Lansing – State House and Senate Democrats on Monday called for creating a new “consumer protection” board to discourage prescription drug price spikes and shed light on costs they claim are “out of control” in Michigan.
Legislation set for introduction next month would require pharmaceutical companies to provide the board with explanatory documentation if they want to raise wholesale prices on a drug here by 10 percent in one year or 30 percent over five years.
Drug companies that refuse to do so would be subject to fines and penalties. If the state board determines a prescription price increase was not justified, it would direct the state attorney general to investigate the manufacturer and consider legal action, including the possible pursuit of financial penalties.
“This legislation would not only hold manufacturers accountable, it would increase transparency for drug prices,” House Minority Leader Sam Singh of East Lansing said in a press conference at the state Capitol. “So if the prices go up, you’ll know why. We know that prescription drug (prices) are out of control in Michigan.”
The Michigan proposal is the latest in a wave of state-level attempts to address prescription drug prices. It follows a 2016 transparency law in Vermont that requires officials there to identify up to 15 prescription drugs a year the state spends significant money on and then publicly disclose wholesale prices for each.
The Democratic legislation faces an unlikely future in the Michigan Legislature, which is controlled by Republicans. A spokesman for House Speaker Tom Leonard, R-Dewitt, said his boss had not yet reviewed the proposal but will look it over once it is introduced.
A spokeswoman for the Pharmaceutical Research and Manufacturers of America said the industry trade group agrees that more needs to be done to make medicine more affordable and accessible for patients, but expressed concerns with the Democratic proposal.
“Creating a new government bureaucracy to implement a requirement to provide advance notice on price increases of medicines could create interruptions in patients’ access to medicines and produce inconsistent price changes from predatory distributors and other purchasers,” Holly Campbell said in an emailed statement.
“The proposal also doesn’t require the collection or reporting of information on price decreases of medicines. It only looks at price increases, which doesn’t provide a complete picture of what happens when medicine prices decrease due to competition and expiring patents.”
While the pharmaceutical industry trumpets health care innovations, drug companies have faced intense criticism in recent years.
The maker of EpiPen emergency allergy injectors came under fire last year when two-pack prices surged to more than $600 in the United States, up from about $100 in 2007. The England-based Mylan NV last week reportedly reached a $465 million deal to settle allegations it overbilled Medicaid for a decade.
The proposed Michigan board could not independently control prices, but Democrats said their legislation aims to curb arbitrary increases. It would require pharmaceutical companies to show how costs are determined and where money is spent.
“These types of protections need to be done on the state level because Washington, D.C., is obviously not making it work,” Singh said.
The proposed 13-member board, appointed by the governor with input from the Legislature, would include consumers, drug purchasers and state department heads.