Senate OKs drug affordability board bill opposed by Youngkin administration
Legislation failed to make it out of House subcommittee
A Publix pharmacy manager retrieves medication. (Joe Raedle/Getty Images)
A proposal to create a state board to review and in some cases set upper price limits on prescription drugs cleared the Virginia Senate on a bipartisan 26-13 vote Friday but faces dim prospects in the House after opposition from Gov. Glenn Youngkin’s administration.
Legislation from Sen. Chap Petersen, D-Fairfax, to set up a Prescription Drug Affordability Board like those approved in recent years by Maryland and Colorado has moved briskly through the Senate this session, picking up votes on the floor from Republicans as well as Democrats.
Petersen, who put forward and then withdrew a similar proposal last year, has cast the board as not only a way to bring down soaring prescription drug costs but a timely state tool that can leverage new information that will become available under the Inflation Reduction Act about what the federal government considers the “maximum fair price” for the costliest drugs covered by Medicare.
“It’s still kind of an idea that’s taking shape,” Petersen told a Senate committee this January. “But the key part is, now that we have the federal law regarding the [upper price limits], for the first time we’re going to have the information about what a fair market price is for these very expensive drugs which are on the market and which are being paid for by our constituents.”
The bill has garnered support from groups ranging from the state AARP chapter and Virginia Association of Counties to the Virginia Catholic Conference and advocacy group Freedom Virginia.
“We are in a time of historic inflation, and even with the 8.6% inflation we’ve seen, the price of prescription drugs has far outpaced that,” said Jared Calfee, an associate state director for AARP Virginia. “These kind of price increases are unjustifiable, and they’re unsustainable, and they’re causing harm.”
But the idea has also marshaled powerful opposition from the pharmaceutical and biotechnology industries, Virginia Manufacturers Association, Virginia Chamber of Commerce and the governor’s office. These groups say by focusing only on drug manufacturers, the board overlooks other parts of the supply chain that drive up medication costs while also discouraging investment in Virginia research and development.
When biotech companies “look at siting clinical trials and investing research dollars, they look at the environment, and a Prescription Drug Affordability Board chills that environment,” Scott Johnson, a lobbyist for the Virginia Biotechnology Association, told a House panel that ultimately rejected the proposal last month.
Chris White, a lobbyist for the Pharmaceutical Research and Manufacturers of America, a trade group for the pharmaceutical industry, said drug manufacturers “agree that keeping health care costs low for Virginians is a shared goal” but believe a price oversight board “is not the right vehicle for achieving that board.”
Instead, he told the House subcommittee, “a more prudent course of action would be to see how the feds are implementing this policy” under the Inflation Reduction Act “before moving forward on legislation like this.”
Youngkin’s “strong” opposition to the idea, however, may prove most consequential in the Republican-controlled House, where Petersen’s bill is headed after the crossover deadline next week when each chamber must complete its own work and hand over to the other what’s survived.
The administration, which speaks frequently about the need to bring down kitchen-table costs for consumers, has criticized the legislation for being too “wide-reaching.”
“We don’t think a part-time board should regulate this industry,” said Deputy Secretary of Health and Human Resources James Williams to the House Jan. 24 in the administration’s first public statement of its stance on the bill. “It’s a very sophisticated and complicated industry.”
Petersen, who had pitched his proposal to Youngkin ahead of the session in hopes of finding common ground, said the governor’s opposition “did not exactly make my day.”
“I was surprised as anybody when the administration stood up,” he said. But, he continued, “if the bill gets defeated, the idea is not going away, and I think you would see us bring it back. I think you would see it come up in the election cycle.”
Alternative proposals this session that aim to reduce drug costs by requiring health plans and pharmacy benefit managers to pass along 80% of any drug manufacturer rebates to consumers at the time they purchase the medication remain tied up in committee.
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