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Drug price transparency bill gains traction in Pennsylvania

Bill would require manufacturers to disclose to the insurance department the costs of production for drugs with average wholesale prices greater than

Susan Morse, Senior Editor

A Pennsylvania congressman has introduced a drug transparency bill in his state that he believes could serve as a model nationwide.

House Bill 161 by House Insurance Committee Democratic Chairman Tony DeLuca would require drug manufacturers to disclose to the Pennsylvania Insurance Department the cost of drugs that have high wholesale cost prices.

It is similar to a bipartisan fair drug pricing bill introduced last year by U.S. Sens. Tammy Baldwin, a Democrat from Wisconsin, Republican John McCain of Arizona and Democratic Rep. Jan Schakowsky of Illinois. The federal bill takes aim at skyrocketing prescription drug prices by requiring pharmaceutical companies to publicly disclose and justify planned increases of more than 10 percent and to reveal the cost of research and development.

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Last fall officials predicted that the bill would be taken up by a new Congress, but so far it hasn't gotten much traction, according to DeLuca.

"I don't see the federal government doing it because pharmaceutical companies are pretty strong," DeLuca said.

DeLuca said he believes it is up to the states to introduce drug transparency bills.

"We're not talking about price controls," he said. "We are asking to make sure the insurance companies are not being ripped off, and the taxpayers who pay for insurance."

Under his bill, pharmaceutical manufacturers would let the state insurance commissioner know how much it costs to bring a drug to market and how many times the drug is kept on the market through the altering of a few ingredients.

"That something we don't know," he said.

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The price of prescription drugs has been in the national spotlight after manufacturers such as Mylan, Turing and Valeant Pharmaceuticals dramatically hiked the price of drugs that had been on the market for a long time.

The Pennsylvania bill would require a prescription drug manufacturer to disclose to the insurance department the costs of production for drugs with average wholesale prices greater than $5,000 annually, or throughout the course of treatment. The bill would also require disclosure of production costs for drugs whose wholesale price has increased 50 percent or more over the past five years, or 25 percent or more over the past twelve months.

"The insurance department has no direct regulatory authority over prescription drug costs," Miller testified before the House Insurance Committee in favor of the bill. "Rising prescription drug prices are a major reason premiums in the individual health insurance market rose significantly last year. In the individual market pharmaceutical drugs rose from 13.6 percent of per enrollee health care claims in 2014 to 21.4 percent in 2015, a 57 percent increase," Miller said.

The National Business Group on Health, a nonprofit association of 425 large employers, said that in 2016 specialty drugs were the highest driver of health costs.

Twitter: @SusanJMorse