Top health industry issues of 2018

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Price transparency moves to the statehouse

Following the trend that has accelerated in recent years, states in 2018 will continue to address rising healthcare costs through pricing and transparency initiatives. No longer content to merely ask manufacturers or providers to report their costs, states are considering and passing new laws to directly control prices and shine light on cost changes. 


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Karen Young, PwC, US Pharmaceutical and Life Sciences xLoS leader, talks about state legislative efforts

HRI’s analysis of state legislation finds that out of 75 healthcare pricing bills considered in 2017, 21 passed. In 2016, only 15 such bills out of 72 passed. The increase suggests pricing efforts are gaining traction in statehouses (see Figure).  Most bills required manufacturers to report a drug’s cost and explain price changes—though payers and providers are increasingly being asked to report similar information. Similarly, new statutes directed at PBMs require them to control copayments, a move that can benefit manufacturers by making products more affordable to patients.

California law requires that manufacturers alert insurers before raising a drug’s price and explain the increase. It is possibly the strongest pricing transparency legislation yet passed at the state level and was widely supported by consumer groups, business interests and payers.1

Several states are instituting price controls and requiring more clarity on hospital costs. Successful initiatives in Maryland, New York and Vermont are changing not only the states’ approach to drug transparency but also the responsible parties’ responses.2 Likewise, Florida’s patient’s bill of rights laws passed in 2016 entitles patients to information about treatment costs.3 Not all measures pass, of course. A ballot measure that would have restricted state spending on drugs in Ohio was resoundingly rejected by voters.4 A similar measure was defeated in California in 2016.5

Massachusetts has considered taking an entirely different approach to pricing controls in asking the Trump administration for permission to allow the state’s Medicaid program to refuse to pay for some drugs, citing rising costs of care and increases in the percentage of residents covered under commercial insurance.6

Maryland’s law presents a new kind of response, one likely to occur more frequently. The law directed the state to monitor price increases and sue manufacturers if it believed an “unconscionable increase” had occurred. In response, the Association for Accessible Medicines, a trade group for generic pharmaceutical companies, filed a lawsuit to block the state from enforcing the law.7 The litigation is ongoing.


Pricing is both a strategic and operational consideration

Pricing decisions must be made strategically and with an eye toward consumer perception of brand and value. Without the expectation of value, set pricing may force manufacturers to readjust, as was the case when Sanofi provided discounts for one of its products after Memorial Sloan Kettering Cancer Center decided it wouldn’t use the drug.[8]

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Manage legal and regulatory uncertainty

With regulations varying from state to state, manufacturers and payers must contend with a complex environment. They should track each state’s requirements so they can navigate regulations, strategically decide which environments to do business in, and figure out whether legal responsibilities allow flexibility.

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Forces other than legislatures will influence future regulations

States are exploring new ways to address transparency and price controls, placing measures on the public ballot or instituting legal challenges. This shift creates new alliances, such as consumer groups partnering with health insurers. Organizations that consider these new initiatives can form successful strategies.

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1 April Dembosky, “California Governor Signs Law to Make Drug Pricing More Transparent,” NPR, Oct. 10, 2017,

2 HB 631, Sess. of 2017 (Md. 2017),; S. 2007/A. 3007, Sess. of 2017 (N.Y. 2017),; S. 216, Sess. of 2017 (Va. 2017),

3 Florida Statutes §381.026

4 Julie Carr Smyth and Dan Sewell, Ballot Issue #2 “To require state agencies to not pay more for prescription drugs than the federal Department of Veterans Affairs and require state payment of attorney fees and expenses to specific individuals for the defence of the law.” Ohio, 2017. Available at Accessed Nov. 16, 2017.

5 Christine Mai-Duc, “Prescription drug pricing measure Proposition 61 goes down to defeat,” the Los Angeles Times, Nov. 9, 2016,

6 Marylou Sudders, Secretary of Health and Human Services, to Seema Verma, Administrator, U.S. Centers for Medicare and Medicaid Services, Boston, Mass., Sept. 8, 2017,

7 Association for Accessible Medicines v. Frosh, et al, U.S. District Court, District of Maryland, No. 17-cv-1860,

8 Andrew Pollack, “Sanofi Halves Price of Cancer Drug Zaltrap After Sloan-Kettering Rejection,” New York Times, Nov. 8, 2012,


Contact us

Kelly Barnes

Global and US Health Industries Leader, PwC US

Benjamin Isgur

Health Research Institute Leader, PwC US

Gurpreet Singh

Health Services Leader, PwC US

Karen C. Young

US Pharmaceutical and Life Sciences Leader, PwC US

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