A group of legislators wants to curb rising prescription drug costs in Minnesota by making companies publicly disclose planned price hikes before they take effect.
Sen. Julie Rosen, R-Vernon Center, said the goal of a new proposal is to force drug companies to “verify and justify” what she described as “out of control” increases in drug costs.
“Nobody forced drug companies to charge high prices, but they can, so they do,” Rosen said at a news conference Thursday. “What we hope to do this year is require transparency.”
Under the proposal, pharmaceutical companies would need to alert the Department of Public Health of substantial price hikes for new or existing drugs at least 30 days before the changes take effect. That information, along with the factors the company said led to the cost increase, would be posted to a public website. Failure to report would result in a fine of $10,000 a day.
The measure doesn’t go as far as some other proposals on prescription costs introduced this session, including one seeking to prevent “unconscionable price gouging” by capping the price of “essential” drugs. But it does have bipartisan backing and support from a range of groups, including AARP Minnesota and insurance groups such as HealthPartners.
Rep. Kelly Morrison, D-Deephaven, who sponsored the House version of the bill, said the hope is that increased transparency will give consumers more power.
“There’s a lot of mystery among all of us. Why are these drugs so expensive and why do the prices suddenly and really inexplicably increase?” she said. “This will apply public pressure to them to justify why that is and I think there’s potential for a little bit of public uprising to hold them accountable.”
Critics questioned that theory. Rep. John Lesch, D-St. Paul, who introduced the price cap proposal in the House, called the new measure an “industry effort to water down what could be a pro-consumer bill.” Lesch also questioned whether the new disclosure requirements would be effective in deterring price hikes.
“They’ll try to do whatever they can to hide the ball and say we have a really good reason for this price increase,” he said. “They’ll say we still are going to price gouge, they’ll just have to tell you that they’ll do it.”
PhRMA, the trade group representing the pharmaceutical industry, also opposes this plan. Spokesman Nick McGee said the proposal ignores the role pharmacy benefit managers, insurers and hospitals play in determining costs.
“This so-called transparency measure doesn’t provide patients any insight into how those out-of-pocket costs are determined, if they are getting the best deal on their medicine or whether rebates and discounts are being passed onto them,” he said.
Supporters of the plan argue that rising prescription prices are already having serious impacts on the health and finances of many Minnesotans and say any step toward more disclosure could help.
“We have to have both innovation and accessibility,” Nikki Foster, a Brooklyn Park resident who pays $1,300 a month for her multiple sclerosis medication, said. “Medication can only save lives if people can access them.”