In recent years drug costs have grown far
faster than other health care services, last year growing 8.1% compared to
overall health spending growth of 4.8%. Forty five new drugs were approved in
the US last year, up from 41 the year before and 27 in 2013. Those increases
are straining government budgets, squeezing out resources for other priority
areas. When asked about their top concerns affecting Medicaid spending, state
officials most often cite pharmaceutical costs. As Congress has not been able
to act to control costs, states are moving into the gap. Drug costs and prices
are complex and much is hidden from view, which makes finding solutions
difficult. While many states are considering drug price transparency
legislation, this June Vermont became the first state to pass a law requiring
drug companies to explain large price increases. In response to questions from
state and provincial policymakers, CSG-ERC has published Vermont’s
Drug Transparency Law: A Promising Work in Progress. The brief explores how
Vermont’s law evolved, what it includes, how Vermont was able to pass
legislation over the objections of a very strong lobby, where the process stands
now, and what state leaders hope to accomplish with the information.
