PHARMACEUTICALS: Facts, Policies and NCSL Resources
Updated: Oct. 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.
National Health Expenditures: Prescription Drugs
In Sept. 2013 a Health Affairs Web article provided an updated perspective on where spending is for prescription drugs now and through the next 10 years. The actuaries from CMS stated, "In 2012 prescription drug spending is estimated to have accounted for $260.8 billion in health spending - a decline of 0.8 percent and down from 2.9 percent growth in 2011. The drop in projected spending was caused by declines in the average price paid for prescriptions (because a number of popular brand-name drugs lost patent protection and there was increased use of generic drugs), increases in cost sharing requirements, and lower spending on new medicines. These factors were partly offset by more rapid growth in the number of dispensed prescriptions. estimated to have grown 1.3 percent in 2012, compared to 0.6 percent in 2011.
In 2014 prescription drug spending growth is projected to accelerate to 5.2 percent, driven by increases in the use of prescription drugs by people who are newly insured and those who move to more generous insurance plans. Additionally, drug spending growth is expected to rebound from the very low growth anticipated in 2012 and 2013 as the economy improves and the impact of patent expirations continues to diminish. Through 2022... the proportion of generic drugs dispensed is anticipated to level off at roughly 85 percent, pushing average prescription drug prices up."
The projections reflect a combination of factors affecting health care spending, including provisions of the Affordable Care Act (ACA) that increase health insurance coverage and forecasted changes in the nation's economy."
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:
- Compounding Interest: A tragedy caused by contaminated steroids turned the spotlight on compounding pharmacies - Health Program article in State Legislatures Magazine, June 2013
- State Pharmaceutical Assistance Programs - features tables summarizing all current and recent historical state subsidy (SPAP) and discount programs, for seniors, disabled, uninsured and others. Updated periodically; 2012. [22 pages] .
- State Regulation of Compounding Pharmacies - NCSL report, updated regularly, 2013.
- Health Care Reform: A Pharmaceutical Perspective on State Responses - Slide presentation by NCSL, February 2013.
- Medicaid Preferred Drug Lists (PDLs) for Mental Health and Substance Abuse - new research 50-state summary by NCSL, posted April 2012.
Use of Generic Prescription Drugs and Brand-Name Discounts - - PDF File - Published by NCSL, June 2010
- Prescription Drug Agreements and Volume Purchasing (Preferred Drug Lists, Rebates, Multi-state Purchasing and Effectiveness Review of Medicine) - PDF File - Published by NCSL, June 2010.
- Resources for Prescription Drugs. Part of the NCSL's Health Cost Containment and Efficiencies series, updated 2012.
- 2009 Prescription Drug Enacted State Laws - NCSL's most recent archive report on 84 signed Rx laws in 32 states. January 2010
Comparative Effectiveness: Better Care or Rationing session at NCSL Legislative Summit, July 2009.
Prescription Drug Costs Slow - Health Program article in State Legislatures Magazine, April 2009.
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:
An Introduction to Biologic Medicines - A program for health staff, focused on both science and policy issues related to biologic medicines, and how they fit in the spectrum of medical and pharmaceutical treatments. The program included a welcome from Texas Senator Leticia Van de Putte, a pharmacist for more than 31 years who represents a large portion of San Antonio. Held August 7, 2011
Senator Leticia Van de Putte, former President of NCSL (2006-07), San Antonio, Texas
Geoffrey Eich, an executive director at Amgen, California - Powerpoint (PDF file-10 pages)
This program was made possible by Amgen, with funding through NCSL’s Foundation for State Legislatures, facilitated by the NCSL Health Program.
Regulations for Biosimilars:
As biologic drug patents begin to expire, generic versions will hit the market—but how will they be regulated? The Scientist, June 2012
- Generic Drug Pricing and States: $4 drug promotions - NCSL report, updated March 2011.
Marketing Drugs: Debating the Real Cost - Concern about close ties between doctors and pharmaceutical firms are prompting new financial disclosure laws and education efforts. By Rachel Brand, in State Legislatures Magazine, September 2008.
Prevention of Prescription Drug/Pharmaceutical Overdose and Abuse - January 2009
- Medicare Prescription Drug Coverage: NCSL Tools for State Legislatures - NCSL overview, updated 2011.
- "Part D Decisions" - Like other employers, many states are collecting a new federal subsidy for maintaining retiree drug coverage--but for most, that's not their final answer. - State Legislatures Magazine, 9/06
- Medicaid Prescription Drug Reform Provisions (DRA) - NCSL 's federal policy has urged congress to amend federal Medicaid law to give states greater flexibility in administering their individual state programs. A Department of Health and Human Services (HHS) Office of the Inspector General (OIG) Document: Determining Average Manufacturer Prices for Prescription Drugs Under the Deficit Reduction Act of 2005 (67 page pdf document).
HHS OIG Document: Review of 340B Prices (52 page pdf document), 5/2/07. Updated 3/08.
- Prescription Drug Bulk Purchasing- material on state initiatives, both multi-state and inter-agency. Updated 2011.
- State Prescription Drug Return, Reuse and Recycling Laws" - newly published by NCSL, updated 1/09.
- "Condition-specific Drug Substitution Legislation: Epilepsy" - Updated 2/09.
- "E-PRESCRIBING: MISSIVES FROM THE FRONT" - New Hampshire, Mississippi and Florida are just three of the states that are seeking to prevent medical errors by expanding the use of e-prescribing. 1/08.
- States and the 340B Drug Pricing Program - NCSL resource report, updated 2010
- Marketing and Direct-to-Consumer Advertising of Pharmaceuticals, 2001-08 - an NCSL report and chart of state legislation, updated 2009.
- "Medication-Assisted Treatment for Opiate Addiction" (MAT) - published by NCSL's DC staff, for 2008.
Price Disclosure Laws and Websites for Prescription Drugs - a section of NCSL's Disclosure and Transparency of Health and Hospital Prices - 2009
- Prescription drug emergency controls, scams and hoarding - This report analyzes retail, wholesale and Internet purchases and potential fraudulent, counterfeit or illegal transactions, with a special flu vaccine update. Updated 2009.
- Prescription Drug Monitoring Programs - NCSL resources compiled by the Criminal Justice Program & Health Program, 2008.
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.
- 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]
- 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]
- 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.
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 on Resources: 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.