What’s Happening with Drug Manufacturer Pricing Disclosure Law?
After identifying recent federal efforts that would require drug pricing transparency, this article discusses two state laws enacted recently. Thereafter, the article assesses previously enacted state laws requiring drug manufacturers to disclose pricing and other information to determine whether these reporting requirements have had any effect on drug pricing in the applicable state.
While the introduction of state legislation that would require drug manufacturers to disclose pricing and other information did not slow down in 2018, the number of bills that were made law did slow down. During 2018, 22 state legislatures considered bills seeking to require drug manufacturers to disclose pricing information; however, most of the legislation failed.
There are numerous reasons why state efforts to require drug manufacturers to disclose pricing and other information have slowed and/or failed. As discussed below, some states that enacted so-called “transparency” laws have found that confidentiality and trade secret protections result in such diluted information being disclosed that the pricing information available is of no use. Many states chose to focus transparency and disclosure requirements on other entities in the drug supply chain, e.g., pharmacy benefit managers (“PBMs”), managed care organizations (“MCOs”), and health plans. Perhaps states are realizing that obtaining manufacturers’ wholesale acquisition costs (“WACs”) or list prices serves no useful purpose because patients do not pay WAC prices and the public reporting of WAC prices, thus far, has done nothing or very little to keep manufacturers from raising prices.
After identifying recent federal efforts that would require drug pricing transparency, this article discusses the two state laws enacted in the latter half of 2018. Thereafter, the article assesses previously enacted state laws requiring drug manufacturers to disclose pricing and other information to determine whether these reporting requirements have had any effect on drug pricing in the applicable state.
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“What’s Happening with Drug Manufacturer Pricing Disclosure Law?” by Merle M. DeLancey Jr. was published in Pratt’s Government Contracting Law Report (Vol. 5, No. 7), an A.S. Pratt Publication, LexisNexis. Reprinted with permission.