Pa. lawmaker proposes mandatory reporting to address prescription drug affordability, access

Looking to increase transparency surrounding drug costs, a Pennsylvania Senate lawmaker has proposed mandating the public release of prices from pharmaceutical companies.

Sen. Sharif Street, D-Philadelphia, plans to introduce a bill requiring the Pennsylvania Insurance Department to collect and release data from pharmaceutical companies about the cost of each drug they produce.

“The bill seeks to address both affordability and access to critical medication, and the challenge patients, providers, businesses, government health programs, and insurers face with the rising costs of prescription drugs, especially the recent development of extremely expensive but valuable drugs,” Street wrote last week in a memo seeking legislative support for his plan.

Street’s proposal came days after President Joe Biden aimed at the issue during his State of the Union address, saying Americans “pay more for prescription drugs than any major nation on Earth.” 

Biden touted capping insulin, which helps regulate blood sugar levels, at $35 a month for seniors on Medicare but urged lawmakers to expand the measure to include all Americans who need it.

“Every day, millions need insulin to control their diabetes so they can stay alive,” Biden said during the annual speech. “Insulin has been around for 100 years. It costs drug companies just $10 a vial to make. But big pharma has been unfairly charging people hundreds of dollars — and making record profits.”

A report from the U.S. Department of Health and Human Services that tracked drug price changes from 2016 to 2022 found that 1,216 products whose prices increased from July 2021 to July 2022 exceeded the inflation rate of 8.5% during that time. The average price increase for those drugs was 31.6%, according to the report.

Others have called for manufacturers to make other life-saving drugs, such as the EpiPen, which treats severe allergic reactions, more affordable.

“These drugs are wonderful advancements in improving health care, and they may even reduce aggregate costs,” Street said. “At the same time, there is little information available to the consumer as to why they cost so much and almost no ability to negotiate price.”

If the proposal became law, meaning that it passes the House and Senate and is signed into law by Gov. Josh Shapiro, pharmaceutical manufacturers would have to file annual reports with the state Insurance Department, including costs associated with: 

• Research and development
• Clinical trials and regulatory costs
• Materials, manufacturing, and administrative expenses
• Costs paid by another entity, including governmental grants
• Other costs to acquire the drug
• The aggregate amount of manufacturer rebates

The department would then share the information with the public online. The identities of individual payers receiving rebates would be kept private.

“Lastly, the bill also prohibits contracts between pharmacies and pharmacy benefit managers or insurers from including provisions prohibiting pharmacists from disclosing information to a customer that would reduce the customer’s out-of-pocket costs,” Street said.