Last week, Vermont became the first state to require pharmaceutical companies to justify price hikes for medicines, but drug makers may try to avoid the law's reporting requirements, according to STAT.
Under the new law, state officials will identify 15 drugs for which "significant healthcare dollars" are spent, and where list prices rose by at least 50 percent over the previous five-year period. Alternatively, state officials must identify list prices for 15 drugs that rose by 15 percent or more over a 12-month period.
Subsequently, the Vermont Attorney General will reach out to each drug maker to obtain justification for the price increases, and the companies will then have to submit information on all factors that contributed to the price hikes.
According to STAT, there is speculation that pharmaceutical companies may try to avoid explaining price increases for medicines by staying below the law's thresholds when raising prices. To avoid meeting the thresholds, companies may set list prices for drugs higher than originally envisioned, John LaMattina, a former head of R&D at Pfizer and now a senior partner at PureTech Health, a venture capital firm, wrote in his blog. However, that tactic may not be effective if physicians or payers believe the prices at which drugs are introduced cannot be easily justified, according to STAT.
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