Governor, Senate Propose Rx Price Reforms Amid Voters Skipping Meds, Worrying About Costs; Assembly Silent

By AARP NY | March 29, 2023

Governor, Senate Proposals Would Require Advance Reporting of Price Hikes & Address Shady Rx Industry Deals

ALBANY, N.Y. – With a national survey showing about 20% of registered voters skipping prescription medications and nearly 60% concerned about prescription drug costs, the New York State Assembly is balking at including in the new state budget due April 1 comprehensive prescription drug price transparency reforms proposed by Governor Kathy Hochul and the State Senate.

Drug prices have skyrocketed since the 2021 national AARP survey of registered voters 50 and over, which found 18% of African American and 22% of Hispanic and Latino voters skipped medications – citing cost as the primary reason – while 60% of both groups worry about cost.

The Governor and State Senate support requiring drug makers to publicly report proposed price increases in advance, expand the State’s power to investigate proposed price hikes, and go after shady deals that delay consumer access to cheaper generic versions of drugs. The Assembly did not include any such reforms in its state budget proposal.

Around the nation, 19 other states have enacted 26 prescription drug transparency laws, and the evidence shows those laws result in fewer and lower price hikes.

“It’s nothing short of outrageous that Americans continue paying three times more for the same prescription drugs as people in other countries while prices here continue skyrocketing,” said AARP New York State Director Beth Finkel. “AARP New York calls on the State Assembly to join the Governor and Senate in taking this important step of ensuring New Yorkers know what they’ll have to pay for the medications they need.”

Governor Hochul and the State Senate propose:

Requiring prescription drug manufacturers to report price increases in advance, including the reasons for the increase and a requirement to provide consumers – and state taxpayers, who pay $9 billion in prescription drug costs every year – advance notice of proposed prescription drug price hikes, and;
Requiring disclosure of or a ban on ‘pay for delay’ deals by which brand name drug makers pay generic manufacturers to keep their cheaper generic versions off the market for nearly 17 months on average, according to the Federal Trade Commission. With generic drugs as much as 85% less expensive than brand name drugs, delaying access to cheaper versions amounts to a price hike – costing American consumers as much as $37 billion a year, according to researchers. In fact, some experts believe that ‘pay for delay’ deals are “evolving” to include categories of value transfer less likely to attract antitrust scrutiny.

Recently, AARP New York and 41 other organizations representing communities of color, the aging, labor, physicians, clergy and more sent a letter to Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins urging enactment of the Governor’s proposed reforms as part of the new budget.

“The Governor’s proposal represents one of the most comprehensive prescription drug price transparency initiatives in the nation as it combines far-reaching drug price increase reporting requirements with mandatory disclosure of ‘pay for delay’ agreements, which keep consumers from accessing cheaper generic versions of drugs for 17 months on average, according to the U.S. Federal Trade Commission,” the letter says.

The Governor’s plan would empower the New York State Department of Financial Services to investigate drug manufacturers’ assertions as to reasons for price increases, building upon the agency’s existing authority to investigate certain price spikes.

California, Texas, New Jersey, Connecticut and Vermont are among the 19 states to enact transparency laws. Vermont reported an almost 80% decline in the number of price increases of 15% or more for its taxpayer-funded Medicaid program between 2016 and 2020. Oregon’s transparency law resulted in 70% fewer reports of price increases over its threshold of 10% or higher for drugs priced at $100 or more in the first year, from 2019 to 2020.

Not only could transparency tamp down price hikes, but advance knowledge of increases would arm consumers with the prescription price information they need to choose the right health plans for them.

AARP New York will continue working to stand up for consumers and start opening the books on the big drug companies.

About AARP

AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence and nearly 38 million members, AARP strengthens communities and advocates for what matters most to families: health security, financial stability and personal fulfillment. AARP also produces the nation’s largest circulation publications: AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org, www.aarp.org/espanol or follow @AARP, @AARPenEspanol and @AARPadvocates, @AliadosAdelante on social media.