By Colleen Becker
As 2019 ended, one could look at the wide range of state actions and conclude it was a trailblazing year of legislation related to prescription drug pricing, transparency and access.
NCSL tracked 137 enacted laws in 43 states that applied to actors across the supply chain including pharmacy benefit managers (PBMs), manufacturers, providers, public and private payers and patients.
Although states differed in their approaches, several themes emerged.
Almost a third of enacted laws in 27 states related to PBMs, third-party administrators of pharmacy benefits for public and private payers. Measures varied from requiring certain cost and rebate information be reported to the state, to allowing pharmacists to disclose alternative cost information to patients at the pharmacy counter, to anti-steering prohibitions—where patients are ‘steered’ to an affiliated pharmacy. Still other state actions imposed licensing and registration requirements for PBMs.
For example, Maine authorized a package of bills, including PBM reform that encompassed many of the above-mentioned approaches. Maine’s PBM law required insurers to oversee the business practices of the PBMs they contract with—a provision unique to Maine. It also requires PBMs to act as a fiduciary, or in the best interest of their clients which, in this case, is the insurance carrier and their members.
Joining the ranks of Ohio and West Virginia, Louisiana enacted a PBM law that bans spread pricing (when a PBM charges a payer more than it reimburses a pharmacy).
PBMs were not the only focus of prescription drug reforms. Maine’s suite of legislation also impacts drug developers by building on a 2018 price transparency law requiring manufacturers to report to the Maine Health Data Organization various cost information, including the 25 most frequently prescribed drugs in Maine and the 25 drugs with the highest year-over-year cost increase. The 2019 law adds an enforcement mechanism and penalty assessments for noncompliance.
In addition to comprehensive reporting requirements for health plans and PBMs, Washington state also addressed price transparency by requiring manufacturers to provide a 60-day notice of price increases for any Food and Drug Administration (FDA) approved drug.
In 2017, Nevada passed a first-in the-nation-law that required the state to compile a drug transparency report on essential diabetes medicines based on information reported from both manufacturers and PBMs. Building on this legislation, Nevada enacted another law in 2019, which applies those same requirements to manufacturers and PBMs who supply essential asthma medicines.
With the national spotlight increasingly drawn to patients rationing insulin, Colorado passed an unprecedented law capping the copayment of this vital medicine at a cost of $100 per 30-day supply. Illinois may be the second state to follow suit. The bill passed the legislature and is waiting for Governor J.B. Pritzker’s signature.
Drug affordability boards and study groups also emerged as themes during the 2019 legislative session. While Indiana and Nevada implemented committees to study the drug supply chain, New Mexico established an Interagency Pharmaceuticals Purchasing Council tasked with identifying cost containment strategies, including pooling the purchasing power among state agencies.
Maryland passed legislation forming the Prescription Drug Affordability Board, which can recommend upper payment limits on drugs that the board finds as presenting an “affordability challenge”—particularly medications that cost $30,000 a year or more, or have a $3,000 increase in the price of a cost of treatment from the previous 12 months. Similarly, Maine established a Prescription Drug Affordability Review Board which will set spending targets for public entities, including state employees and teachers.
Drug importation from Canadian suppliers continues to pique the interest of state lawmakers. Following Vermont’s landmark 2018 legislation, three other states—Colorado, Florida and Maine—enacted importation laws of their own during the 2019 session. Although unsuccessful, an additional 15 states proposed importation legislation.
Reflecting on the myriad measures that states took in 2019, can we expect more of the same in the year to come?
NCSL conducted an informal poll of statehouses across the country and results demonstrated that the momentum gained over the past 12 months is likely to carry into the new year. Respondents expressed that PBM reform will continue to be at the top of their priority list. Much like 2019, bills intended to increase transparency across the supply chain are also projected.
Following the lead of Colorado and Illinois, lawmakers in at least three other states have pre-filed bills aimed at reducing the monthly cost of insulin to patients. And importation will be debated by legislators in at least four states so far. With campaigns ramping up for 2020, we can expect prescription drugs will remain a key point of debate among state policymakers. NCSL will be tracking the thousands of pieces of legislation through the Prescription Drug Law Database. Please visit NCSL’s Prescription Drug Policy Resource Center to get the latest on breaking developments.
Colleen Becker is a policy specialist in NCSL’s Health Program.