WASHINGTON, D.C. – U.S. Senator Cory Booker (D-NJ) today introduced a bill to shine a light on certain tactics drugmakers employ to profit off of state Medicaid programs by influencing their drug coverage decisions. The bill follows an investigation over the summer that found that drug makers swarm state Medicaid board meetings when their drugs are under consideration and have given payments and perks to doctors serving on those boards, like free meals and consulting opportunities. For example, in Arizona, one drug review board member had received more than $700,000 worth of industry payments since 2013.
“The nefarious tactics that drug companies use to influence state Medicaid programs’ drug coverage decisions are dishonest and disturbing,” Booker said. “These tactics are all in the pursuit of one goal – making themselves more money. My bill would address this problem by increasing transparency and shining a light into the payments and perks pharma companies make to the individuals who determine the types of drugs that are included on state Medicaid programs’ preferred lists.”
"Our nation's broken drug pricing system will never be fixed while critical decisions are made in a black box and behind closed doors,” Shawn Gremminger, Senior Director of Federal Relations at Families USA, said. “This legislation takes an important step in increasing transparency so that the public knows who is making decisions that impact their ability to get the drugs they need."
Under current law, drug companies are required to disclose any payments or other perks of value made to physicians and certain other providers. But these disclosure requirements don’t apply to many individuals who serve on the review boards, including pharmacists, who by law must make up at least one-third of the membership of a state’s board.
Drug companies have a lucrative financial interest in influencing which drugs are included on a state’s preferred list under Medicaid since Medicaid covers roughly 76 million people, or nearly one out of every four Americans. These efforts are often at odds with state efforts to keep costs low.
The Medicaid Drug Decisions Transparency Act would increase transparency and shine a light into drug company payments to individuals with influence over the types of drugs preferred by states’ Medicaid programs by:
Expanding the payment reporting requirements established by the Physician Payments Sunshine Act to include pharmacists as well as individuals who serve on a state drug use review board.
Requiring states to clearly publish a list of state Medicaid drug use review board members. Currently, accurate, updated information about who serves on state Medicaid drug use review boards is difficult to find and in some cases not publicly available.
Requiring the Secretary of Health and Human Services to provide states with a summary of reported payments to members of that state’s Medicaid drug use review board.
Increase financial penalties for drug makers that fail to comply with the reporting requirements.
Today’s bill is part of Booker’s ongoing effort to lower consumer drug prices for the millions of New Jerseyans and Americans who struggle to afford their medicine. Earlier this year, Booker published a comprehensive report outlining how drug companies were not using their newfound tax savings from the GOP tax bill to lower prescription drug prices and were instead using the windfall on stock buybacks. Last year, Senator Booker introduced a bill – the Affordable and Safe Prescription Drug Importation Act – with Senators Bernie Sanders (I-VT) and Bob Casey (D-PA) that would allow Americans to import safe, low-cost medicine from Canada and other developed countries. Booker is also a sponsor of legislation that would allow Medicare to negotiate lower prescription drug prices, make it easier to get generic drugs to market, and make other key reforms to bring down high drug costs. At a Judiciary Committee markup in June, Booker voted to advance the CREATES Act – legislation to bring less expensive generic drugs to the market faster.