Americans pay some of the highest prices in the developed world for prescription medication: On average, each individual spends $1,200 per year. But now, some states are trying to change that. On Wednesday, Colorado Gov. Jared Polis signed into law a bill that would implement a price cap on insulin, the first law of its kind in the nation.
Texas is also moving toward similar regulations. House Bill 2536 passed out of the state Senate this week. The bill would require pharmaceutical companies to disclose price hikes for medications. Proponents of the bill say it would make drug pricing in Texas more transparent, while pharmaceutical companies say that these measures unfairly target them; that they’re just one part of a larger product supply chain.
Jeremy Blackman, investigative reporter for the Houston Chronicle, says that the Colorado and Texas bills are some of the strongest drug-pricing transparency measures in the nation.
“It would basically force drug companies to report information about a drug when it jumps over a certain threshold,” Blackman says.
He says originally, the Texas bill required pharmaceutical companies to disclose price hikes when they raise the list price of a drug by 50% or more. But lawmakers strengthened the bill, requiring them to report price hikes of 15% or more.
“Which is among the strongest that other states have implemented,” Blackman says.
He says the U.S. Department of Health and Human Services will create a publicly available website to document the price hikes.
“Each company will have to, every time a drug goes over the threshold, will have to explain the exact reasons why,” Blackman says.
Even if consumers don’t take advantage of the prescription drug price information, he says documenting price increases will make it easier for lawmakers and others to monitor the industry.
“[It] could, in theory, influence future legislation that could ratchet down and try to prevent drug companies from doing that, which … is actually what’s happening in Colorado around one of these drugs,” Blackman says.
The bills in Colorado and Texas are part of a larger trend: Lawmakers in Washington are also trying to lower drug prices.
Even in Texas, where government regulation of businesses is anathema, Blackman says Gov. Greg Abbott is likely to sign the bill into law.
“He tweeted out, after the bill passed the Senate, that he was looking forward to it coming to his desk, and that consumers can get some much-needed transparency,” Blackman says.
Texas state Rep. Tom Oliverson (R-Cypress), a physician, wrote the bill, but Blackman says he didn’t do so expecting it would pass.
“That’s why he set the threshold as high as it was,” Blackman says.
He says the Texas bill is “indicative of that national trend”: Various news organizations have reported recently about how consumers are, in some cases, rationing their insulin because they can’t afford their prescription.
“This is really lawmakers responding to consistent calls from their constituents,” Blackman says.
Written by Caroline Covington.