Like a legislative game of whack-a-mole, lawmakers in yet another state are pushing a pair of bills that would force drug makers to reveal their costs. Although similar efforts have either failed or stalled in 10 other states, Virginia is now the latest venue where legislators hope a law will provide some transparency into the drug pricing process.
Companion bills were introduced in the Virginia House and Senate last month to require drug makers to provide detailed information for each medicine sold with a wholesale cost of $10,000 or more for a single course of treatment. This would include costs for R&D, manufacturing and marketing, as well as price changes, profits, and financial assistance for consumers. Data would appear on a public website.
The move reflects growing frustration with the rising cost of pharmaceuticals across the nation. About three-quarters of the American public believe the prices of brand-name medicines are unreasonable, while 26 percent expressed that view about generics, according to a recent poll by STAT and the Harvard T.H. Chan School of Public Health.
In the absence of action at the federal level, however, more state officials are trying to take matters into their own hands.
In Massachusetts, the attorney general has threatened to sue Gilead Sciences (GILD) for violating consumer protection law if the drug maker fails to lower prices for its hepatitis C treatments. And New York Governor Andrew Cuomo included a provision in his budget that would effectively cap prices and require drug makers to provide much of the same information sought in the Virginia bills.
“There’s very little if anything that can be done about large price increases. We’re seeing this with a number of other drugs, and we need more people to understand unfettered pricing power these companies have,” said Doug Gray, who heads the Virginia Association of Health Plans. “The bills were introduced to have a conversation, and this conversation will not end because drugs cost too much.”
Not surprisingly, the pharmaceutical industry is gearing up to defeat the legislation.
A spokeswoman for the Pharmaceutical Research and Manufacturers of America, the industry trade group, sent us a statement saying the Virginia legislation “imposes burdensome, duplicative and costly new reporting requirements.” And she argued that bills fail to account for the cost of failed drug development efforts and does not account for the value that medicines bring to the health care system.
She also cast blame on insurers. Drug makers have regularly argued that health plans disproportionately contribute to rising drug costs, because they are offered rebates and discounts on pharmaceuticals, but have been raising deductibles and out-of-pocket costs to consumers.
So far, the pharmaceutical industry has largely succeeded in keeping such legislation at bay. Although the trade group acknowledged that bills are active in several states, including Massachusetts, none have made any progress. Last month, meanwhile, a California bill was pulled from committee for the second time, and last year, a bill in Oregon was defeated.
Whether Virginia will prove to be an exception is unclear. But despite the inability to pass legislation in other states, more lawmakers continue to introduce these types of bills. And this is just one more indication that the frustration over prescription drug costs is unlikely to abate and that the pharmaceutical industry can expect to encounter more such efforts for the foreseeable future.