Unlike most countries, the U.S. does not regulate drug pricing but allows the market to set them according to demand. On numerous occasions, the U.S. Congress sided with the pharmaceutical industry and failed to pass laws that would change how drugs are priced. In addition, the Trump administration has delayed the implementation of a rule under the Affordable Care Act to prevent price gorging. More information on the delay.
A recent catastrophe with sky-high drug prices used to treat life-threatening conditions prompted many states to enact or propose their own laws against pharmaceutical price gorging:
Maryland was the first state in the nation to go after pharmaceutical companies for unconscionable drug prices. Maryland’s attorney general can use the new law to sue generic drugs manufacturers that make an “unconscionable” price increase. As expected, the law met a strong opposition from the pharmaceutical industry which challenged the case in a federal court on the ground that it constitutes an “unconstitutional overreach that will create market instability.” A U.S. District Judge has refused to enjoin Maryland’s new law. More information on Maryland’s drug pricing law.
Nevada has a measure requiring drug makers to annually disclose the prices they set, profits they make and discounts they offer.
Ohio has a pending measure that would bar state entities from buying drugs at prices higher than those paid by the U.S. Department of Veterans Affairs, which typically pays 20% to 24% less than other agencies.
Massachusetts is considering a bill that would require manufacturers to explain the total cost for the top 20 most expensive drugs.
Louisiana requires each drug manufacturer or marketer to provide the state – four times each calendar year – the current wholesale acquisition cost for the approved drugs marketed in the state.
Michigan has proposed a plan to create a Prescription Drug Consumer Protection Board that drug manufacturers would be required to submit documentation to justify price increases above 10% in one year, or 30% over five years.
California has recently enacted a law that requires pharmaceutical companies to notify insurers and government plans at least 60 days before a drug price increase of more than 16 percent over a two-year period. More on California new law.