pharmacist prescription drugs

To help patients get better prices for their drugs, lawmakers in many states have banned the use of gag clauses, which restrict pharmacists from informing patients of less costly medication options.

Prescription Drugs Update: State Efforts to Boost Access and Lower Costs

By Colleen Becker | April 28, 2022 | State Legislatures News | Print

Lawmakers who disagree on other aspects of health policy often find common ground when it comes to prescription drug costs and access. So where are state proposals on these issues landing for the 2022 session?

Many lawmakers are pursuing policies aimed at lowering consumers’ out-of-pocket costs. Most people will need to take a prescription medicine at some point, but a drug’s cost may dictate how well they adhere to a treatment regimen or whether they buy the drug at all. When people don’t follow their prescribed treatments or fail to initiate treatment because of cost, it can lead to worse health outcomes as well as increased health care spending.

Insulin cost is a good example of this dilemma. When people with diabetes forego their insulin, serious health complications—vision loss, heart disease—can occur, and they are at higher risk of dying. Recognizing this concern, 19 states now restrict the amount consumers pay for insulin, ranging from $25-$100 per 30-day supply. Six states have limited copayments on other drugs, including specialty medicines.

Banning Gag Clauses

To help patients get better prices for their drugs, legislators in many states have banned the use of gag clauses in pharmacy benefit manager contracts. Gag clauses restrict a pharmacist from informing a patient of a less costly option, including paying for the drug without using their insurance. Federal law prohibits contractual gag clauses; however, many states have enacted legislation as a safeguard. During the 2022 session, Nebraska enacted the Pharmacy Benefit Manager Licensure and Regulation Act, which includes a prohibition against gag-clause restriction, as well as several other provisions, such as requiring that payments made by a third-party be applied to a patient’s annual cost-sharing.

While these policies may lower the cost at the pharmacy counter, they do not alter a drug’s list price. Additionally, the laws apply only to people with health insurance. Uninsured or underinsured patients might be responsible for the full price of the drug. When it comes to drug pricing, legislators are considering an array of strategies.

To dig deeper into drug costs and prices, some lawmakers are exploring transparency initiatives. More than a dozen states require reporting from manufacturers on price increases or initial launch prices, with some also requiring pricing and cost data from health plans, pharmacy benefit manager contracts and wholesalers. Bills are still pending in the current session in several states and territories, including Connecticut, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Puerto Rico and Rhode Island.

Affordability Boards

Prescription drug affordability boards are another approach states are taking to study drug prices, particularly for drugs posing affordability issues for state public and private programs. Following the lead of six states—Colorado, Maine, Maryland, New Hampshire, Ohio and Oregon—legislation passed during the 2022 session in Washington establishes the nation’s seventh such board. These nongovernmental agencies examine drug pricing and costs in their states, and some boards are authorized to determine spending targets or upper payment limits. The boards may also recommend which, if any, additional policy options their legislatures should pursue.

Because at some point, many people will need a prescription drug, it is likely that lawmakers will continue to explore a variety of policies that impact pocketbooks. NCSL will continue to track their efforts.

Colleen Becker is a senior policy specialist in NCSL’s Health Program.

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