Vermont Business Magazine - In an effort to build on health care cost containment efforts that have been a priority since he came to office, Governor Peter Shumlin has signed a law to make Vermont the first state in the US to require greater transparency of drug manufacturers when they increase the prices of prescription medications. Under the legislation (S216), insurers will be required to provide Vermonters with information about how much prescription drugs will cost out of pocket. The law also requires state health care regulators to develop a yearly list of the top fifteen drugs that have yielded the highest price increases. Manufacturers of those medications would then be required to justify the increase to the Attorney General’s Office.
“This bill is about accountability," Governor Shumlin said. "The reality is that we have pharmaceutical companies raising prices on lifesaving drugs five thousand percent. When asked about those outrageous increases, CEOs are literally laughing in front of Congress. That needs to change.”
Martin Shkreli screen grab courtesy of governor's office.
Earlier this year, Turing Pharmaceuticals’ former CEO, Martin Shkreli, was called before the Congress to testify on the increase of Daraprim, a lifesaving drug from $13.50 a pill to $750 a pill. Shkreli, known for shocking Congress and the public by smiling throughout the proceedings, repeatedly invoked the Fifth, refusing to answer questions regarding the price increase.
Representative Peter Welch was one those Members of Congress who questioned Shkreli. Welch has long been a leader in Congress when it comes to establishing price transparency within the pharmaceutical industry and has introduced federal legislation to do it.
The new law builds on Shumlin's efforts to control health care costs in Vermont. With the help of the Green Mountain Care Board, established by legislation the Governor pushed for and signed in 2011, the average rate of hospital budget growth has been held at historic lows for each of the last three years. That has been accomplished while expanding health care to 19,000 individuals, making Vermont tied for the lowest uninsured rate in America.
“Once again Vermont is leading the nation,” Rep. Peter Welch said. “Thanks to Governor Shumlin and the Vermont General Assembly for making Vermont the first state to shine a light on exorbitant prescription drug pricing. The market for prescription drugs is fundamentally broken. This new law will be a boost to my efforts in Congress to bring transparency to the pharmaceutical industry and make prescription drugs more affordable for consumers across the country.”