Maryland Pricing Transparency Bill – One of the biggest issues for the biopharma industry in 2016 was the growing public backlash against rising drug prices. It seems the public have had enough of drug companies charging extortionate prices for their products, leaving patients in a position of having to choose between using important treatments that can save their lives and other priorities.
Government has taken notice of this and, at the federal-level, Senators like Bernie Sanders and Angus King are working hard to produce new legislation to deal with this issue. But efforts are also being made at the state-level.
Maryland has recently released a pricing transparency bill which would target drug manufacturers with expensive medicines, i.e. those that cost $2,500 or more either annually or per course of treatment.
If enacted, the state’s Senate Bill 437 would require these companies to file a report disclosing their spending on the R&D, manufacturing and marketing costs involved in bringing the drugs to market. This report must be posted publicly so that patients can have easy access to this information.
Unsurprisingly, this Pricing Transparency Bill is not popular among drug industry representatives. PhRMA, BIO and the Association for Affordable Medicines (AAM), which is the generics industry association, have each presented critiques of the Bill at a hearing this past Monday.
These organizations claim this Pricing Transparency Bill could be extremely detrimental if it becomes law as it could threaten future innovation. They believe that simply providing a record of spending does not sufficiently account for key aspects of the R&D, manufacturing, and marketing processes. Furthermore, some industry groups claim that the $2,500 is too low and that the requirements of this Pricing Transparency Bill would be too burdensome for companies, especially smaller pharma companies developing pioneer products.
However, there are some who are very much in favor of this new Pricing Transparency Bill. Maryland Citizen’s Health Initiative, Health Care for All Coalition, and Knowledge Ecology International, were among those groups that voiced their support for the Bill at Monday’s hearing.
These groups believe that public disclosure of drug industry spending is necessary if patients are to understand why important medications are increasing so drastically in price. It is also hoped that knowing that the public will be able to scrutinize their pricing policies will deter pharma companies from ramping up the price of their drugs in the first place.
So far in 2017, 14 other states, including Arizona, California, Tennessee, Florida, Maine, and Oregon have proposed similar state-level transparency Bills on drug pricing. There were several other states who took this initiative in 2016, and Vermont, which signed its Bill into law in June of last year, has already released its first transparency report.
It has been reported that between 80 and 90% of Marylanders support the proposed legislation for their state, and many are optimistic that they will follow in Vermont’s footsteps. However, we will have to wait and see whether the drug industry can use its influence to stop this Bill in its tracks before it becomes law.