Impact litigation initiated by state attorneys general has played an important role in advancing public health goals in contexts as diverse as tobacco control, opioids, and healthcare antitrust. State attorneys general also play a critical role in helping governors and legislatures advance health policies by giving input into their drafting and defending them against legal challenges. State attorneys general have entered the prescription drug affordability arena in both these ways—for example, by initiating lawsuits relating to price fixing by generic drug manufacturers and defending state laws requiring disclosures of pharmaceutical prices. Yet the scope of their collective efforts is not well understood, and little is known about factors that facilitate and hinder them in their pursuit of policy objectives relating to drug affordability. In this Article, we report findings from an empirical study of state attorney general activities relating to pharmaceutical pricing. Drawing from key informant interviews with attorneys working on drug pricing issues as well as a scoping review, we report on how state attorneys general are working to address the problem of drug affordability, how they make decisions about resource investments in this area, what positions state attorneys general to be effective change agents in this space, and what challenges they confront in this work. We situate our results within the broader literature on state attorneys general as policy actors, and we suggest measures that could extend their capacity to successfully tackle the complex issues that give rise to unaffordable drugs.
Prescription drug affordability has risen to the very top of the policy agenda for lawmakers and the public. Even during the peak of the COVID-19 pandemic in January 2021, a national poll ranked taking action to lower prescription drug prices as Americans’ second-highest domestic policy priority, with eighty-seven percent of participants rating the issue “extremely important.” Nearly one in four Americans reports difficulty affording their prescription medications, and patients may respond by delaying filling their prescriptions, cutting pills in half, or skipping doses. Despite partisan divisions among voters in many areas of health policy, a bipartisan supermajority of Americans—nearly four in five—believes that prescription drug costs are “unreasonable.”
Notwithstanding both this bipartisan support and pledges by leaders of both parties to take action on the issue following the 2016 election, few substantive reforms have become law at the federal level in recent years, either through legislation or regulation. Rather, states have become the locus of policy action on prescription drug costs. States’ interest in this area arises not only because high drug prices harm consumers, but also because state budgets are directly affected when drug costs for the Medicaid program or state employee health plans rise. Unlike the federal government, states face special financial pressures due to requirements that they balance their budgets. Since 2017, 166 prescription drug pricing bills have become law in forty-eight states, tackling everything from price transparency to regulation of pharmacy benefit managers (PBM) to drug affordability boards. State legislatures are even taking inspiration from bold proposals being introduced at the federal level by considering bills that would adopt international reference pricing approaches within their own states. Despite this energetic activity, state legislative interventions adopted to date have had only modest impacts on drug pricing.
There has been little scholarly attention paid to the drug affordability activities of another state-level policy actor with an important role to play: offices of state attorneys general (AGs). State AGs are important players both in using affirmative tools, including litigation, to advance important policy goals and in defending states against the inevitable legal challenges to state legislative efforts on prescription drug affordability. Past examples of state AG involvement in critical public health issues, including tobacco control and the opioid epidemic, suggest that state AG litigation can be a powerful force in combating business practices that cause health harms. In many states, AGs also have a critical role to play in providing advice to legislatures trying to make progress on drug pricing amidst ever-present threats of lawsuits challenging their enactments. Building on their past experiences, as well as a successful history of addressing high drug prices using healthcare fraud-and-abuse statutes, state AG offices have recently expanded their activities in the drug affordability space to include a variety of interesting, creative approaches leveraging state and federal antitrust laws, state consumer protection laws, emergency price-gouging statutes, and other authorities.
In this Article, we report findings from an empirical study of state AG activities relating to pharmaceutical pricing. Few empirical analyses of state AGs’ activities have been conducted, and to our knowledge, this is the first to focus on drug pricing. Through key informant interviews with attorneys working on drug pricing issues within state AG offices as well as a scoping review, we sought to learn more about how state AGs are addressing the problem of prescription drug affordability, how they make decisions about resource investments in this area, what positions state AGs to be effective change agents in this space, and what challenges they confront in this work. We situate our results within the broader literature on state AGs as policy actors, and we suggest measures that could extend their capacity to successfully tackle the complex issues that give rise to overpriced drugs.
Part I of this Article surveys the existing literature on the role of state AGs, considering key elements of their institutional role and exploring how those elements were instantiated in specific activities in the health context. Part II presents the methods we used in conducting this project. Part III presents the results of our analysis, including the major activities of state AGs in the prescription drug affordability space and key findings relating to how they carry out this work and the factors that empower and constrain them. Part IV reflects on these results, and Part V offers recommendations for strengthening state AGs’ role in this important area.
. Ashley Kirzinger, Lunna Lopes, Bryan Wu, & Mollyann Brodie, KFF Health Tracking Poll—February 2019: Prescription Drugs, Kaiser Fam. Found. (Mar. 1, 2019), http://www.kff.org/health-reform/poll-finding/kff-health-tracking-poll-february-2019-prescription-drugs [http://perma.cc/H75W-RSS2].
. Stacie B. Dusetzina & Michelle M. Mello, Drug Pricing Reform in 2021—Going Big or Going Bipartisan?, JAMA Health F. (July 8, 2021), http://jamanetwork.com/journals/jama-health-forum/
. Rachel E. Sachs, The Rhetorical Transformations and Policy Failures of Prescription Drug Pricing Reform Under the Trump Administration, 46 J. Health Pol., Pol’y & L. 1053 (2021). Some small reforms that would attempt to eliminate anticompetitive abuses, such as the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, did become law. See Further Consolidated Appropriations Act, 2020 § 610, 21 U.S.C. § 355-2; U.S. Food & Drug Admin., Access to Product Samples: The CREATES Act (2020), http://www.fda.gov/drugs/guidance-compliance-regulatory-infor
. Trish Riley, Celebrating Five Years of State Action to Lower Drug Prices, Nat’l Acad. for St. Health Pol’y (May 18, 2021), http://www.nashp.org/celebrating-five-years-of-state-action-to-lowe
. Lev Facher, States Still Can’t Import Drugs from Canada. Now, Many are Seeking to Import Canadian Prices, STAT (Feb. 18, 2021), http://www.statnews.com/2021/02/18/states-canada-drug-pric
. Michelle M. Mello & Trish Riley, To Address Drug Affordability, Grab the Low-Hanging Fruit, JAMA Health F. (Feb. 25, 2021), http://jamanetwork.com/journals/jama-health-forum/fullart
icle/2777036 [http://perma.cc/E5FD-N6RW] (summarizing data on recent price increases). For a discussion of legal limitations on what states can regulate in the drug affordability space, see infra note 237 and accompanying text.
. See, e.g., Ass’n for Accessible Meds. v. Frosh, 887 F.3d 664, 666 (4th Cir. 2018) (invalidating a Maryland statute regulating excessive price increases for essential off-patent and generic drugs).
* Mello is a Professor of Law at Stanford Law School; Professor in the Department of Health Policy at Stanford University School of Medicine; and a faculty affiliate of the Freeman Spogli Institute for International Studies, Stanford University; Ph.D., University of North Carolina at Chapel Hill; J.D., Yale Law School; M.Phil., University of Oxford; A.B., Stanford University. Grant funding from the Arnold Ventures is gratefully acknowledged. The funder had no role in the design of the study or the drafting or revision of the manuscript. Mello discloses expert witness fees received from law firms representing generic drug company plaintiffs in a pharmaceutical antitrust lawsuit; Mello and Sachs disclose receiving consulting fees from the National Academy for State Health Policy for authoring reports on policy strategies to regulate prescription drug prices; Mello reports serving as a consultant to CVS Caremark and, after the period in which work reported in this Article was conducted, as an expert witness on behalf of a health insurer suing a pharmaceutical company over alleged off-label promotion (no fees yet received for either engagement); and Sachs reports receiving honoraria for her participation on the Institute for Clinical and Economic Review’s independent Midwest Comparative Effectiveness Public Advisory Council and West Health’s Council for Informed Drug Spending Analysis. The authors extend their thanks to the attorneys who participated in this study and to Katie Siler, Taryn Marks, Heather Joy, Camila Strassle, Quinn Walker, and Corissa Paris for research assistance. For their thoughtful comments and suggestions in developing this Article, the authors would like to thank Margaret Lemos and the scholars who participated in workshops at Washington University in St. Louis School of Law and Johns Hopkins Bloomberg School of Public Health.
† Riley is a former Executive Director of the National Academy for State Health Policy; M.S., University of Maine.
‡ Sachs is the Treiman Professor of Law, Washington University in St. Louis School of Law; J.D., Harvard Law School; M.P.H., Harvard School of Public Health; A.B., Princeton University.