The Price Isn’t Right: States’ Drug Pricing Transparency Laws


Responding to growing public concern over drugmakers’ price increases, particularly on older pharmaceutical products, states have been exploring requiring drugmakers to be more transparent about their price hikes.

But such laws have faced fierce opposition from drug industry lobbying groups like the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Innovation Organization (BIO), and the Association for Accessible Medicines (AAM).

Many state transparency bills have been killed outright and some bills that have made it into law are being challenged as unconstitutional. Meanwhile, states such as Ohio and California have put drug pricing transparency initiatives on their ballots to force the issue.

In September, PhRMA and BIO sued Nevada over SB 539, signed into law this summer. The Nevada law requires drugmakers and pharmacy benefit managers (PBMs) to disclose pricing and rebate information for diabetes drugs, and PhRMA and BIO claim it violates trade secret and patent protection laws. In July, AAM, the lobbying arm of the generic drug industry, sued Maryland over recently enacted legislation (H.B. 631) prohibiting drugmakers or distributors from instituting “an unconscionable increase” in the price of an essential off-patent or generic drug, claiming Maryland’s law violates the U.S. Constitution.

Vermont was the first state to require greater transparency from drug manufacturers regarding price increases, passing legislation in 2016.

But other states’ attempts to pass transparency initiatives, including ones this summer in Massachusetts and California, have failed in the face of fierce opposition from the pharmaceutical industry.

Some states are turning to ballot initiatives when state legislatures have been unable or unwilling to act on drug pricing issues. Currently, there’s a state ballot initiative in Ohio, the Ohio Drug Price Relief Act, aimed at lowering prescription drug prices. But even these may not succeed. Last year, heavy industry lobbying killed a similar California ballot initiative in what was one of the most costly ballot measure campaigns ever.

Read my story about the suit over the Nevada law here.

Stay on top of new developments in health law and regulation with a free trial to the Health Law Resource Center.

Learn more about Bloomberg Law and sign up for a free trial.