The pharmaceutical industry does not like Gov. Andrew Cuomo’s proposals to control drug prices.
The Pharmaceutical Research and Manufacturers Association this week launched a campaign to encourage state lawmakers to reject the plan, which would cap prescription drug costs for both Medicaid and private insurers. PhRMA claims the price control proposals threaten New York jobs and innovations — and may be illegal.
On a new PhRMA website called New York Health Works, PhRMA claims the a federal court struck down a similar law in Washington, D.C. The federal government, not the state, determines Medicaid drug prices. Penalties that the state wants to impose could not be enforced, it states.
Cuomo spokesman Richard Azzopardi said the state is within its authority to enact the governor’s proposals.
“The Governor is fighting for the middle class and seniors who are getting crushed by out of control prescription drug prices and he makes no apologies for it,” Azzopardi said. “When Big Pharma cracks open its wallet to oppose your reforms, you know you’re doing something right.”
Cuomo’s prescription drug plan comes as soaring prices for several brand-name drugs have dominated public attention. Prices for the auto-injector allergy antidote EpiPen, for instance, rose 500 percent since 2007, to around $600 for a two-pack.
Part of the governor’s 2017-18 proposed budget, the plan seeks to leverage New York’s status as a major purchaser of drugs through its Medicaid program to put a lid on prices. The proposal would also place a cap on drug sales, requiring manufacturers to pay a surcharge when prices exceed the cap. Revenues from the surcharges would be distributed to health insurers to reduce premium costs in the following year.
Pharmacy benefit managers, which negotiate drug prices for health insurers and employers, would also come under scrutiny. The middlemen would be required to disclose financial incentives or benefits for promoting certain drugs.
While the state claims this would save taxpayers money, PhRMA argues that the proposal does not consider the costs of implementing the plan. The unilaterial cost controls would require new computer systems as well as the addition of highly skilled staff.
In addition, PhRMA argues the proposal fails to take into account the cost of research and development of drugs, including tests of safety and effectiveness on patients.