Office of the Vermont Attorney General

Prescription Drug Cost Transparency-Manufacturer and Health Insurer Annual Reporting

Act 193 amended certain statutory provisions, including 18 V.S.A. § 4635, entitled    “Prescription Drug Cost Transparency.”  The act expands the provisions of Vermont’s existing prescription drug transparency to require the Department of Vermont Health Access (“DVHA”) and health insurers with more than 5,000 covered lives in Vermont to create lists of 10 prescription drugs for which the payer’s net cost has increased by 50 percent or more over the past five years or 15 percent or more over the past calendar year.  The pre-existing law related only to drugs purchased by the State for which the wholesale acquisition cost increased by 50 percent or more over the prior 5 years or by 15% or more over the prior 12 months.

18 V.S.A. § 4635 requires that DVHA annually create:

  • A list of 10 prescription drugs (at least one generic and one brand name) on which the State spends significant health care dollars and for which the wholesale acquisition cost has increased by 50 percent or more over the past five years or by 15 percent or more during the previous calendar year; and
  • A list of 10 prescription drugs (at least one generic and one brand name) on which the State spends significant health care dollars and for which DVHA’s net cost has increased by 50 percent or more over the past five years or 15 percent or more over the previous calendar year (ranked from the greatest to least net cost increase).

The lists must be submitted to the Attorney General’s Office annually on or before June 1. The most recent lists may be viewed here and here.

 18 V.S.A. § 4635 requires that each health insurer with more than 5,000 covered lives in Vermont for major medical health insurance annually create a list of 10 prescription drugs (at least one generic and one brand name) on which its health insurance plans spend significant amounts of their premium dollars and for which the cost to the plans, net of rebates and other price concessions, has increased by 50 percent or more over the past five years or by 15 percent or more during the previous calendar year, or both.  The health insurer must rank the drugs on the list from those with the greatest increase in net cost to those with the smallest increase, indicate whether each drug was included on the list based on its cost increase over the past five years or during the previous calendar year, or both, and indicate each of the drugs on the list that the health insurer considers to be specialty drugs.

The list must be submitted to the Attorney General’s Office annually on or before June 1.

Health insurers are also required to provide to the Attorney General’s Office the percentage by which the net cost to its plans increased over the applicable period or periods for each drug on the list, as well as the insurer’s total expenditure, net of rebates and other price concessions, for each drug on the list during the most recent calendar year. Such information will be maintained as confidential by the Attorney General

Drug Manufacturer’s Submission to the Attorney General by Required by 18 V.S.A. § 4635

Manufacturers of the drugs on the attached list must submit, to the Office of the Attorney General, a report that provides the justification for the increase in the net cost of the listed drugs, together with all relevant information and supporting documentation, as specified in 18 V.S.A. § 4635 (c)(1)(B). The report, which is due on November 5, 2018, will be posted on the Attorney General’s website. If a manufacturer believes it necessary to redact certain information in the public version as confidential or proprietary, the manufacturer must provide an explanation for each such redaction in its report. 18 V.S.A. § 4635 (c)(1)(B)(ii).  Please submit the report to AGO.highcostprescriptiondrugs@vermont.gov.

Annual Report by the Attorney General to the Legislature

Annually, on or before December 1, the Attorney General’s Office will submit a report to the Legislature that identifies the top 15 drugs on which the greatest amount of money was spent across all payers during the previous calendar year, after submission to it by manufacturers of certain additional required information. The report (which will reflect only non-confidential information) will be posted on the websites of the Attorney General and the Green Mountain Care Board.