New York panel to review Vertex pricing in first test of new law

For the first time, a New York state panel will review a prescription drug over concerns it may cause the state Medicaid program to exceed a cap on drug spending. Such reviews were greenlighted under a law passed last year in a bid to control rising prices for medicines.

At issue is a cystic fibrosis drug called Orkambi, which is sold by Vertex Pharmaceuticals (VRTX). A drug utilization review board is scheduled to meet on April 26 and, depending upon the outcome, could recommend a supplemental rebate to lower the cost to the program.

By law, state Medicaid programs automatically get a 23.1 percent discount off the list price of a medicine. The Orkambi list price is $272,000, according to a Vertex spokeswoman. In addition, for every dollar a state spends on Medicaid, the state receives a certain percentage reimbursed by the federal government.

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