States Step Forward to Make Prescription Drugs More Affordable

January 28, 2019

At Families USA's Health Action Conference 2019, there were a number of excellent panels. But one of the best was a panel on state efforts to lower prescription drug costs and promote access to affordable medicines. While the federal government has been mostly inactive, state governments have stepped up to the plate and passed a number of reforms to reduce drug prices, and 2019 looks like it will be a busy year.

 

The panelists were State Representative Will Guzzardi from Illinois, Jill Zorn from the Universal Health Care Foundation of Connecticut (UHCF), and Justin Mendoza from Families USA, who also moderated the discussion.

 

Justin Mendoza began with a summary of the current crisis-and he emphasized that it is a crisis. One in four Americans who take prescription drugs have trouble affording them. Health plans attribute 22% of premium costs to prescription drugs, so rising drug prices also mean higher monthly premiums. 86% of Americans support requiring drug companies to release information on how they set drug prices, and 78% support government action. States have certain advantages for these reform efforts; they can enact laws more quickly than the federal government, and serve as laboratories of democracy. They can also set a positive example, and Big Pharma is less organized at the state level.

 

There are four areas that Justin focused on: drug price transparency, regulating pharmacy benefit managers (PBMs), combating price gouging, and drug price review boards. He noted that one major goal for many advocates is rate setting-this goal is to set a statewide ceiling on drug prices, using the government's negotiating power to lower overall costs. States cannot set drug prices across the board, but they can set upper limits for payors within their borders, down to the consumer level. Maryland legislators have introduced a bill that would do this.

 

Transparency is the most basic reform, and it would allow policymakers and the public to learn where the money is going and why drug prices are going up. A number of states have passed or are considering bills to regulate PBMs and make sure they aren't driving up their prices in their role as middlemen. Possible reforms include requiring information from PBMs, registering them, and banning abuses and exploitative practices. Recently the federal government banned gag clauses, which is an excellent step, but it does not require that pharmacists disclose the cheapest prices for drugs to patients. Much work remains to be done.

 

Jill Zorn spoke next. Connecticut has some excellent healthcare practices-it implemented the Affordable Care Act, expanded Medicaid, and has a low rate of uninsured individuals and families. But it also has extreme income inequality and growing disparities in health and longetivity by race and class. In 2017 UHCF partnered with advocates and formed a strong coalition to advocate for lower drug prices. Their efforts paid off. The 2017 consumer protection law banned gag clauses and PBM "clawbacks." Connecticut followed up that success by passing comprehensive transparency legislation in 2018 that focused on pharmaceutical companies, PBMs and insurance companies.

 

Finally, Rep. Guzzardi spoke about his efforts to pass a bill to stop drug price gouging in Illinois. He heard about Maryland's bill to stop price gouging, wrote an Illinois version of the bill, and worked to pass it. The bill made it through the House but died in the Senate, possibly because the generic lobbyist hired to block the bill is best friends with the Illinois Senate President. Guzzardi said he has learned an immense amount about drug prices and how we need to hold drug companies and PBMs responsible for their actions. He is optimistic about the upcoming session, because the Democratic governor wants a victory on health care. Also, high drug prices cost Medicaid and state retirement plans a lot of money, and put strain on state budgets.

 

States are coming forward and working to lower drug costs, and acting as a spur to Congress and federal authorities. Justice Louis Brandeis, who coined the term "laboratories of democracy", would be proud.

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