Should US states control drug prices?

At the national level, drug pricing continues to be a hot button issue for lawmakers, drugmakers and patients in the USA.

For many years, successive administrations have proposed a range of regulatory reforms designed to contain what some regard as excessive drug prices, with Congress typically unable to agree on a way forward.

Meanwhile, at the state level, regulators have sometimes taken matters into their own hands, with the concept of the Prescription Drug Affordability Board (PDAB) gaining traction in some cases.

These may take different forms, with members of the board typically being appointed from a range of stakeholders. 

The board is then tasked with reviewing the cost of higher priced products and proposing a suitable reimbursement scheme for review by the state legislature or governor.

In Maine, for example, the PDAB reviews medicines that are difficult to afford, costing more than $30,000 per year, or $3,000 for generic medicines, when they increase in price by a certain amount.

But many in the industry point out that research and development is expensive, arguing that low levels of reimbursement could threaten to cut off the engine of innovation.

And the fact that most new medicines originate in the USA, and are approved there first, suggests that something about the model is working well.

Discussing these issues in episode 11 of The Pharma Letter Podcast is Debbie Hart, chief executive of BioNJ, a group representing the biotech industry in New Jersey.