State legislatures are battling against high drug prices, tired of inaction from the federal government.
Last year, states passed more than double the number of laws attacking high drug prices than in 2016, and legislatures show no signs of stopping.
States approved 14 laws in 2017 targeting high drug prices through price transparency, compared to four in 2016, according to data from consulting firm PricewaterhouseCoopers Health Research Institute. State legislatures introduced 45 drug pricing transparency bills in 2017, compared to 38 in 2016.
Ten states introduced bills aimed at putting price controls on expensive drugs, with three of the bills passing and two pending. The remaining five bills failed. In 2016, nine price control bills were introduced but none passed, PricewaterhouseCoopers found.
The states that passed price control laws were Maryland, New York, and Vermont.
Experts say the trend won't let up this year, as Connecticut, Michigan, Oregon, Washington, and New Jersey are pursuing pricing transparency bills.
“I would tend to think that we are going to see more of these in 2018, just as more state legislators become aware of them and as we start to see [the laws] take effect,” said Alec Gaffney, senior manager for pharmaceuticals and new entrants for PricewaterhouseCoopers Health Research Institute.
The drive by the states has come as Congress doesn't show great interest in tackling high drug prices beyond speeding up approvals of generic drugs to compete with pricier brand name products. States are grappling with high prescription drug spending, as the U.S. spent $457 billion on prescription drugs in 2015, according to a 2016 report from the Department of Health and Human Services.
The policies states passed last year varied from mandating drugmakers give rebates to capping out-of-pocket costs for specialty drugs that tend to be more expensive.
For instance, the District of Columbia passed a law that prohibits public and private insurers from setting out-of-pocket costs such as a co-pay for specialty drugs at more than $150 for a 30-day supply or $300 for a 90-day supply, according to a report from Pew Charitable Trusts.
Other laws have targeted price transparency in an effort to "name and shame" drugmakers for high prices. For instance, California now requires each drug manufacturer and wholesaler to notify purchasers of price hikes and must submit quarterly reports to states to justify any increases, Pew said.
Some states took unique approaches to price controls. New York included a provision in its 2018 budget that lets state officials set an annual projected spending target for prescription drugs under its Medicaid program.
“It creates very specific annual savings targets,” said Ian Reynolds, manager of Pew’s drug spending and research initiative.
But a major question is how effective these programs will be, since brand name drugmakers can still set high prices. “These companies are still subject to patent protections and market exclusivity protections,” Gaffney said.
The pharmaceutical industry has been out in force to try to prevent the bills from going into law. Drugmakers spent more than $150 million to defeat price control ballot measures in California in 2016 and Ohio in 2017.
NBC News pointed to IRS filings that show the industry’s main lobbying group made donations to hundreds of legislative candidates and political action committees.
“The policy environment is challenging across the board, including in the states," said Priscilla Vanderveer, spokeswoman for main lobbying group Pharmaceutical Manufacturers and Researchers of America. "We have been and will continue to work with state policymakers to drive real solutions for our complex healthcare system using a holistic approach to address patient affordability challenges."
Gaffney said the state laws could spur the drug industry to lobby for federal legislation that would preempt the patchwork legislation. As it stands now, companies will be forced to meet different requirements depending on the state instead of only one from the federal government.
“There is some precedent for pharma companies going to the federal level and saying we know this is going to happen and we want it to happen on a more friendly playing field,” he said.
Gaffney pointed to a 2013 federal law that mandates electronic tracking on drug shipments. California had passed a law in 2010 that forced drugmakers to install serialization numbers for drug products.
To head off that law from going into effect, the pharmaceutical industry lobbied Congress to create a federal tracking system.
Congress is at odds over how far to go on fighting high drug prices. Lawmakers have passed some laws that spur development of cheaper generic drugs to compete with pricey brand name products. But other Democratic-led reforms such as giving Medicare the power to negotiate for lower drug prices have gone nowhere.
President Trump has at times scolded drug companies for “getting away with murder” over high drug prices.
The president’s budget proposal set to be released Monday is expected to include several policies aimed at reducing out-of-pocket spending, according to a report in Bloomberg Friday. New Health and Human Services Secretary Alex Azar told reporters that some proposals include establishing a spending cap on drug costs and possibly making generics free for low-income seniors, Bloomberg said.
The White House’s Council of Economic Advisers also released a report on Friday that offered recommendations on how to spur innovation in the drug industry while still lowering prices. Recommendations include speeding up drug approvals, making generic drugs far cheaper for people on Medicare, and making changes to trade policy since countries from overseas pay less than the U.S. for prescription drugs.