Three categories of price increase legislation—transparency, affordability review, and anti-price gouging—account for all 15 state laws to date and 94% of bills considered in 2020. Most laws were enacted within the past 2 years, suggesting legislative momentum. As outstanding bills must be re-introduced in subsequent legislative biennia, our study offers lawmakers several considerations to enhance the likelihood that price increase legislation benefits patients.
Among the 32 transparency bills, 44% do not require manufacturer notice until after the price increase has occurred, possibly a response to legal pushback against California’s transparency law (SB17) requiring prospective notice.4 In theory, this post hoc stipulation compromises effectiveness, since patients may not become aware of a price increase until the point of purchase.
Maryland and Maine passed laws creating affordability review boards in 2019, followed by New Hampshire in 2020 (Fig. 1). Thirteen other states filed 18 similar bills in 2020. This legislation goes beyond transparency, allowing for payment limits when prices or price increases create “affordability challenges” for payors or patients.7 Unlike the Maryland and Maine laws—whose effectiveness has been questioned—most 2020 bills (72%) empower the board to set reimbursement levels for reviewed drugs without involving a separate entity.7 Additionally, many (61%) do not mandate manufacturer reporting, leaving procurement of pricing information to the board through “other means”, which may result in missed price hikes. Importantly, few (22%) specify off-patent off-exclusivity (OPOE) drugs—off-patent brand-name drugs without generic competition that are cheaper than patent-protected brand-name drugs but prone to price hikes.2 Failure to specify OPOE drugs subjects them to higher “brand-name” board review thresholds (e.g., increase of $3000 for a 1-year supply or “treatment course”) where smaller absolute price increases that are large on percentage basis may be overlooked.
Limitations include the exclusion of 23 price increase bills due to narrow scope, which are likely to lower state spending and benefit some patients, and the possibility of missing legislation enacted before 01/01/2015 or legislation missed by search criteria.
Modifications to legislative language relating to timing, reporting, and drug types could increase the impact of state transparency and affordability review legislation. Although no anti-price gouging laws have been enacted since Maryland’s, 2020 state lawmakers demonstrated a continued interest in this legislation. Recently announced model anti-price gouging legislation—including provisions to avoid repeating history—may be introduced as early as 2021.8