In 2015, the U.S. government passed the 21st Century Cures Act. In it was a provision called the ‘Open Act,’ designed to increase drug pricing transparency by requiring manufacturers to submit clinical trial results and detailed information on production and R&D costs.

Since then, several states have taken measures to further pursue price transparency, such as requiring additional information to support drug price trend monitoring, publishing databases of information on drug prices, or establishing review boards to make recommendations on costs. While none of these requirements set limits on drug prices, the hope states have is that manufacturers might think twice before raising prices.

Two Labs recently unveiled our State Drug Price Transparency (DPT) services, designed to help clients keep up with each state’s different reporting requirements.

Let’s walk through the basics of DPT, and what it means for manufacturers.

Broadly speaking, any factors that go into determining the drug price are fair game for reporting: clinical trial data, production and R&D costs, market analysis, and more. But each state has its own specific set of requirements. Some, like Minnesota or Oregon, require more. Some, like North Dakota, ask for less.

The main drivers of what you have to report are your drug’s price and price history. If you launch a product below a certain threshold and aren’t planning to raise the price, you could probably expect to report less. However, if your drug already has a history or price increases and you’re planning another, you should plan to provide a lot more rationale behind that.

All manufacturers have some sort of price reporting obligation, even if you’re not planning on changing the price anytime soon, and the clock on reporting begins the day your PDUFA date is received. Medical devices are the only type of products excluded from these DPT reporting requirements.

Strategy & Planning
Our DPT team can tell you how your reporting requirements will change in response to specific pricing actions you take. Every state has its own reporting requirements, so when you adjust a drug price, Two Labs will help you make sense of each state’s regulations so that you can file on time.

Monitoring the Growing Landscape
Several states already have DPT laws, at least 20 more states are expected to enact similar laws in the next two years, and more than 100 DPT-related bills are pending at the federal and state levels.

The DPT landscape has been on a steady incline since 2015, and Two Labs has been monitoring it every step of the way.

Avoid Penalties & Enforcements
DPT is a patient (and voter) priority. States that do have DPT laws have been ramping up their enforcement activity. Two Labs will help you stay compliant and avoid the heavy penalties that could break a small manufacturer’s budget. We’ll also help you record proper documentation to help defend your paperwork if your filing is mistakenly flagged.

You already know that your launch will need a DPT plan. The question is, are you ready to talk to Two Labs to make sure you’re covered?