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State could force pharmaceutical companies to disclose drug pricing practices

  • / Updated:
  • Staff Report 

Gov. Kathy Hochul and the New York state Senate are pushing budget proposals that could require pharmaceutical companies to disclose anti-competitive drug pricing practices and report cost increases for prescription medications. If enacted, New York would join several states with mandatory reporting of drug price hikes and their justifications.


The state Senate aims to go further, banning “pay to delay” agreements between brand-name and generic drug manufacturers. Such deals, in which brand-name companies pay generics to delay market entry, are estimated to cost Americans $3.5 billion annually. However, attempts to ban the practice at the state level, like in California, have faced legal challenges.


Hochul’s proposal would require drug companies to report “pay to delay” agreements to the state Department of Financial Services, marking a significant step towards curbing the practice. States with existing pricing transparency laws, such as Vermont and Oregon, have seen a decrease in the number of price increases that trigger reporting requirements.

Experts argue that increased transparency can protect drug affordability, while noting the difficulty of regulating “pay to delay” deals without violating the interstate commerce clause, which reserves certain regulatory powers for Congress.