Price transparency is the magic bullet to healthcare cost control
More and more states are stepping into the pharmacy transparency issue. On June 2, Vermont passed compromise legislation requiring the drug makers of 15 of the most costly drugs to show cause for their high prices. And both Ohio and California have pending bills (Massachusetts’ legislative effort was rebuffed) that would require drug companies to reveal more about drug costs and how those drugs are priced. States are seeking justification from drug companies for the high prices they charge.
Lobbyists are pushing hard and pharma is generally one of the greatest contributors in political campaigns. In California alone, the pharmaceutical industry already spent $70 million opposing Proposition 61 and coordinated an effort with medical groups and consumers to oppose the bill on the grounds that it would be a detriment to the best care.
Two independent health policy organizations — Health Care Incentives Improvement Institute and Catalyst for Payment Reform — released a 2016 Report Card on State Price Transparency Laws. Just seven states received a passing grade.
The stakes are high on both sides. Pharma very quickly anted up $80 billion to ease the impact of the Affordable Care Act on their industry, but I don’t think they will be able to escape this round of uproar. The microscopes are focusing on pharma as a big part of the problem in controlling healthcare costs and the solutions will be painful for them.
Transparency is the key to affordability. Lasik surgery, which is not covered by most health plans, has gotten better and cheaper because consumers who are paying the bill demand to know the prices. High-deductible plans are broadening the focus to all healthcare costs. So the ocean liner is turning. I feel it.