Vermont on the cusp of enacting the country’s first anti-Shkreli law

In a matter of weeks, Vermont could be the first state to require drug makers to justify steep price increases for medications.

The bill that would set that requirement has already passed through both houses of the state’s legislature and now only requires the final sign off from Governor Peter Shumlin, who the AP reports is likely to sign the bill. Shumlin is expected to decide on whether to sign by early next month.

The bill was inspired by the recent rage-inducing trend among pharmaceutical companies to dramatically up the price of drugs without clear reasoning—beside price gouging. The most notable case was that of Martin Shkreli, who as the CEO of Turing Pharmaceuticals decided last fall to increase the price of a decades-old anti-parasitic drug from $13.50 a pill to $750 overnight. Shkreli has since stepped down from Turing and currently faces several criminal charges unrelated to drug pricing, but he became a poster-child for the greed of the pharmaceutical industry.

In an effort to establish transparency in drug pricing and protect patients, Vermont’s bill would require state health regulators to make a yearly list of up to 15 drugs that saw large price increases—either a 50 percent or more increase over the past five years or a 15 percent or more increase in the past year. The makers of those drugs would then be required to justify the increases to the state’s attorney general’s office using financial data and manufacturing cost breakdowns. That information will then be published on a public website.

Manufacturers who don’t submit a price justification will face a $10,000 penalty. However, it's currently unclear how justifications will be judged by the state.

Several other states, namely New York, Pennsylvania, Massachusetts, California and Virginia, have proposed similar measures. Currently, none are as far along as Vermont's.