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Maryland Could Become First State To Cap Prescription Drug Costs

WAMU 88.5 

By Ellen Yu

January 22, 2019

As prescription drug prices are on the rise, Maryland lawmakers are trying to address the costs a new way — by creating a state board that would set rates for certain prescription drugs.

The proposal, if passed, could meet legal opposition from the pharmaceutical industry, but advocates say many in the state have been struggling to pay for their medication.

Three years ago, Rachel Lash was a junior in college when she started having symptoms she couldn’t explain. She was constantly thirsty. She was going to the bathroom about four times an hour. She fell asleep in class. And then one night, her stomach hurt so much she couldn’t sleep, and she started throwing up.

“It was like a pain all over,” Lash, now 24, said. “It was just so scary. It felt like I was dying.”

She called her dad, who told her she needed to get to the hospital. In the ambulance ride over, she remembers an EMT giving her an IV and hearing him say that her organs could be in the process of shutting down.

He asked her if she was diabetic.

“I said ‘No!’ Because I had no idea what was going on,” she said. No one in her family had diabetes.

But Lash’s blood sugar level was at around 800 — dangerously high. A doctor told her normal levels were between 75 and 120. Lash spent five days in intensive care and was diagnosed with Type 1 Diabetes. That means her body can’t produce its own insulin, and she needs to take insulin every day of her life.

But prices of the drug have been going up in the years since her diagnosis. When she called to get her prescription last year, she was shocked at the price. It was going to cost her more than $1,200 for a three-month supply of insulin.

“I was freaking out the whole time because I thought we’re not going to be able to afford this. This is crazy — like, I’m not going to get insulin.”

Lash ended up paying for it with her parents help. She currently lives with them in Rockville, Maryland, because her medical costs are so high.

A Prescription Drug Affordability Board

One in four people who take prescription medicines say they have difficulty affording them, according to a poll by the Kaiser Family Foundation.

That’s why Maryland Del. Joseline Peña-Melnyk (D-Prince George’s and Anne Arundel) again plans to introduce a bill aimed at regulating drug costs.

“It’s ridiculous,” said Peña-Melnyk. “People should be able to afford their prescription, without giving up whether they’re going to pay a bill, whether it’s their mortgage, or whether it’s their meal.”

Her legislation would set up a Prescription Drug Affordability Board. It would review the cost of certain drugs and be able to set a cap for what customers — like insurance companies — pay for them. A similar bill failed to pass last year in the Maryland legislature. She agrees it’s somewhat uncharted territory.

“I think Maryland has set a model for many policies,” she said.

Peña-Melnyk said Maryland already has a one-of-kind commission that sets payment rates for hospital services.

The bill, which hasn’t been filed yet this year, would require drug companies that introduce a brand name drug that costs more than $30,000 a year or over the course of a treatment to justify the price. The board would review the costs, and could set an upper payment limit on the drug.

Peña-Melnyk understands the proposal could face legal challenges. But she said she believes the legislation would be constitutional because the drug board wouldn’t be setting prices – instead it would be setting payment rates. For instance, if a drug costs $3,000 a month, the board would review and could cap rates to something they deem more affordable if they believe the cost isn’t justified.

“You can’t just sit and be afraid of doing something because you think it’s going to be challenged. That is the threat,” she said.

The legislation has received support from several Maryland county executives, including Prince George’s County Executive Angela Alsobrooks and Montgomery County Executive Marc Elrich.

Proposal Raises Legal Questions

Opponents say the proposal, if passed, would affect the ability for pharmaceutical companies to do research and provide patients with innovative drugs.

“What’s being discussed amounts to giving the government broad authority to dictate prices, and we think that’s the wrong approach,” said Nicholas McGee, director of public affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA).

“We feel the focus should be more on policies that enhance the competitive marketplace,” McGee said, saying that competition will help drive down costs.

As for high drug costs at the pharmacy, McGee says points to insurance companies and other middlemen who he says are shifting the costs to patients. But advocates argue that’s happening because drug prices are too high to begin with.

Rebecca Wolitz, a fellow at Stanford Law School’s Center for Law and the Biosciences who studies drug price regulations, said a Maryland rate-setting proposal would almost certainly be met with legal challenges.

“We could probably expect to see a patent challenge among other different kinds of legal considerations that seem to crop up when states try to do something in this space,” Wolitz said.

“I think there is a logical distinction between regulating prices and regulating what payers can pay. The key question, I believe, from a patent perspective is whether or not that regulation of what payers can pay ends up interfering with the rights provided through a patent,” she said.

In 2017, Maryland lawmakers passed a price-gouging bill that allowed the state’s attorney general to sue drug companies for hiking up prices, but a district court judge struck down the law. Maryland Attorney General Brian Frosh is currently appealing that decision to the U.S. Supreme Court.

‘I don’t want to be one of those people who die.’

For Rachel Lash, the rising price of insulin upended her post-graduation plans.

“My original plan I think was what a lot of people want to do. Graduate, get a job and move out.”

She’s covered under her parents insurance plan until she’s 26. But she’s worried about what could happen after. She’s heard stories of people struggling to pay for their insulin, rationing it and dying as a result.

“[I] don’t want to be one of those people who die because you can’t afford to live their lives,” Lash said.

She hasn’t been following the legislation in the Maryland legislature very closely, but what she does know is that she wants prices to go down, however that happens — so she can move out and have some sense of security for what’s to come.