Caitlin Owens Mar
21, 2019
Several states
are considering new "affordability boards" to rein in prescription
drug prices. They're hoping that approach would avoid the legal pitfalls that
tripped up earlier state-based policies.
How it works: These new
boards would review expensive drugs and, if it deems them too expensive, set a
new, lower price that insurance plans would have to pay.
Details: Several states have
introduced bills following a model by the National Academy
for State Health Policy:
- The
new affordability boards would review drugs with high launch prices (above
$30,000) or big price increases (more than 10% or $10,000 in a year).
For generics, the threshold would be launch prices above $3,000 or price
increases exceeding 25% or $300.
- If a state's board
determines that a drug isn't affordable for the state, it can set a
payment rate that insurers must abide by.
- “It’s setting the force
of law behind what the payer will pay, and requiring the supply chain to
work it out, which they always do," said Jane Horvath, a health care
consultant working with states on the bills.
Where it
stands: Maryland's bill has the most momentum so
far, and the effort is partially a response to the defeat of the state's
proposal to counter "price gouging," which was knocked down in court.
- Proponents
say regulating payers, not the actual drug prices, puts them on safer
legal ground.
- “If a state can't do
this, there’s nothing else they can do, other than importation,"
Horvath said.
The other
side: Opponents say they'll make some of the same legal arguments that
sank Maryland's earlier proposal.
- "States
that attempt to regulate transactions outside of their own borders will
face constitutional scrutiny," said Jeff Francer, general counsel of
the Association for Accessible Medicines, which represents generics manufacturers
and joined the lawsuit against Maryland's price-gouging bill.
- "Letting the
government set prices for medicines is merely a retread of failed policies
and political talking points that won’t address the affordability
challenges patients are facing and could potentially limit their access to
the medicines they need," the Pharmaceutical Research and
Manufacturers of America said in a statement.
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