[G]ov. Peter Shumlin signed the prescription drug transparency bill that will make Vermont the first state to require pharmaceutical companies to justify why their drug prices go up.
“This bill is about accountability,” Shumlin said in a statement. “The reality is that we have pharmaceutical companies raising prices on lifesaving drugs five thousand percent. When asked about those outrageous increases, CEOs are literally laughing in front of Congress. That needs to change.”
The news release referenced Martin Shkreli, the embattled pharmaceutical executive who served as chief executive officer of Turning Pharmaceuticals when the price of a drug that treats malaria rose from $13.50 per pill to $750 per pill.
Vermont’s new law, which started as S.216, will require pharmaceutical manufacturers to justify why the “total wholesale cost” of specific prescription drugs go up in a given year. The data on the cost of the drug would come from the state’s Medicaid program.
The Green Mountain Care Board would work with the Department of Vermont Health Access to develop an annual list of the 15 drugs whose prices are either very high or went up significantly for the state’s Medicaid program.
Manufacturers would need to disclose “all the factors that have contributed to a price increase” and justify the increases to the Attorney General’s Office, which could take the companies to civil court if they decline to provide the information.
Vermont is the first state in the nation to require such transparency. When S.216 passed the House unanimously on April 26, more than a dozen other states were considering similar laws, but none had been voted out of the relevant committees.
Rep. Chris Pearson, P-Burlington, sponsored the similar legislation in the House. “It’s outrageous that one out of five Vermonters cannot afford to fill the prescription their doctor writes for them,” Pearson said. “We know the only way to bring costs down is through federal action and Sen. Sanders and Congressman Welch have been leading the fight. Hopefully S.216 will help, and Vermont can begin to hold big pharma accountable. Transparency is often the first step to controlling costs and our action this year should prompt other states to follow our lead.”
“The market for prescription drugs is fundamentally broken,” Rep. Peter Welch, D-Vt., said. “This new law will be a boost to my efforts in Congress to bring transparency to the pharmaceutical industry and make prescription drugs more affordable for consumers across the country.”
“Once again Vermont is leading the nation,” Welch said. “Thanks to Governor Shumlin and the Vermont General Assembly for making Vermont the first state to shine a light on exorbitant prescription drug pricing.”
The law will also require Vermont’s Medicaid program to use a drug pricing formula called 340B to save money on prescription drugs, and require health insurance companies to provide information for consumers on what they may need to pay for their prescriptions.
