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States’ Efforts for Drug Price Transparency Stymied by the Pharmaceutical Industry

As we previously reported, in 2015 and early 2016, bills and voter initiatives were introduced in several states that would impose drug pricing controls and transparency requirements on pharmaceutical manufacturers. Of approximately a dozen bills that have been introduced in state legislatures over the past year and a half, just one bill, Vermont’s, has made it into law. A bill in California passed the Senate on June 1st and is expected to be voted on by the Assembly by August 31st, and ballot measures to control drug prices in California and Ohio are expected to be on the ballots in 2016 and 2017. All other initiatives have died in committee and never made it to a floor vote.

Since their introduction, these drug price transparency bills have been fiercely opposed by the pharmaceutical industry to apparent effect. The latest casualty is a high-profile Massachusetts drug price transparency bill that Massachusetts lawmakers failed to vote on before adjourning on July 31st. According to an industry spokesperson, Massachusetts is a critical state for the biotech industry as many pharmaceutical companies have headquarters or major research operations in the state. And according to state lobbying reports, 27 pharmaceutical companies, plus PhRMA and the Massachusetts Biotechnology Council, lobbied against the bill in 2015.

The pharmaceutical industry has also launched a full scale lobbying effort against the California and Ohio ballot measures. The industry managed to thwart the signature gathering for the Ohio ballot measure through litigation and kept the measure off of the 2016 ballot. As of now, the California initiative is expected to be on the ballot in 2016, but the industry has spent approximately $68.4 million in a campaign against the initiative as well as lining up organizations including consumer and medical groups, to oppose the measure.

With the failure of many state drug pricing initiatives, the pressure will continue to increase for lawmakers at the federal level to contain drug costs – particularly in this election year.

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About this Author

Carrie A. Roll, Transactional Attorney, Mintz Levin, Law Firm
Associate

Carrie's practice involves a variety of transactional, regulatory, and fraud and abuse matters.

Carrie’s transactional experience focuses on advising health care clients on joint ventures, mergers and acquisitions, service agreements, and corporate stock and asset acquisitions. She has served as corporate and regulatory counsel to pharmacy benefit managers, retail pharmacies, and health care providers in acquisitions, which included due diligence, licensing, change of ownership, and contracting. Carrie has also assisted in the preparation and negotiation of pharmacy benefit manager...

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