Drug pricing, health insurance battles continue at both state, federal levels
With just one week left in the current legislative session, Colorado lawmakers have achieved some big health care priorities but are stalled on some other key bills aimed at bringing down the runaway costs of both health insurance and prescription drugs.
A reinsurance bill, House Bill 1168, received an initial vote of approval from the full House of Representatives earlier in the month but is tied up in the Senate Finance Committee while lawmakers try to find other, non-hospital funds to dedicate to the program.
As it stands, the House version would push Colorado over a hospital fee limit set by the federal government and potentially cost the state billions in federal health care funds. That has lawmakers scrambling to find other funds, such as redirecting a potential pool of money originally aimed at easing the state’s affordable housing crisis.
And HB 1296 – a prescription drug transparency bill – is still languishing in the House. Both bills are sponsored in the state Senate by Kerry Donovan, a Vail Democrat.
Meanwhile, Donovan’s bill to get the ball rolling on a state public option insurance program – a bill sponsored in the House by Avon Democrat Dylan Roberts – is expected to be signed into law by Gov. Jared Polis. Both the public option, which wouldn’t have an impact until the 2021 insurance sign-up period, and the reinsurance bill are aimed people buying insurance on the out-of-control individual market, which serves about 8 percent of the state’s population.
The bipartisan reinsurance bill, which would immediately bring down insurance rates on the individual market for 2020, is sponsored in the Senate by Republican Bob Rankin of Carbondale and in the House by Democrat Julie McCluskie of Dillon.
At the federal level, the U.S. Senate this month continued contentious hearing on how best to bring down prescription drug prices nationally, focusing on the role of Pharmacy Benefit Managers in negotiating drug prices with manufacturers and insurance companies.
Here’s a re-post of a story on the state prescription drug bill and the federal drug-pricing battle produced by RockyMountainPost.com for the Vail Daily on Sunday, April 7.
Local lawmakers leading charge to bring down drug prices
The skyrocketing cost of prescription drugs in the United States is consistently cited as a primary driver of escalating health insurance and overall health care costs in Eagle County and across Colorado’s Western Slope. Lawmakers are trying to finally do something about it this legislative session, and local elected officials are once again at the forefront of that fight.
Sponsored by Sen. Kerry Donovan, D-Vail, introduced late last month and now in the House Finance Committee, HB 1296 would compel drug manufacturers, health insurance companies and others to report specific information about drug costs to the state commissioner of insurance, who would then produce a report on how those costs are impacting health insurance rates.
“Too many families are making hard choices when it comes to paying for prescription drugs, but no one can seem to explain why prices continue to rise,” Donovan said. “By requiring manufacturers, insurers, and others to provide specific pricing information, we can explain why prescription prices are skyrocketing and find ways to lower costs for Coloradans.”
Avon Democratic state Rep. Dylan Roberts is a co-sponsor of the bill in the House.
“Prescription drug prices are out of control and we must act,” Roberts said. “The bill is a broad and comprehensive price transparency measure that will shed some much-needed sunlight on the entire prescription drug pricing chain for all of the most commonly used and expensive drugs.”
The bill would compel drug manufacturers to provide notice of and justify price increases, require insurers to pass rebates on to consumers and direct Pharmacy Benefit Management (PBM) firms – the companies that negotiate drug prices between manufacturers and insurers – to report on the percentage of rebates they retain.
“Drug corporations are price-gouging consumers by profiting off of medicines and making higher profits than any other industry with unjustified, overnight price hikes,” said Adam Fox, director of strategic engagement for the nonprofit Colorado Consumer Health Initiative (CCHI). “Policymakers need to understand why drug prices are going sky-high and driving up health care costs.”
Another bill sponsored by Roberts in the House and Donovan in the Senate is aimed directly at capping the cost of one particular prescription drug — insulin. HB 1216 would cap copays for insulin, which currently can exceed $600 a month, at $100, and it would direct the attorney general to investigate pricing and report to the governor, insurance commissioner and legislature.
The bill is personal for Roberts, whose brother Murphy died in a fall related to a diabetic seizure.
“Insulin is probably the most egregious example of prescription drug price increases,” Roberts said. “A vial of insulin cost $20 in 1996, and it now costs over $300 per vial — for the exact same medicine. Combine that with the fact that for people with Type 1 diabetes, and some with Type 2, insulin is like oxygen. You die if you don’t have it daily.”
But the cost of the drug has forced some diabetics to ration its use, Roberts said. His bill passed its first committee vote with bipartisan support.
Gov. Jared Polis and Lt. Gov. Dianne Primavera on Thursday specifically cited skyrocketing drug prices as they unveiled their “Polis-Primavera Roadmap to Saving Coloradans Money on Health Care.” They also noted, while rolling out the new plan, that “the cost of care has been increasing at an alarming rate, especially in rural areas and mountain communities.”
Roberts and Donovan have also been leading the charge on reforming the state’s health insurance system – from a public option to reinsurance. Polis and Primavera also talked about those solutions Thursday as part of their broader plan to bring down rates and overall health care costs.
“Addressing the high cost of health care is one of my biggest priorities this session, and an important part of this effort is aimed at reducing prescription drug costs,” Donovan said.
But it’s at the federal level where the most impactful legislation and rulemaking will have to take place, and Congress has long been gridlocked on how best to bring health care prices, insurance rates and drug costs.
President Donald Trump has signaled for more than two years that runaway drug prices would be a target of his administration, but his tough talk has yet to result in much action. Medicare still pays 80 percent more than consumers pay in other industrial countries for some of the most costly drugs, according to a government study from last year.
That may be finally changing, with some smaller measures aimed at boosting generic drugs gaining some bipartisan traction just this week. Drug manufacturers, however, are pushing back – battling hard for a proposed Department of Health and Human Services rule change that would eliminate the rebates negotiated by Pharmacy Benefit Management (PBM) companies.
Backed by prescription drug manufacturers as a way of cutting costs by eliminating the middle man – and set for a Senate hearing Tuesday of next week – the rulemaking would essentially leave the fox guarding the henhouse, according to the Campaign for Sustainable Rx Pricing (CSRxP) – a coalition of doctors, hospitals, health plans, pharmacists and PBMs.
“Right now, PBMs and that rebate process are the only existing check on the ability of Big Pharma to unilaterally set prices,” CSRxP spokesman Jon Conradi said. “Essentially the rule is banking on Big Pharma, which has a demonstrated track record of engaging in anti-competitive tactics and price-gouging, to lower prices by the full amount of the rebates when there’s nothing in the rule that compels them to do that.”
Overall, Conradi says there is some positive bipartisan action on drug prices starting to take shape in Washington, but the Trump administration backing of the PBM rule would be a setback.
“There has been such a political sea change on the issue of prescription drug prices, and it’s become such a priority for the American people that it’s one of the rare areas and may be the most likely area where there is going to be bipartisan agreement and even legislation that passes into law,” Conradi said.
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