(Photo by Joe Raedle / Getty Images)
A proposal to create a state Prescription Drug Affordability Board that would have the power to review and in some cases set upper price limits on prescription drugs died a swift death Thursday in a Republican-led House subcommittee.
“This committee has heard this before,” said House Commerce and Energy Chair Kathy Byron, R-Bedford. “We are also very concerned about the cost of prescription drugs. We may not necessarily agree about the way to get at that in this short session.”
While the bill from Sen. Chap Petersen, D-Fairfax, had bipartisan support in the Senate — it picked up five Republican votes along with full backing from Democrats — it was opposed by Republican Gov. Glenn Youngkin’s administration for being too “wide-reaching.”
“We don’t think a part-time board should regulate this industry,” Deputy Secretary of Health and Human Resources James William told a House subcommittee this January before its members voted to kill a companion bill. “It’s a very sophisticated and complicated industry, and health insurers will tell you they spend a lot of time looking at the value of these medicines.”
Prescription drug prices have soared in recent years, in many cases outstripping inflation. Citing numbers from the AARP, Virginia’s Commonwealth Council on Aging noted in a September report that between 2015 and 2019, the annual cost of prescription drugs rose on average 26%, while average incomes in Virginia rose only about 17%. An analysis by the Kaiser Family Foundation found the prices of half of all drugs covered by Medicaid increased faster than inflation in 2020.
During a brief rundown of his proposal Thursday, Petersen said Virginia spends roughly $2.4 billion annually on prescription drugs, with $2 billion going to spending through Medicaid and $400 million for drugs covered through the state employee health plan.
“We have a direct interest as a state government in controlling prescription drug costs,” he said.
He also argued that because the Democrat-backed Inflation Reduction Act will allow the federal government to determine the “maximum fair price” for the most expensive drugs covered by Medicare, an affordability board would be well positioned to take advantage of that information.
But the legislation met resistance from the pharmaceutical and biotechnology industries, Virginia Manufacturers Association and Virginia Chamber of Commerce, which argued the board could have a “chilling effect” on investment in Virginia’s drug research and development industry, while overlooking other parts of the supply chain that drive up medication prices.
This session’s other primary proposal for controlling drug prices, which would have required health plans and pharmacy benefit managers to pass along 80% of drug manufacturer rebates to consumers at the time of purchase, also went nowhere. Both the House vehicle, from Del. Israel O’Quinn, R-Bristol, and a Senate version from Sen. Dave Marsden, D-Fairfax, were left in committee without leaders taking any votes.
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