Navigating the Prescription Drug Reform Act: A New Landscape for Drug Manufacturers in Florida
| by: Kelly DiBattista, Esq., Research Director | Article Posted: July 5, 2023 |
Introduction of FL S1550
On May 4, 2023, Florida introduced new drug price transparency legislation with the enactment of the “Prescription Drug Reform Act” (FL S1550). For drug manufacturers operating in the state, this new legislation presents both challenges and opportunities as they navigate the changing landscape.
Reporting Requirements for Manufacturers
The core provision of the Prescription Drug Reform Act is a requirement that places a new reporting obligation on drug manufacturers. Specifically, if there is an increase of 15% or more in a drug’s wholesale acquisition cost (WAC) over the previous 12-month period, or if there is a collective rise of at least 30% over the last three calendar years, manufacturers must report these increases to the Department of Business and Professional Regulation.
Additional Requirements for Manufacturers
Far from being a simple notice of a price increase, this report necessitates the submission of comprehensive information. Manufacturers are asked to provide the intended use of the drug, the reasons behind any price increase, information on patent extensions, and the percentage price increase from the preceding year. Furthermore, they need to specify the lifetime of the drug on the market and provide a detailed justification for the price increase.
This new reporting obligation compels drug manufacturers to adopt a more transparent approach to pricing strategies. The requirement to disclose the reasoning behind price hikes, along with other detailed information about the drug, presents an opportunity for manufacturers to engage in a constructive dialogue about the cost of pharmaceuticals. The justifications offered in these reports will help to inform stakeholders and the public about the complexities of drug pricing and the factors that contribute to increases.
Designation of a Primary Contact
Further augmenting the reform’s consumer protection measures, the Prescription Drug Reform Act requires the Division of Consumer Services of the Department of Financial Services to assign a primary contact for handling consumer complaints regarding pharmacy benefit managers. This new requirement underscores the need for manufacturers to work closely with pharmacy benefit managers to ensure seamless service delivery.
Submission of Annual Attestation
Another provision that manufacturers must be aware of is the obligation of pharmacy benefits plans and programs to submit an annual attestation to the Office of Insurance Regulation. Understanding these attestations, and how they may impact their own pricing strategies, is crucial for manufacturers to navigate the new regulatory landscape.
What Will The Outcome Look Like?
Adapting to the Prescription Drug Reform Act will undeniably pose new challenges for drug manufacturers, necessitating careful strategic planning and alterations to existing operations. The act’s regulatory requirements will create the need for manufacturers to reassess their pricing strategies and reporting mechanisms.
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