VT gets drug companies to explain prices

Vermont has successfully compelled drug companies to explain rising prices — but the information will be kept from the public.

According to a new report, the Vermont Attorney General's Office received information from companies that make 10 drugs, including the life-saving allergy drug EpiPen, whose wholesale acquisition cost doubled over five years, and a generic antibiotic called doxycycline hyclate whose price grew 50-fold over the same period.

All companies submitted some information justifying their price increases, Assistant Attorney General Jill Abrams wrote in a report this month. Some provided additional details over the phone.

Vermont was the first state to pursue this information. Similar bills in other states were scuttled after intense lobbying by the pharmaceutical industry.

"Pricing right now is very much a black box," said Leigh Purvis, director of health services research in AARP’s Public Policy Institute in Washington, D.C., which supports the Vermont law.

Shumlin plays both sides with EpiPen maker

"Just the fact that the industry complied with little old brave Vermont I think could be seen as a victory," said state Rep. Christopher Pearson, P-Burlington, who championed the drug price transparency law.

A spokeswoman for the Pharmaceutical Research and Manufacturers of America called Vermont's law misguided because it ignores the health care savings that come from medicine.

“We recognize and share the concerns patients have about the increasing amounts they are being forced to pay out of pocket for their medicines," said Priscilla VanderVeer, a spokeswoman for PhRMA. "Unfortunately, legislative efforts such the one in Vermont will not do anything to help patients afford their medicines."

Vermont's drug price transparency effort was designed to shield drug companies' secrets from exposure through an exemption in the state public records law.

Only the Attorney General's Office can see the confidential information that drug companies submitted. Everyone else has to rely on the broad summary report written by Abrams.

Some manufacturers blamed price increases on factors such as research and development costs, ingredient cost, return on investment and "the economic value to patients given the effectiveness of the drug," Abrams wrote. She added that drug companies disagreed with the metric Vermont used to measure cost increases.

In an interview, Abrams declined to identify the cost-driving factor most commonly cited by the drug companies.

Pearson, who was elected to the Senate in November, is satisfied with Vermont's new drug transparency effort, despite the lack of public disclosure. At least someone in state government is reviewing the cost information, he reasons.

"We always knew there was a tension with trying to get this information and having anything meaningful be public," Pearson said, adding later: “This was never seen as a single step that would solve all the world’s problems."

Pearson hopes other states will follow suit and pressure Congress to take action on a national level.

U.S. Sen. Patrick Leahy, D-Vt., said in a statement that Vermont's new law helps him to push for reforms in Congress.

“Vermont is not going to be able to have the kind of influence it’s going to take to bring the industry around on its own," Pearson said.

This article was first published online Dec. 7, 2016, and has been updated.

Contact April McCullum at 802-660-1863 or amccullum@freepressmedia.com. Follow her on Twitter at @April_McCullum. 
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