State Legislatures Examine Proposals to Curb Rx Drug Costs
Recent legislative committee hearings in Maryland, Florida, and Illinois provide a national snapshot of states’ diverse and innovative proposals to reign in drug costs.
Maryland’s drug affordability review board: Earlier this month, Maryland’s House Health and Government Operations Committee and Senate Finance Committee held lengthy hearings on an innovative bill that creates a state prescription drug affordability review board (see NASHP’s model legislation here.)
The board would review drugs whose price increases met or exceeded a certain threshold and set an upper payment limit if the board found the drug cost to be excessive. During the committee hearings, constituents stressed the urgency of finding a solution for increasing drug prices, and many shared their struggles of choosing between paying bills and purchasing necessary medication. There was also testimony from pharmaceutical industry representatives who voiced their concerns about the bill and said it could hamper innovation.
The committee hearings gave legislators the opportunity to hear details of the proposed bill. One Maryland state senator questioned how the upper payment limit established by the affordability board differed from the state’s anti-price-gouging law that was found to be unconstitutional last year, based on the claim that it regulated commerce beyond state borders. Supporters explained that an affordability review board would not encounter the same legal challenge because it clearly defines its jurisdiction over only drugs sold in the state. Another representative asked whether all drugs would fall under the purview of the board. The sponsor explained that only drugs that meet certain price increase thresholds would be subject to board review. As seven other states explore similar legislation, NASHP has compiled a Drug Affordability Review Board Legislation Q&A that answers many legislators’ questions.
Florida’s drug importation bill: Florida lawmakers are considering implementation of a wholesale drug importation program. Bills filed in both the Florida House and Senate would allow the state to import high-cost drugs from Canada at a lower price. Florida’s legislative process often requires that bills pass through two or three committees before a floor vote, giving lawmakers, stakeholders, and constituents ample time to consider a bill. In March, three House committees met to ask questions about the bill and learn more about importation. During hearings, the bill’s sponsor explained that more than 30 Canadian drug manufacturers are already registered by the US Food and Drug Administration to produce drugs for US markets, and that safety standards in Canada are comparable to those in the United States. Lawmakers had additional questions about cost savings and the supply chain. For more information about importation legislation, read NASHP’s importation Q&A.
Illinois’ prescription drug committee action: The Illinois House of Representatives created a Prescription Drug Affordability and Access Committee to address bills designed to curb drug costs. The committee is currently reviewing 17 bills, including legislation to create a drug affordability review board, similar to Maryland’s, and a wholesale importation program. It is also reviewing a bill that requires health insurers to ensure that at least 25 percent of their plans apply a pre-deductible, flat-dollar copayment structure to their entire drug benefit component. The committee is also considering a proposal to tax drug price increases that exceed the inflation rate. This tax would be paid by businesses that make the first sale in the state and could not be passed through to consumers. Any money collected from the tax will be deposited into a new fund dedicated to prescription drug cost fairness.
To date, the Illinois committee has met multiple times for informational sessions to learn how the drug pricing system works and to hear from consumer advocates and stakeholders. Establishing a specific committee dedicated to identifying solutions to the rising cost of prescription drugs indicates how important this issue is as the state legislature tries to help constituents afford medication and balance the state’s budget.
NASHP is tracking state legislative action across the country as lawmakers schedule more hearings on prescription drug costs. To find out the status of any state’s drug pricing legislation as they move toward enactment, explore NASHP’s Rx State Legislative Tracker. To learn more about NASHP’s prescription drug work, visit its Center for State Rx Drug Pricing.