHealth). This law follows on a somewhat similar law enacted in New York in 2017.
Under the new Massachusetts law, the state’s Executive Office of Health and Human Services (EOHHS) can propose and negotiate for supplemental rebates for covered outpatient drugs directly with pharmaceutical manufacturers under an exemption to the Massachusetts public procurement law. … More
On May 7, 2019, the Ways and Means Committee of the Massachusetts Senate reported its final budget (S.4), which includes within it authority for the Commonwealth’s Executive Office of Health and Human Services (“HHS”) to directly negotiate supplemental rebates with drug manufacturers for covered drugs on behalf of the Massachusetts Medicaid program, MassHealth. The operative language appears in outside sections 4 and 39 of the budget and is substantially similar to drug rebate language initially appearing in the Governor’s FY20 budget.… More
On April 11, 2019, the Massachusetts House Committee on Ways and Means released its FY 2020 budget (H.3800). The legislation includes provisions authorizing MassHealth (the Massachusetts Medicaid program) to negotiate supplemental rebates directly with drug manufacturers, and provides for further proceedings before the Health Policy Commission for manufacturers refusing to negotiate supplemental rebates at levels satisfactory to the Commonwealth. These provisions represent amendments to a MassHealth drug pricing proposal included in Governor Baker’s FY 2020 filing in January.… More
On October 9, California Governor Jerry Brown signed SB 17, legislation mandating advance notice and price transparency reporting for drugs experiencing greater than 16% increases in WAC over three calendar years and new drugs introduced at a WAC above the Medicare Part D specialty drug threshold. The legislation will take effect January 1, 2018, although the reporting requirements to the Office of Statewide Health Planning and Development will begin in the first quarter of 2019.… More
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,… More
We recently wrote about the newly enacted Nevada drug price transparency law here. The law requires manufacturers of prescription diabetes drugs to disclose certain drug cost information to the state Department of Health and Human Services (“Department”). In addition, the law imposes several unique reporting requirements on non-profit patient advocacy groups and pharmaceutical sales representatives. We expected that these reporting requirements would garner some attention and,… More
California’s drug price transparency legislation, SB 17, passed the State Assembly on September 11 by a vote of 66-9. The bill included several amendments to the version of the bill that passed the State Senate at the end of May. The State Senate then passed the amended legislation on September 13. Among the most important amendments were changes to “triggers” for price reporting, and for advance notice requirements relative to WAC increases.… More
Three pieces of Massachusetts pharmaceutical pricing legislation are set for a hearing before the legislature’s Joint Committee on Healthcare Financing at 11:00 AM on July 11. S. 652, sponsored by Sen. Mark Montigny, would impose strict reporting requirements on manufacturers of covered drugs, while empowering the state Health Policy Commission (HPC) to annually identify drugs with prices “excessively higher than justified,” and authorizing the Attorney General to bring consumer protection actions against manufacturers charging such prices. … More
Nevada Governor Brian Sandoval recently signed into law a drug price transparency bill, SB 539. The law primarily concerns price transparency measures for prescription diabetes drugs, but also imposes reporting requirements on nonprofit patient advocacy groups and pharmaceutical sales representatives that we’ve yet to see enacted in any other state.
First, the law requires nonprofit patient advocacy groups to annually compile a report disclosing any payment,… More
On June 13, Sen. Ron Wyden (D-OR) introduced price transparency legislation that has similarities to the many state bills that have been introduced on the issue in recent years. S. 1348, entitled the Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act of 2017, would impose price reporting requirements on drugs that, per dose 1) have a WAC of at least $10 and have experienced a 100% 12-month WAC increase;… More
Two drug price transparency measures were signed Wednesday by Louisiana Governor John Bel Edwards after passing both houses of the legislature unanimously. HB 436 passed the Senate on June 2 after having passed the House May 24. This bill would require manufacturers engaging in marketing of prescription drugs in Louisiana to report quarterly to the Louisiana Board of Pharmacy the current WAC prices for those drugs.
California’s latest effort at a drug price transparency bill, SB 17, moved one step closer to becoming law on Tuesday when it passed the State Senate 26-10. The legislation, sponsored by Sen. Ed Hernandez, would require the manufacturers of prescription drugs experiencing large increases in WAC to give purchasers 90 days’ advance notice of the increase, and report detailed information to the state Office of Statewide Health Planning and Development (OSHPD). … More
HB 631, Maryland’s first-in-the-nation “price gouging” bill, will become law without the signature of Governor Larry Hogan (R). In a letter to Maryland Speaker of the House Michael Busch (D), Hogan stated that he would not sign the legislation due to concerns that it could violate the “dormant” application of the Commerce Clause of the U.S. Constitution. However, Hogan declined to veto the legislation,… More
Transparency Legislation Targeting Drug Manufacturers and Health Plans in California Senate Appropriations Committee
One of the more aggressive pieces of price transparency legislation introduced this year is currently before the Appropriations Committee in the California State Senate. Under SB17, manufacturers of drugs that have experienced three-year increases in WAC greater than either 10% (for drugs with WAC over the Medicare Part D specialty drug threshold) or 25% (for drugs with WAC under the threshold) would be required to give 90 days’ advance notice of the increase to purchasers (including state purchasers,… More
The end of the legislative session in Olympia on April 23 did not see the enactment of what had once been among the fastest-moving pieces of drug pricing transparency legislation in the country. After passing the House of Representatives in a close 52-46 vote, HB 1541 was unable to escape from the Senate Committee on Health Care.
HB 1541 would have required manufacturers of prescription drugs that increase in price by 1) the lesser of 10% or $10,000 over a 12-month period;… More
In a lopsided 137 to 2 vote on April 10, 2017, the Maryland House of Delegates passed HB 631, which outlaws “price gouging” by manufacturers and wholesale distributors of certain “essential off-patent or generic drugs.” Price gouging is defined as “an unconscionable increase in the price of a prescription drug.”
The legislation applies to drugs for which exclusive marketing rights have expired,… More
On Thursday, April 20, the Governor Andrew Cuomo signed into law New York’s 2017-18 budget. The budget adds a new section 280 to the New York Public Health Law which requires the Commissioner of Health to set an aggregate Medicaid drug spending growth threshold for 2017 and 2018, and allows the Commissioner to refer drugs to the Drug Utilization Review Board for pricing reviews when the state is projected to exceed the threshold. … More