Drug price transparency for life sciences companies: an analysis of the current and future state

Drug price transparency is a hot topic of conversation in the life sciences industry. In many ways, the roll-out of drug price transparency laws resembles the early evolution of spend transparency laws, which increased significantly over the last 10 to 15 years. The biggest driver of expanding drug price transparency reporting is increased public scrutiny over the high price of prescription drugs. Price transparency is largely a bipartisan issue, as politicians from both sides of the aisle feel pressure from constituents to rein in drug prices. These factors and others have created somewhat of a “perfect storm” at the moment.

The recent history of drug price transparency

In 2017, only six states had drug price transparency laws. Three years later, that number has increased to 18 states – and the trend appears likely to continue.

When spend transparency reporting began, it too started at the state level due to a lack of any applicable federal standard. Additionally, public scrutiny generated a bulk of the momentum around the issue of increased visibility into payments between industry and the health care community. Other similarities between the early days of spend transparency and the current drug price transparency climate include:

• Different requirements: Various states have conflicting transparency requirements.
• Vague guidelines: Companies everywhere are confused about the regulations.