States Enact Drug Pricing Laws as Congressional Measures Stall

August 03, 2018

Twenty states have enacted 37 laws this year to address the rising cost of prescription drugs, but despite over 200 bills being introduced in Congress—some with bipartisan bicameral support—and a number of hearings on the issue, it is unlikely any federal legislation will be enacted this year.

Issues addressed by states this year include:

  • Pharmacy benefit managers: 22 states enacted PBM legislation that defined new standards for PBM business practices including laws that limit or ban gag clauses that prohibit pharmacists from sharing lower-cost drug options with consumers and increased fiduciary, regulatory and licensure requirements.

  • Price transparency:  Five states enacted laws to increase transparency, including requiring drug manufacturers to provide additional data justifying price increases over specified thresholds.

  • Anti-price-gouging:  Maryland enacted the nation’s first anti-price-gouging law to address excessive price increases and give the state the power to seek civil penalties and fines for price increases over certain thresholds.  The law is being challenged in federal court.

  • Wholesale drug importation from Canada: In 2018, eight states introduced wholesale drug importation legislation, and Vermont became the first state in the nation to enact a law authorizing wholesale drug purchasing from Canada.  However, Vermont must obtain approval from HHS before implementing the program.

Why it matters:  State-by-state enactment of laws to address drug pricing transparency and rising costs could eventually lead to the pharmacy supply chain demanding federal legislation to preempt the increasing maze of state laws.