BISMARCK — In an effort to lower the cost of prescription drugs across North Dakota, lawmakers are considering a bill that would require manufacturers to report the price of prescription drugs to the state.
The transparency bill, which was introduced to the North Dakota House Health Care Committee on Wednesday, Jan. 6, comes as drug prices nationwide are exponentially increasing. The bill, introduced by Legislative Management on behalf of the House Health Care Committee, would require drug manufacturers to report to the North Dakota Board of Pharmacy each quarter the list price of the approved drugs it sells in the state.
The bill would affect drug manufacturers, pharmacy benefit managers and health insurance companies that all work together in a complicated web to determine what a consumer pays upfront when picking up medication, according to the Wall Street Journal.
Traditionally, a manufacturer sets a list price for a drug for which they will also provide a financial rebate for the insurance company. A pharmacy benefit manager profits a part of the rebate while giving the rest to the health insurance provider, which primarily use the rebate to allow the consumer to pay less in health insurance premiums or copays.
The North Dakota transparency bill would also require pharmacy benefit managers, as well as companies that act as intermediaries between wholesale manufacturers and health insurance companies to negotiate prices and distribute rebates, to submit a yearly report that documents rebates and other payments to and from manufacturers and health insurance companies.
Additionally, the bill would require health insurers to submit a yearly report to the Board of Pharmacy with the most frequently prescribed medications in the last two years and the drugs that generated the most gross income for insurers.
If these entities decide to not comply with the bill's requirements, they could face up to a $10,000 fine from the state.
"There's lots of concerns with drug prices in the public and there should be," said Mark Hardy, executive director of the North Dakota Board of Pharmacy.
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In North Dakota, the average annual cost of a prescription increased by almost 60% between 2012 and 2017, according to the AARP.
In 2020, about 25% of North Dakotans reported not fulfilling a prescription in the past two years, according to a survey conducted by AARP North Dakota. About 44% of those adults didn't fill their prescription because of how much the drug cost, according to the survey.
"We believe transparency from manufacturers, (pharmacy benefit managers) and insurance companies can help the state and consumers get a handle on these increasing prices and be prepared for when things are going to change," said Josh Askvig, AARP North Dakota's state director, in his testimony.
At least 12 states have passed drug transparency laws, according to the AARP.
Opponents to the bill include major drug conglomerates, like PhRMA, who argue that by making companies report the cost of their drugs, it will give their competitors information that would inevitably drive up the market and the price of prescriptions.
In addition, companies that testified against the bill said it would deter innovation in creating new drugs and treatments for people dealing with diseases.
Multiple representatives for pharmacy benefit managers and drug companies argued that the bill does nothing to help drive down the cost of the drug.
"The legislation does nothing to address how much consumers ultimately pay for a medicine, an amount determined by insurers, not biopharmaceutical companies," PhRMA said in testimony against the bill. "This legislation should do something to help patients afford their prescription medicines, such as passing on the rebates directly to the patients at the point of sale at the pharmacy counter."
Hardy said whether disclosing the price of drugs to the public will actually affect the drug's price in the long run is a matter of opinion, and the Legislature will need to determine if transparency will ultimately lead to lower prices.
"I think the Legislature may struggle to determine the right course of action," Hardy said.
Readers can reach Forum reporter Michelle Griffith, a Report for America corps member, at firstname.lastname@example.org.