University of Tennessee Legal Studies Research Paper
It is no secret: the prices of prescription drugs in the United States are unsustainable. A piercing example of the limits of America’s incomplete and disordered health care non-system, the crisis has only worsened in recent years. And not only do drug prices exact a toll on America’s consumers, they impact Americans’ access to life-enhancing (and sometimes life-saving) drugs. They constitute a real and present threat to the quality of health care in the United States in 2020.
Recognizing this harm, states are increasingly operating in this space, seeking diverse regulatory solutions to better protect their citizens — from gouging statutes, to transparency laws, to formulary rules. In 2020, states operationalize multiple roles when it comes to prescription drug prices, and their indispensability has highlighted the need to categorize and summarize these efforts and their roles — from the states that serve as mere payers, to those that try to activate consumer tools, to those that facilitate various marketplaces, to those that oversee and review the prices and purchases that take place in their states, and ultimately to those that seek to directly penalize and punish pharmaceutical companies who price their drugs at certain levels. Many states occupy multiple, complex, and overlapping roles simultaneously.
This piece undertakes that necessary review, observing that increased state regulatory action reflects a rising trend of state primacy in health policy. But it also observes a key limitation for state-centric regulation: state action on the ground is too often hamstrung by preemptive blocks that prevent various state solutions from taking effect. From ERISA, to the dormant commerce clause, to the Department of Health and Human Services’ waiver process, to federal patent preemption, these federal sources of law serve as a cumulative preemptive cap on necessary state action.
Besides the obvious harms, these regulatory clogs can be characterized as:
(1) too often anti-democratic,
(2) weakening the regulatory structure,
(3) injecting regulatory inconsistencies, and
(4) likely to lessen the chances of a satisfactory federal solution.
Applying lessons from the environmental law context, this piece challenges the wisdom and legitimacy of these federal regulatory clogs in the midst of a pharmaceutical drug cost crisis. In addition to identifying alterative pathways, this analysis suggests a reexamination of the various legal regimes that block state efforts in this area, all while millions of Americans currently face drug prices that they simply cannot afford.
Buck, Isaac, "The Drug (Pricing) Wars: States, Preemption, and Unsustainable Prices" (2020). UTK Law Faculty Publications. 38.