Have questions about Social Security? Join AARP’s free tele-town hall for answers.

Content starts here

42 Organizations Urge Legislative Leaders to Include Comprehensive Rx Price Transparency in NYS Budget

AARP

Published March 20, 2024

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

ALBANY, N.Y. – Forty-two organizations representing the aging, communities of color, labor, physicians, clergy and more are urging New York State’s legislative leaders to include in the final 2023-24 state budget one of the most comprehensive prescription drug price transparency reforms in the nation.

The organizations joined to sign a letter (reprinted in full below) to Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie urging enactment of reforms proposed by Governor Kathy Hochul that would require drug makers to report planned price hikes in advance, expand the State’s authority to investigate proposed increases, and disclose deals that delay consumers’ access to cheaper generic drugs.

The Senate included many of these reforms in its budget proposal last week, but unfortunately the Assembly’s proposal did not include any.

The following Rx transparency issues are on the table as lawmakers and the Governor negotiate a final budget due April 1:

Require 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;
Require 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.

“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. “It would be just as outrageous if our state leaders don’t at least take the modest step of ensuring New Yorkers know what they’ll have to pay for the medications they need. And if other states’ experience is a guide, transparency could well lead to smaller and fewer price hikes in New York.”

Most Popular

There was an increase over the past three years in the number of New Yorkers 45 and older who called being able to afford prescription drugs “important” (88% in 2022 vs. 81% in 2019), according to AARP New York surveys of 1,000+ New Yorkers 45-plus in each of those years.

“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.

Already, 19 states including California, Texas, New Jersey, Connecticut and Vermont have enacted 26 drug 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.

“Nearly a third of older African Americans skip prescriptions because of the cost,” said Hazel N. Dukes, President of the NAACP New York State Conference President and a member of the NAACP National Board of Directors and NAACP Executive Committee. “That has to change. Shining a light on proposed price hikes and shady deals that keep generics from us - and investigating egregious increases - would be a great start.”

“Hispanic Federation supports the Prescription Drug Price and Supply Chain Transparency Act of 2023, which would bring transparency to prescription drug prices in New York, an important issue that directly affects the lives of so many in our community,” said Frankie Miranda, President and CEO, Hispanic Federation. “It is essential that New York’s Latino community receives culturally competent information regarding the affordability of life-saving prescription drugs. Expanding information transparency would help ensure that communities make informed and sensible decisions regarding their medications and can lead to all New Yorkers living healthier lives.”

“Too many New Yorkers report cutting pills in half or avoiding filling their prescriptions because of costs,” said Amanda Dunker, Health Policy Director at the Community Service Society of NY & coordinator for Health Care For All New York. “Governor Hochul’s Executive Budget Drug Pricing Transparency proposal would shed light on unfair industry practices that drive up costs to patients and we urge the Legislature to include it in the final budget.”

“An increase to prescription drug price transparency is a vital step to ensuring older adults can plan for their health care needs,” said Karen L. Nicolson, CEO/Executive Director of the Center for Elder Law & Justice. “The health care system is difficult to navigate, and any increase in transparency will help ease the burden of dealing with hidden fees and unplanned increases, particularly for low-income families.”

“Long Island working families and seniors are struggling due to the Coronavirus recession and the impact of inflation on their daily needs including prescription drugs,” said Eric Alexander, Director, Vision Long Island and Co-Chair, LI Lobby Coalition. “Vision Long Island supports proposals in Albany to spotlight drug price increases and anti-consumer practices that we hope will lead to more affordable medications.”

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

Contact: Erik Kriss, ekriss@aarp.org