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PHARMACEUTICALS: Facts, Policies and NCSL Resources

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Updated: April 2013

AT A GLANCE:  Prescription drugs continue as one of the more active health policy issues in 2013.  NCSL has followed the state aspects of these issues for a number of years.

As reported in 2012, Americans spend more than $271 billion dollars on prescription medicines annually. Total spending on drug therapy total about $300 billion dollars, including over-the-counter (OTC) drug remedies,valued at 31 billion.

Back in 2007, CMS researchers predicted that prescription drug spending would grow at an average annual rate of 8.6 percent until 2016.  However, for 2007, actual annual growth in drug spending slowed drastically.  A federally sponsored annual study documented annual growth of prescription drug spending at 2.9 percent, lower than any other major health care sector and the lowest level in 45 years.  Another study led by IMS Health showed growth had dropped to only 3.8 percent for the commercial market for medications.  

For 2010, total US retail spending on prescription drugs accounted for the third-largest share—10 percent— of total national health spending, after hospital spending and spending on physician and clinical services. In 2010, total retail prescription drug spending grew only 1.2 percent,
to $259.1 billion. This historically low rate of growth in 2010 was driven by slower growth in the volume of drugs consumed, a continuing increase in the use of generic medications, the loss of patent protection for certain brand-name drugs, fewer new drug introductions than in previous years,20 and an increase in Medicaid prescription drug rebates.  The volume of prescription medicines consumed increased at a historically low rate in 2010, with slower or declining demand recorded in nearly every major therapy area.23  The number of prescriptions dispensed increased only 1.2 percent in 2010—a deceleration from 2.1 percent in 2009. The  generic dispensing rate (excluding the category of “branded generics”), increased from 66 percent in 2009 to 67 percent in
2010. (CMS Office of the Actuary, Health Affairs, January 11, 2012). 

In the dozen years between 2001 and 2012, at least 38 states had passed some type of state pharmaceutical assistance law and four others had executive agency initiatives, for a total of 42 states with assistance programs enacted or authorized. 2 However, the number of operating programs is on the decline, due to  Medicare Part D benefits and expanded discounts available under the Affordable Care Act, starting in 2011.  Most use state funds to help pay for a portion of the cost of pharmaceuticals for eligible residents who meet age and income criteria. Some states also have established cost-sharing features including co-payments, annual enrollment fees, or monthly limits.

Other states are operating or authorizing broader discount programs aimed at assisting people lacking private insurance, or even the general consuming public. In separate actions, all 50 states have adjusted Medicaid pharmaceutical policy in the past decade. NCSL now has more than 40 reports and presentations on pharmaceuticals, most of which are online and summarized below.

RECENT NCSL MATERIALS & ACTIVITY:

STATE RX LEGISLATION ARCHIVE:

PRESCRIPTION DRUG STATE LEGISLATION - Each year between 1999 and 2009 NCSL compiled and published the most comprehensive tracking report of bills and resolutions affecting pharmaceuticals.  The reports are updated including final outcomes at the end of each calendar and session year. These annual reports are offline, but are available upon request.  Reports for 2010-2012 are not available in published form.

NCSL ON-LINE REPORTS & PRESENTATIONS:

These web documents include information on laws and initiatives to provide state subsidies, as well as discounts, bulk purchasing, price regulation and other regulatory and funding policies, including state Medicaid and Medicare activities:

 

NCSL session on Pharmaceuticals:
IDEAS AT WORK FOR PRESCRIPTION DRUGS held Wednesday, July 23, 2008

 Hear about three programs that are up and running in a growing number of states.

  1. Prescription Drug Monitoring Programs help medical professionals prevent misuse and abusers from obtaining prescriptions fraudulently before the police knock on the door.
    > Speaker: Sherry Green, National Alliance for Model State Drug Laws, Alexandria, VA. - [ Handout#1 | Handout #2]
    > Alan Must, Purdue-Pharma, New Jersey - [ Presentation]
  2. The federal 340B Drug Pricing Program helps over 13,000 qualified health centers, clinics and hospitals provide comprehensive pharmacy services for over 10 million patients.
    > Speaker: Lisa Scholz, HRSA Pharmacy Services Support Center, Washington, DC. - [ Presentation]
  3. Medication Therapy Management (MTM) programs allow pharmacists to provide in-depth counseling to insure that patients get the full benefit of chronic prescribed drugs.
    > Edward Staffa, RPh, Vice President, Mirixa & NCPA spokesperson.
    > Marjorie Powell, Senior Assistant General Counsel, PhRMA, Washington, DC.

  • Achieving Pharmaceutical Access: The Roles of Disclosure and Privacy - RX at NCSL's Annual Meeting in Boston:- August 6, 2007 hosted by the Health Committee.  Most Americans rely on the private market for their medicines.  This session will examine two hotly-debated prescription drug policies facing states and pharmacists.  First, should prescription records identifying doctors or patients be available for marketing purposes by industry professionals? Second, should states set standards for Pharmacy Benefit Managers (PBMs), the middlemen that negotiate prices and transactions for 200 million Americans

    • Welcome/Introduction: Senator Leticia Van de Putte, Texas Senate; NCSL President
    • Presiding: Senator Durell Peaden, Florida; Vice-Chair, NCSL Health Committee
    • Donna Boswell, Hogan & Hartson, Washington DC  | PowerPoint
    • Representative Cindy Rosenwald, New Hampshire; Chair, NH Health and Human Services Committee | PowerPoint
    • Barbara Levy,  Pharmaceutical Care Management Association (PCMA)  | PowerPoint
    • Mark Riley, Vice President, National Community Pharmacists Association (NCPA), Arkansas  | PowerPoint

  • "POINT-COUNTER POINT: SHOULD STATES REGULATE DATA MINING?" - a transcript excerpt from the session, published in State Health Notes - 9/4/07.

  • Update on State Actions Related to Medicare Part D Prescription Drug Coverage, Rx Sessions at NCSL Fall Forum in San Antonio, Texas - December 7, 2006. 
         On January 1, 2007, the second year of Medicare pharmaceutical benefits begins.  Many states continue to play a significant role for seniors and persons with disabilities needing medicines - by providing "wrap around" subsidies for premiums and coverage gaps, by problem-solving and by sponsoring programs for those not eligible for Medicare.  New commercial plan designs, questions about state "clawback" payments, Medicaid program responses and possible actions in Congress all loom as legislators prepare to tackle state pharmaceutical budgets and policy.  Hear four experts share the latest news and trends.

    • Steven McAdoo, Deputy Regional Administrator, Centers for Medicare and Medicaid Services (CMS Region 6), Dallas, Texas | PowerPoint [3.8 Mb]
    • Joy Johnson Wilson, Health Policy Director, NCSL staff, Washington, DC
    • Richard Cauchi, Health Program Director, NCSL Staff, Colorado  | PowerPoint   PDF

    > "Are our Drugs Safe Enough?  A look at Counterfeits, Unapproved Products and Prescribing without Mistakes

    • Moderator: Senator Gary "Doc" Dillon, M.D., Indiana State Senate
    • Eleni Anagnostiadis, R.Ph., Board Services Director, National Association of Boards of Pharmacy (NABP), Illinois  | PowerPoint   PDF
    • Patrick Ford, Director, Americas Region, Pfizer Global Security, New York | PowerPoint  PDF
    • Marissa Schlaifer, R.Ph., Pharmacy Affairs Director, Academy of Managed Care Pharmacy (AMCP), Virginia  | PowerPoint   PDF
         International and domestic prescription drug counterfeiting has become a visible policy issue, as suspect copies of drug products have been increasingly confiscated by the FDA.  At the same time, consumers read that "hundreds of unapproved drugs made in the US are sold by prescription."  Learn what some states are doing, from requiring wholesale product "pedigrees" to demanding legible records, to assure that pharmaceuticals are both safe and accessible.

  • Annual Meeting Rx Sessions  - held August 16, 2006 in Nashville, TN.

    • "Medicare Prescription Drug Coverage and the States" - Even with the Medicare Part D Program well underway, states continue to play important roles in prescription drug coverage for millions of low-income people.  In addition to supplementing the new federal coverage, many states are modifying their State Pharmaceutical Assistance Programs and making adjustments to Medicaid and other Rx programs. 
        * Vernon Smith, Principal, Health Management Associates, Lansing, Michigan PowerPoint Online | html  
        * Assemblymember Richard Gottfried, Chair, Assembly Health Committee, New York State
        * Gloria Parker, Associate Regional Administrator, Centers for Medicare and Medicaid Services, Region Four, Atlanta, Georgia  PowerPoint
        * Edward Belkin, VP for Communications and Public Affairs, Pharmaceutical Research and Manufacturers of America, D.C.  PowerPoint  
        * Moderator: Senator Judy Lee, North Dakota
    • "Prescription Drug Discounts: from 340B to Consumer Cards."  - For the 40+ million Americans not on Medicare or comprehensive private insurance, access to prescription drugs remains a visible concern. The federal 340B drug discount program provides one significant option - including a fast-expanding network of clinics and pharmacies in every state.  In addition, user-friendly industry-sponsored assistance cards and new state discount laws keep pharmaceuticals near the top of policymakers' priority lists.
        * Harry Hagel, Senior Director, HRSA Pharmacy Services Support Center, Washington, DC  PowerPoint
        * Roba Whiteley, Executive Director, Together Rx Access, Alexandria, Virginia PowerPoint  | html 
        * Moderator: Senator Renee Unterman, Georgia. 

MMA- MEDICARE MODERNIZATION ACT:

  • Medicare Part D: Latest State Updates  NCSL SPRING FORUM- RX Session:  held Friday, April 7, 2006 in Washington DC. As part of their ongoing efforts to help Medicare beneficiaries understand Part D, states often are reshaping or creating State Pharmaceutical Assistance Programs to provide additional wrap-around support for Part D enrollees. States are looking at Part D's impact on Medicaid prescription drug programs, including preferred drug lists and rebates.  Learn about current state legislative activity on prescription drugs related to Part D and hear from the federal government about key implementation issues affecting states. 
  • Speakers:
    * Joseph Fine and Cora Tracy, [PowerPoint] - Centers for Medicare and Medicaid Services, Baltimore, MD.
    * Richard Cauchi and Donna Folkemer, [PowerPoint] - NCSL staff Directors, Denver and Washington, DC.

ARCHIVE: More NCSL Reports 2003-2005

Non-NCSL Resources:   

Prescription Drug Resources for 2013 - A selection of additional reports from government, academic, industry and consumer sources, including 50+ direct web links, updated regularly.

 

Note:  NCSL provides links to other Web sites for information purposes only.  Providing these links does not indicate NCSL's support or endorsement of the site.

 

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