As discussed in our recent post, states have turned up the heat on drug companies through both legislation and voter initiatives that would require drug companies to disclose their pricing mechanisms for certain high-cost drugs. Prior to this recent slate of drug pricing legislation and initiatives that largely put the onus on drug companies to explain the sharp rise in prescription drug costs, states have attempted to address prescription drug prices through “cap the copay” legislation.
“Cap the copay” legislation is aimed at cushioning the financial pain for patients who need high cost medicines. In 2013 and 2014, at least seven states – Delaware, Louisiana, Maine, Maryland, Montana, New York, and Vermont – passed legislation limiting the out-of-pocket payments of patients in private health plans. However, similar legislation introduced in Oregon and Illinois in 2015 failed to make it out of committee.
Such legislation has been backed by the pharmaceutical industry. According to the industry, insurers are shifting a larger share of drug costs to patients through drug formulary designs that impose high cost-sharing amounts for drugs in “specialty tiers.” Insurers have pushed back noting that while the “cap the copay” legislation would help bring financial relief to some patients, such measures would fail to control rising drugs prices set by drug makers.
“Cap the copay” legislation is still on the table, and some states have also proposed legislation requiring insurers to provide patients with information on out-of-pocket prescription drug costs. In the wake of the Sovaldi and other specialty drug price hikes, the pricing practices of both drug companies and insurers continue to be under scrutiny at both the federal and state level.