AG Task Force: Lower Rx drug prices by making markets work for people, using public power to make drugs more affordable, requiring more transparency and accountability
Report and recommendations for legislative, legal, administrative, and patient-oriented action of Attorney General Ellison’s Task Force on Lowering Pharmaceutical Drug Prices released after nearly one year of study and deliberation
First-of-its-kind report sheds light on dysfunction of overly complex pharmaceutical-drug market that doesn’t work for people; also outlines main causes of high prices, including abuse of patent and exclusivity laws, anticompetitive practices, and PBMs’ business practices, among others
February 19, 2020 (SAINT PAUL) — After nearly one year of public study and deliberation, Minnesota Attorney General Ellison’s Advisory Task Force on Lowering Pharmaceutical Drugs Prices has released a report and 14 recommendations for lowering prescription drug prices that call for:
- Making overly complex, opaque, and dysfunctional markets work better for people;
- Using public power to make drugs more affordable and accessible, especially life-saving ones; and
- Requiring more transparency and accountability in the pharmaceutical-drug market.
In clear language that is designed to be accessible to a wide range of Minnesotans, the report sheds light on the dysfunctional nature of a highly complex and opaque pharmaceutical-drug market and the principal factors that contribute to a lack of transparency about prices and a lack of accountability for driving prices higher and higher. It also outlines the main factors that contribute to high prescription-drug prices, including abuse of federal drug patent and exclusivity laws, a variety of anticompetitive practices — some seemingly illegal — and the business practices of pharmacy benefit managers, among others.
Many prior studies and reports have focused on how specific segments of the pharmaceutical-drug market or various individual factors contribute to high prices. The Attorney General’s Task Force report, however, is a first of its kind in laying out clearly and comprehensively in one place the roles of all the major players in the pharmaceutical-drug industry; highlighting how each contributes in various ways to a lack of transparency about and accountability for high drug prices; and calling out the principal industry practices and structural factors that lie in the way of making prescription drugs — especially life-saving ones — more affordable and accessible to the greatest number of people.
Slides of the 14 recommendations and a slide that graphically illustrates the complexity and dysfunction of the pharmaceutical market are attached to this release.
“My job as Attorney General is to help people afford their lives and live with dignity and respect. But too many Minnesotans have told me that when it comes to the cost of their prescription drugs, they’re having to choose between affording their lives and affording to live,” Attorney General Ellison said.
“I pulled together this Task Force to change that,” he continued. “There have been lots of good ideas out there for lowering drug prices, but they’ve been disconnected from each other. This report, however, uniquely offers a comprehensive, shared analysis for why we’re in the mess we’re in and a comprehensive framework for doing something about it. It uses clear language that every Minnesotan can understand to shine a bright light on the opaqueness and dysfunction of the prescription-drug market and call out the factors and practices that drive prices up and keep them there. If we implement these concrete recommendations, we will drive drug prices down and help Minnesotans afford their lives.
“The report itself also strikes a big blow for transparency,” Attorney General Ellison added. “Industry players have for years deliberately hidden who sets drug prices and how. It’s been far too challenging for most people, and even many experts, to get the full picture of why prices are so high, much less understand what they can do about it. With this report, no one can say they don’t know. Now, folks now have the knowledge and tools for holding the industry accountable.”
Task Force co-chair Nicole Smith-Holt said, “It has been an honor to serve with so many people dedicated to finding real solutions to a problem that far too many Minnesotans are facing. The work the task force has begun has the ability to impact many lives: if these recommendations are adopted, the people of Minnesota could see affordable prescription medications which in turn will assist to save lives. Far too many people do not have the ability to purchase their medications and far too many people are forced to ration their medications, which results in long-term health complications and even death.”
Structure and analysis of the report
The report’s executive summary begins:
The market for prescription drugs in Minnesota and the United States is exceedingly complex, opaque, rife with anticompetitive and other problematic business practices, and the laws governing the industry are often misused and abused. In short, the market for prescription drugs is dysfunctional and the prices of them are far too high. Significant reforms to how such drugs are regulated, distributed, and paid for are necessary to rein in the skyrocketing cost of these often life-saving medications. The goal of this report is to propose solutions that if properly implemented, will lower the cost of prescription drugs for the many Minnesotans who struggle to pay for the medications they desperately need.
Section 2 of the report describes how the structure and dynamics of the dysfunctional pharmaceutical-drug industry, and the complex relationships between its major players, permit and incentivize high drug prices. A chart produced by Minnesota Health Action Group that shows in graphic form the complex relationships between major players in the sales and distribution chains of the pharmaceutical-drug market, which is on page 20 of the report, is attached to this release.
Section 3 of the report lays out the major causes and contributors to high prescription-drug prices. Among these are:
- the misuse and abuse of federal patent and drug-exclusivity laws;
- patients’ inability to access more affordable sources of medication through safe importation channels;
- anticompetitive conduct in the industry;
- deceptive and other unlawful marketing practices in the industry;
- the opacity of and conflicts of interest present in the business models of pharmacy benefit managers (PBMs); and
- perverse economic incentives that favor the use of more expensive, branded drugs even when less expensive generics are available.
Section 4 of the report reviews some of the current and past legislative, regulatory, and law-enforcement efforts across the country to address high prescription-drug prices. Among those efforts is a drug-price gouging law in Maryland that was recently found unconstitutional. Legislators and advocates who are working to pass a drug-price gouging law in Minnesota — which is one of the Task Force’s recommendations — are fashioning a bill that addresses and mitigates that concern.
Recommendations of the report
In Section 5 of the report, the Task Force has proposed 14 recommendations that fall into one or more of three broad categories: 1) making overly complex, opaque, and dysfunctional markets work better for people; 2) using public power to make drugs more affordable and accessible, especially life-saving ones; and 3) requiring more transparency and accountability in the pharmaceutical-drug market. These recommendations, if and when they are properly implemented, will bring down the cost of pharmaceutical drugs in Minnesota.
The recommendations are:
- Create a Prescription Drug Accountability Commission to address drug pricing and related practices in Minnesota.
- Import four life-saving, critical-access drugs — insulin, EpiPen, Truvada, and naxolone — through a prime vendor, and expand the program if successful.
- Enact drug price-gouging legislation that prohibits drug manufacturers from charging or causing to be charged an unconscionable price for essential prescription drugs.
- Strengthen Minnesota’s consumer-fraud laws as they related to deceptive practices in the pharmaceutical-drug industry.
- Enact a state anti-kickback law.
- Strengthen Minnesota’s antitrust laws to prohibit specific, anticompetitive practices present in the drug industry.
- Strongly advocate for reform of federal drug patent and exclusivity laws that are being misused and abused.
- Optimize and expand Minnesota’s use of the federal 340B Drug Pricing Program, which allows health care providers to purchase drugs at dramatically reduced prices.
- Quantify how much all Minnesota government entities spend on prescription drugs, to enable these entities to better pool and utilize their bulk-purchasing power.
- Optimize and better utilize Minnesota’s bulk purchasing power through MMCAP INFUSE, and extend the discounts it receives to individual Minnesotans.
- Robustly regulate PBMs and their business practices, building on legislation passed in the 2019 legislative session.
- Enact additional measures to increase transparency into how drugs are priced and reimbursed throughout the drug sales chain.
- Ensure patient access to pharmacists for effective medication use.
- Support additional research into prescription drug pricing and drug benefits.
“These recommendations are multiple points of attack on a complex, many-sided problem. While the scope of the problem far exceeds the boundaries of Minnesota, we can’t wait for national action: we can and must take steps to bring prices down for Minnesotans now,” Attorney General Ellison said. “This report lays out a comprehensive framework and path for doing just that.
“While Minnesotans everywhere want drug prices to come down, there are still some folks who don’t. They won’t like this report. That’s because we’re shining a light on some shady practices — some of them seemingly illegal, some that should be illegal, some that are legal but immoral — that have kept Big Pharma, PBMs, and their lobbyists afloat and their profits as sky-high as the prices Minnesotans pay for their prescription drugs,” Attorney General Ellison added. “We know they’ll attack every step we take because they’ve already done it in every other state that’s tried to bring prices down. But when they fight to keep prices high, businesses practices opaque, and accountability scarce, it only makes us more determined to do everything in our power to help Minnesotans afford their lives and afford to live with dignity and respect.”
Background on the Task Force
Nearly one year ago to the day, on February 21, 2019, Attorney General Ellison announced the formation of his Advisory Task Force on Lowering Pharmaceutical Drug Prices. He stated at the time that his intent for the Task Force was to gather in the best thinking in order to understand why the prices of prescription drugs are so high — in some cases, unconscionably high — and come up with multi-pronged strategies to lower prices.
On April 4, 2019, Attorney General Ellison announced the composition of the 15-member Task Force, which included 10 people chosen through the State’s Open Appointments process out of more than 100 who applied. They are:
- Elo Alston, Patient Advocate
- Jessica Braun, Nurse Practitioner
- Nazie Eftekhari, Founder and CEO, HealthEZ
- Phu Huynh, Pharmacy Manager, NorthPoint Medical Clinic
- Christy Kuehn, Patient Advocate
- Shirlynn LaChapelle, Nurse Consultant
- Rose Roach, Executive Director, Minnesota Nurses Association
- Dr. Stephen Schondelmeyer, Professor of pharmaceutical economics at the University of Minnesota; director, PRIME Institute, College of Pharmacy, University of Minnesota
- Nicole Smith-Holt, Charity Ambassador, T1International
- Dr. Leonard Snellman, General Pediatrician, HealthPartners
The other five members of the Task Force are legislators from each party in each house — Senator Scott Jensen (R–Chaska), Senator Matt Little (DFL–Lakeville), Representative Rod Hamilton (R–Mountain Lake), and Representative John Lesch (DFL–Saint Paul) — and Dr. Cody Wiberg, executive director of the Minnesota Board of Pharmacy. Attorney General Ellison served as an ex officio member.
At the first meeting of the Task Force on April 23, 2019, members chose Senator Jensen and Ms. Holt-Smith to co-chair the Task Force. Senator Jensen is a practicing physician. Ms. Smith-Holt is a national advocate for #Insulin4All. Her 26-year-old son Alex died in 2017 of ketoacidosis after he began rationing his insulin because he could not afford it.
Since then, the full Task Force has met eight times and the Task Force’s three working groups a total of 15 additional times. All meetings have been open to the public. Task Force members have considered scores of hours of presentations and testimony and many hundreds of pages of research and reports on the topic, from a broad mix of perspectives. Information about the Task Force’s meetings, working groups, and testimony and research considered is on Attorney General Ellison’s website.
In addition to Co-Chairs Jensen and Smith-Holt and the Task Force members, the following staff of the Attorney General’s office were essential in supporting the Task Force and completing the report: Deputy Attorney General James Canaday; Assistant Attorneys General Rachel Bell-Munger, Mike Goodwin, David Jones, Adrienne Kaufman, Noah Lewellen, Justin Moor, Jason Pleggenkuhle, Josh Skaar, and Ben Velzen; office staff Shawna Audette, Rita Desmond, Willow Fortunoff, MaryAnne Giles, Allison Hustedt, Brian Lebens, Amy Luedtke, Shanell McCoy, Gary Nelson, John Stiles, Daniel Tikk, and Casey Weber. Finally, Policy Director Sadaf Rahmani served as principal staff lead and point of contact for the Task Force, and shepherded its work from start to finish.