Lawmakers in Washington state are considering legislation that would give a governor-appointed board extra authority to curtail the price of high-cost prescription medications.
Proponents say the legislation will increase access to medicines, but industry leaders and some patient groups say it will quash innovation and may curtail availability of some drugs for state residents.
The bill “really sends a question mark as to whether or not the state is committed to the industry and understands how it works,” said Marc Cummings, CEO of the trade group Life Science Washington, who signed a letter to lawmakers along with state biotech leaders urging lawmakers to reject the bill.
The new bill (HB 1269) goes beyond a drug pricing law passed last year in the state.
That law authorized the governor to appoint a five-member board that can set upper payment limits on prescription medicines available in the commercial market, including for individual, small group and large health plans.
The new legislation broadens the scope of drugs eligible to be reviewed by the board, among other measures.
“High drug prices are a massive burden on low income and older Americans,” said bill sponsor Rep. Marcus Riccelli (D-Spokane) at a hearing this month. “This is a desperately needed tool in our toolbox.”
Washington is among a handful of states that have fresh laws establishing prescription drug affordability boards, but only the Washington and Colorado boards have the authority to set upper payment limits.
The proposed legislation also comes on the heels of national drug pricing legislation passed as part of the Inflation Reduction Act of 2022, which requires the government to negotiate prices for some drugs. Protections for industry in the federal law include provisions limiting negotiations for small-molecule drugs to those that are nine or more years past FDA approval.
Here’s how the current Washington state law and the proposed legislation are different.
- Current law: Drugs eligible for review must cost $60,000 or more per year or course of treatment, or have a price increase of 15% or more over 12 months or 50% or more over three years. Drugs must also have been on the market for seven years or more; be dispensed by a pharmacy, not a hospital or medical group; and not be approved solely for the treatment of a rare disease.
- HB 1269: Eligible drugs must cost $25,000 or more have price increases of 10% over 12 months, or 25% or more over three years. Other requirements for drug eligibility are dropped in the new bill, and the board can assess up to 24 drugs per year, up from 12. The new law also eliminates the requirement for a drug industry representative to be on the board.
Groups testifying in favor of the bill included the American Association of Retired Persons, the National Multiple Sclerosis Society and the Washington State Health Care Authority, the state agency that requested the legislation.
Linda Moran, who has multiple sclerosis, urged passage of the bill, saying that the cost of her medication has risen substantially. Moran is not alone. A 2017 study pegged the annual cost of multiple sclerosis drugs at $70,000 per year, and rising.
But representatives from the Oregon Biosciences Organization, the Biotechnology Innovation Organization and other industry groups testified that drug prices reflect massive research and development costs and that companies need guardrails to assure that they can recoup their investment.
One study in the Journal of the American Medical Association suggests that it costs on average $1.3 billion to develop a new drug.
Cummings said investors have told him that if state authorities “don’t have any recognition that developing innovative therapies is expensive, we’re not sure if Washington is a place we want to invest.’”
Washington state is a top ten life sciences cluster in the U.S. for companies researching novel therapies that come with high development costs, noted Cummings. The venture capital investment that has poured into the state’s life sciences companies reflects those costs, he said.
In their letter to legislators, industry leaders said the bill would hamper their ability to create new medicines. “Voting no on HB 1269 will protect patient access to the world’s most innovative and complex therapies,” said the letter, signed by the CEOs of Seagen, NanoString Technologies, Sana Biotechnology, AltPep, Talus Bioscience and 15 other companies.
The NW Rare Disease Coalition and other rare disease advocates also urged a “no” vote in a joint letter to lawmakers. “The proposed legislation reverses the protections explicitly included in the prescription drug affordability board’s bill passed just last year,” said the letter.
Critics are concerned that the bill may restrict availability of certain drugs in the state. Evan Klein, special assistant for legislative and policy affairs at the Washington State Health Care Authority, told GeekWire that he did not believe this would happen.
Any individual denied coverage because of a payment limit may seek a review, noted Klein. They would be able to receive the drug for above the payment limit if all other covered therapeutic options are ineffective or have “intolerable side effects,” said Klein, or if the drug is use only to treat a rare disease.
The bill has passed out of the House Committee on Health Care and Wellness and is under review by a rules committee.