California’s Drug Pricing Transparency Law Catches On

In October 2017, California passed one of the strictest drug pricing transparency laws in the nation. The law is now entering its next phase of implementation, and appears to be inspiring other states to pass similar legislation.

The initial phase, which went into effect at the beginning of the year, requires drug companies to give major purchasers 60 days’ notice when they plan to increase the price of a drug by 16 percent or more over two years.

The law’s next phase begins in October, when insurers will have to report the top 25 medications prescribed to their participants, the costliest prescriptions, and the drugs that experienced the largest price increases. Starting in 2019, the state will launch a public database of the price increases.

According to documents obtained by POLITICO, pharmaceutical company Valeant is about to raise the price of a generic glaucoma medication by 63 percent. Teva Pharmaceuticals is planning a 49 percent price increase for an inhaled solution to prevent asthma attacks.

Several states, including Massachusetts and Nebraska, have similar legislation pending; Oregon recently passed its own transparency law.

Source: Politico, March 25, 2018.