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States pushing for more RX price transparency

Outraged by exorbitant prices for certain prescription drugs, lawmakers in at least 11 states have introduced legislation that would require pharmaceutical companies to justify their prices by disclosing how much they spend on research, manufacturing and marketing (Source: “High Drug Prices Prompt Demands for Transparency,” Pew Charitable Trust Stateline, March 7, 2016).

The bills are similar to a provision in President Barack Obama’s proposed 2017 budget. The sponsors of the measures say they have a variety of goals: to educate policymakers and consumers about the reason for high prescription drug prices; to shame pharmaceutical companies into moderating their prices; and, in some states, including Massachusetts, to actually place a ceiling on prices that are determined to be unjustified.

The prices of medications rose 9.4 percent between 2006 and 2013, compared to a general inflation rate of 1.5 percent, according to the AARP.  Spending on prescription drugs rose by 12.2 percent in 2014, while overall health care spending grew by 5.3 percent, according to the federal government.

In addition to Massachusetts, transparency measures have been filed or carried over from last year in Colorado, Michigan, North Carolina, Oregon, Pennsylvania, Tennessee, Virginia and Washington. A proposal in New York has the strong support of Democratic Gov. Andrew Cuomo, while one in California was defeated in early January. Unusually in these days of hyper-partisanship, some of the bills have been filed by Republicans and some by Democrats.