View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Pricing and Market Access
November 8, 2016updated 02 Nov 2021 3:27amPowered by GlobalData

The Other vote today – Will the future of US drug pricing be decided? Will we see interstate parallel imports and interstate reference pricing?

By Gustav Ando

Click here to access GlobalData’s Market Access and Pricing Services

For the global pharmaceutical industry, today marks a watershed moment that will have profound implications for its future. Clearly, pricing of pharmaceuticals has figured prominently in the US election – controversies surrounding the pricing strategies at companies such as Turing, Valeant and Mylan have reached the highest political levels…and indeed Secretary Clinton has outlined a comprehensive healthcare reform program that includes components of comparative effectiveness and price transparency that have a significant chance of being passed if she is elected.

However, there is another major vote today that could have just as much an influence on the future of the US pharmaceutical industry: in California, there is a ballot on Proposition 61, which would require state agencies to pay no more for pharmaceuticals than that paid by the US Department of Veteran Affairs (VA), which typically has the lowest prices available in the US.

By some estimates, it is the most costly ballot in US history, which gives some indication of what is at stake here – and indeed the industry has spent far more on this ballot than the entire amount donated by the healthcare industry to the US Presidential candidate campaigns. While early polls showed a significant lead for supporters of the Proposition, it now appears to be neck to neck, so the industry continues to hold its breath.

And while California by itself, as one of the largest economies globally, represents a major market for the pharmaceutical industry, the greater fears come from the potential ripple effects of the measure across US states – it could trigger a sort of domestic interstate reference pricing system, or interstate parallel importing. Certainly, more state agencies in other states will be keen to find similar prices to what California could achieve if the ballot is passed. At the same time, it may trigger an incentive to revise pricing with the VA in order to maintain a higher reference point. Indeed, veterans feature prominently on “No on Prop 61” billboards across California, urging voters not to increase their prescription drug costs – a message supported by over 30 different veterans organizations.

If Clinton wins, there could be a double-whammy where drug price reform is being driven both at the federal and state level…and if the ballot does not pass but Clinton still wins, there is still a strong likelihood that the topic of drug pricing will stay high on the political agenda and reform driven through from a different angle. Certainly, the industry is nervous – and it should be.

Related Companies

Click here to access GlobalData’s Market Access and Pricing Services

Topics in this article: ,
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Friday. The pharmaceutical industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy


Thank you for subscribing to Pharmaceutical Technology