National Analysis of the Requirements and Implementation of State Prescription Drug Price Transparency Laws

Prescription drug prices in the United States are substantially higher than in other high-income countries, with US prices reported to be an average of 2.78 times those of other countries in the Organisation for Economic Co-operation and Development.¹ In response to these high prices, along with an opaque supply chain that can lead to substantial discrepancies in prices across different payors, states have passed drug price transparency laws that require manufacturers to disclose information on drug prices. Beginning in 2016, when Vermont passed the first state drug price transparency law,² 21 states have passed transparency laws by 2024. Drug price transparency laws have numerous goals, including to create accountability around drug pricing and to allow state policymakers to get greater insight into complex drug pricing systems that might help them develop legislative and policy solutions to address high prices for the patients in their states.

This article explores state drug price transparency laws that place price reporting mandates on manufacturers. These laws vary in design but often require manufacturers to report the wholesale acquisition cost (WAC) of drugs—the list price of a drug that is set by the manufacturer and represents the price paid to manufacturers by distributors, the next step in the supply chain—that are above a certain threshold for a new drug or that are increased above a certain margin, along with other data such as the manufacturer’s costs. The data are reported to the state, and some aspects of the data may be publicly shared. This article will begin with a summary of the price transparency laws enacted across states and will then discuss any evidence of the impacts of these laws. The article will end with an analysis of whether the implementation of these transparency laws has met the goals of the legislation.

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