Michigan Association of Health Plans

State lawmakers seek to improve drug-pricing transparency

New Jersey lawmakers are looking to increase transparency when it comes to the prices of of pharmaceuticals marketed in the Garden State. Their goal: boost competition among drug makers in ways that will lower consumer costs.

The Senate health committee unanimously approved a bill on Monday that would require state officials to establish a public website that lists the wholesale cost of medications, based on data provided by the manufacturer on a quarterly basis. Once established, the state would be required to inform licensed prescribers annually about the website’s existence in an effort to help them shop around for savings.

“Drug prices in this country have continued to rise astronomically, and Americans spend more on prescription drugs than anyone else in the world,” said Sen. Troy Singleton (D-Burlington), the bill’s sponsor. “This legislation will bring more drug-price transparency to the state, and in turn, create competition that will result in lower costs.”

Letting prescriptions go unfilled

According to AARP, nearly three out of four Americans over age 50 are concerned about the rising cost of medications. Nearly 40 percent do not always fill their prescriptions as ordered because of the expense involved, the group found. AARP launched a national campaign earlier this year to urge federal action on the issue.

While prescription drugs remain a relatively small percentage of the overall healthcare tab nationwide, those costs are more volatile and are escalating at an alarming rate, experts note. An analysis of healthcare claims data from 2012 to 2016, commissioned by the New Jersey Health Care Quality Institute, showed that while overall healthcare spending rose 18 percent in New Jersey — outpacing the national rise of 15 percent — drug costs jumped 27 percent during those four years.

The rising prices have forced New Jersey hospitals to more than double their medication budget — to $1.6 billion — between 2008 and 2017, according to the New Jersey Hospital Association. And per-patient costs for pharmaceuticals escalated 132 percent over the decade, on average, it said.

The issue has become a new target for President Donald Trump, and there are several bipartisan proposals introduced in Congress to try and curb the trend. U.S. Rep. Frank Pallone (D-NJ) has rallied support for a measure to promote the development of generic medications, reduce the power of drug companies to protect brand-name patents, and improve transparency around pricing.

What’s more, New Jersey Attorney General Gurbir Grewal joined a multistate lawsuit last month charging generic drug makers with artificially inflating the prices on more than 100 medications, including common treatments for cholesterol, HIV, and cancer. Of the 20 companies charged, 11 are based in the Garden State.

Singleton’s proposal (S-2389), first introduced in April, calls for the State Board of Pharmacy to establish the website, with a dedicated link from its homepage. The board should pursue grant funding and contract with an outside vendor to build and manage the page.

Calling out drugs by name

Under the bill, the website would list the name of each applicable drug — organized by treatment category — and include information about the dose, brand, and generic status, as well as the per-unit wholesale acquisition cost. That figure is what the manufacture lists as the price for wholesalers, or direct sales to prescribers, according to U.S. Pharmacist, an online resource for the industry.

The legislation would require information to be displayed on any pharmaceuticals that a manufacturer, or their marketing company, promotes to doctors or other prescribers located in New Jersey. The companies would be required to submit the pricing info to the board quarterly, within a month of the quarter’s end, and they could be charged between $200 for a first offense and up to $20,000 for repeat noncompliance.

The measure would take effect immediately; once the website is established, other licensing boards would be required each year to alert the prescribers they regulate about its existence each year. An Assembly version, sponsored by Assemblywoman Annette Quijano (D-Union) has yet to have a hearing.

A familiar concern

The issue of drug pricing is not new to Singleton, who introduced a measure last year that took a page from the playbook of presidential candidate and U.S. Sen. Bernie Sanders, (I-VT).

That proposal, which had several hearings last year but has not advanced since, would peg the price of drugs to the lowest price the manufacturer charges certain other industrial countries for the same medications. It would apply to any formulations that were developed using public funding and approved by the federal Food and Drug Administration.

This article was originally published in NJ Spotlight.