JAMA Report on Reducing Prescription Drug Prices Using Legislation, Notes 159% List Price Increase in 11 Years

May 5, 2021

A new report discusses legislation that could reduce skyrocketing drug prices. Attempts at the state level have put forth unsupported price increase (UPI) legislation—an idea that is gaining ground across the country. Proponents of UPI legislation note that continued price increases make up a significant portion of costs, with list prices increasing 159% between 2007 and 2018. UPI legislation would impose a tax on manufacturers that increase drug costs without explanation. In addition, UPI legislation would continue to allow the market to determine a launch price.

“In Massachusetts, Gov Charlie Baker has spearheaded legislation to limit annual price increases for drugs with average annual costs of $50 000 or more to inflation plus 2%. Increases above the limit are subject to a tax penalty of 80% on the excess portion. Originally introduced in 2019, the proposal is included in Baker’s fiscal year 2022 budget proposal, which awaits legislative action. Interest in, and arguments in favor of, UPI proposals have been strong enough that the National Academy for State Health Policy has created model legislation. Washington, Hawaii, Maine, and Connecticut introduced UPI legislation in the opening weeks of 2021 and more states are expected to follow.” Read the report here.

(Source: Mello et al., JAMA, 4/27/21)

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