As states increase legislative efforts to rein in prescription drug prices, an increased number of laws have been passed to regulate pharmacy benefit managers, price gouging, and price transparency in the pharmaceutical industry. However, industry groups have also stepped up legal challenges against these laws, using specifically the Dormant Commerce Clause, ERISA, and federal patent and trade secret laws. With support from the National Academy for State Health Policy (NASHP), The Source’s Katie Gudiksen, Sammy Chang, and Jaime King examine these state laws and ensuing legal challenges in the newly …

Many health care providers and payers seek to maintain the confidentiality of amounts paid for services as trade secrets, claiming their secrecy provides a competitive advantage. With support from the California Health Care Foundation (CHCF), The Source’s Katie Gudiksen, Sammy Chang, and Jaime King examine the legal and economic implications of collecting and releasing this data in the newly published report, The Secret of Health Care Prices: Why Transparency Is in the Public Interest.  Part I of this report reviews trade secret statutes and case law regarding the protection of negotiated …

Medicaid serves nearly one in five Americans, including many with chronic conditions, and purchases about 10% of total prescription medications dispensed in the U.S.[1] From 2013 to 2016, Medicaid’s nationwide drug spending increased almost 50%, from $22.4 billion to $33.4 billion.[2] Medicaid programs consume an increasing percentage of state budgets and threaten to overtake funding for other programs like education and infrastructure.[3] In 2018, the National Association of State Budget Officers (NASBO) estimated that Medicaid accounted for nearly 30% of total state spending and is the fastest growing component of …

Since 2005, Americans have identified the availability and cost of health care as one of their top concerns.  Health care costs have risen due to various factors, such as reliance on fee-for-service payment systems, lack of patient engagement, and lack of coordination and management.  In recent years, state legislatures have focused on increasing price transparency in the hopes that it will drive down health care costs by encouraging consumer price shopping.  One means of promoting price transparency is through the use of database tools, such as state-mandated all-payer claims databases …

This coming election, Palo Alto and Livermore voters will decide whether to cap health care pricing to 115% of direct patient care and quality improvement costs. Officially known as the Accountable and Affordable Health Care Initiative, and colloquially as Measure F for Palo Alto and Measure U for Livermore, these local initiatives face opposition from opponents who assert that federal and state laws preempt and invalidate the measures. On its face, this could have spelled the end to these measures. Preemption is a tried and true way to overturn local …

By: Grace Lee, Research Fellow Introduction Luke Whitbeck, 2, was born with Gaucher disease, a rare genetic disorder.[1] Before using the pharmaceutical drug Cerezyme,[2] “Luke frequently ran high fevers, tired easily, and was skinny all over, except his belly stuck out like a bowling ball.”[3] Fortunately, the drug effectively helped Luke manage his symptoms. His mom reports that “Luke now spends days playing with his big brother.”[4] Despite the bill of good health, the Whitbecks and their insurer struggle to pay for the high cost of the drug, which amounts …

The Creating and Restoring Equal Access to Equivalent Samples Act (or CREATES Act) is the latest attempt by Congress to intervene to prevent anticompetitive behavior in the pharmaceutical industry. The intention of the CREATES Act is “to promote competition in the market for drugs and biological products by facilitating the timely entry of lower-cost generic and biosimilar versions of those drugs and biological products.”[1] A bipartisan group of Senators introduced the most recent version of the CREATES Act into the current session of Congress on April 27, 2017, and Sen. …

Introduction As discussed in earlier Drug Money Issue Briefs, spending on pharmaceuticals is a large and growing concern in the United States and the world.  In 2013, the countries in the Organization for Economic Co-operation and Development (OECD) spent $800 billion, accounting for nearly 20% of all health expenditures.[1] Even among OECD countries, however, the U.S. stands out for large spending on pharmaceuticals.  In 2014, the U.S. spent $1,112 per capita on pharmaceuticals – more than double the average spending for the countries in the OECD and ~40% more than …

By: Katie Beyer, Student Fellow INTRODUCTION It is no secret that drug prices have been rising at an alarming rate. In fact, spending on prescription drugs rose 12.4% in 2014 and 9% in 2015.[1] In 2015, the U.S. spent $457 billion on prescription drugs, which accounted for 16.7% of overall healthcare services.[2] In 2016, Americans filled 4.4 billion drug prescriptions, at a total cost of approximately $400 billion.[3] On average, Americans spend $1,370 out of pocket on prescription drugs per year.[4] With an average annual price increase of approximately 10% over …

The United States District Court for the District of Columbia recently issued its decision in the Department of Justice’s challenge to the proposed merger between Aetna and Humana, two of the largest health insurance companies in the nation.  The complaint filed in July 2016 alleged that the merger violated Section 7 of the Clayton Act.  DOJ argued that the merger would substantially lessen competition in two markets: (1) the Medicare Advantage market in 364 counties, and (2) the ACA Exchange market in 17 counties.  The decision, issued on January 23, …