Important updates to state drug price transparency reporting requirements in 2022

Since 2016, several states have designed laws and enforcement mechanisms to bring transparency into the pharmaceutical manufacturers’ pricing processes. In the past five years, the industry has seen an amplification of these requirements across the country with 21 states that now have defined requirements to report on pricing, costs, product development and sales of prescription drugs within the state. Manufacturers will likely continue to see updates and expansions to state drug price transparency reporting requirements throughout the coming year.

At Baker Tilly, our life sciences consulting team carefully monitors updates for state drug price transparency reporting on a regular basis. To help life sciences companies as the new year begins, we have summarized recent updates effective in 2021 and early 2022. All developments noted below reflect changes to existing state laws.

Colorado

CO SB175 - Effective Jan. 1, 2022

The state will establish the Colorado prescription drug affordability review board. The board is tasked with identifying (1) any prescription brand-name drug or biological with a wholesale acquisition cost (WAC) of $30,000 or more for a yearly supply or a WAC increase of 10% or more over the past year; (2) any biosimilar with a WAC that is not at least 15% lower than its corresponding biological product; and (3) any generic drug with a WAC of $100 or more for up to a 30-day supply or single dose which has undergone a 200% WAC increase over the preceding year. The board will have jurisdiction to collect any information pertaining to the manufacturer’s selection of the introductory price increase and can set upper limits on drug prices. Manufacturers should note that information collected under SB175 is confidential.

Maine

ME LD686 - Effective Jan. 1, 2022

The new legislature authorizes the Maine Health Data Organization (MHDO) to post a list of prescription drugs for which the manufacturer has (1) increased the WAC of brand-name drugs by more than 20% per unit; (2) increased the WAC of generic drugs that cost at least $10 by more than 20% per unit; or (3) introduced a new drug to the state’s market which has a WAC greater than the Medicare Part D specialty drug threshold of $670 currently for a 30-day supply. This threshold may change in 2022 to $780. The MHDO will also post a list of drug families for which it may request pricing component data. Information collected under LD686 will be kept confidential except for the aggregate of collected data and information shared with the Maine Bureau of Insurance as necessary to carry out the bureau’s duties.