An Overview of 36 State Laws Passed This Year to Control Pharmaceutical Costs

The vast majority of the laws are directed towards pharmacy benefits managers (PBMs). Most prohibit PBMs from placing limits on pharmacists providing information about costs of a drug.

The following is a fairly representative description of the laws that prevent PBMs from imposing limits on what pharmacists can share about pricing, “... Prohibits a pharmacy benefits manager from prohibiting or penalizing a pharmacist or pharmacy for providing cost sharing information on the amount a covered individual may pay for a particular prescription drug.”

Many of the other laws related to PBMs(but not all) are related to licensing requirements for PBMs.

Other categories of laws dealing with drug cost control include drug substitution, pricing transparency.

Vermont passed a bill that will facilitate drug importation from Canada.  Before any import program could become active, federal law stipulates that the Secretary of the U.S. Department of Health and Human Services (HHS), which oversees the FDA, would have to certify that the program is safe and results in significant cost savings to consumers.

A Kentucky law  requires PBMs that contract with a managed care organization providing Medicaid benefits to provide extensive reporting on costs, reimbursement, dispensing fees, etc.

Oregon's transparency law is similar to some other state transparency laws that have been the subject of legal challenges. The law requires manufacturers submit extensive reports for any drug with a wholesale acquisition cost of $100 per month or more and has had a 10% or greater cost increase during the previous year. Among the requirements for the report are:

  • the factors that contributed to the price increase
  • the direct costs incurred by the manufacturer to manufacture, distribute, and market the drug, and for ongoing safety and effectiveness research associated with the drug
  • the total sales revenue for the drug during the previous calendar year
  • the 10 highest prices paid for the drug during the previous calendar year in any country other than the United States
  • documentation necessary to support the information provided in the report

The law also includes new reporting requirements for health insurers. HB 4005 requires insurers to disclose the following information about drugs reimbursed by the insurer under state policies or certificates:

  • the 25 most frequently prescribed drugs
  • the 25 most costly drugs as a portion of total annual spending
  • the 25 drugs that have caused the greatest increase in total plan spending from one year to the next
  • the impact of the costs of prescription drugs on premium rates