HARTFORD, CT — Connecticut’s legislature may struggle with how it reforms its tax structure in an election year, but there will likely be widespread support for reining in health care spending.
Health care is one of the largest spending categories for the state.
State Comptroller Kevin Lembo and Insurance and Real Estate Committee Co-Chair Sean Scanlon convened a state Capitol meeting of stakeholders Wednesday to see how they can decrease state spending on prescription drugs.
The Health Care Cost Institute recently published a report that found health care spending grew 4.5 percent from 2015 to 2016 even though utilization was steady. The study, which was limited to employer-sponsored coverage, found that the increase in spending was driven by steep increases in prices for prescription drugs and emergency-room care.
Spending on prescription drugs, according to the report, is up 27 percent since 2012, driven by a 25-percent jump in prices.
Nora Duncan, Connecticut director of the AARP, said the average older American is taking four or five prescription drugs and spending $26,000 a year. At the same time the average income for a Medicare beneficiary is $24,000 a year.
“We clearly have some math that’s not working,” Duncan said.
She also pointed out that it’s not just people complaining about the cost of prescription medicine like they complain about the cost of cable.
“This is people having to make decisions about whether or not they’re going to take these medications,” she added.
Kelly Ryan of PhRMA said the cost of prescription drugs has remained “relatively stable.”
She said consumers with higher deductible plans are seeing cost increases because insurance companies are covering less of the cost increases.
It’s an argument that will pit Big Pharma against Big Insurance. Expect a rematch between the two during the upcoming legislative session.
The debate over controlling prescription drug costs has moved to the state while the federal government remains largely distracted by other issues.
One of the ways Connecticut might be able to lower drug prices is by moving toward greater transparency.
“It is an important job for us as policymakers to try and figure out what the truth is,” Scanlon said.
Scanlon said data is not one-sided. He said they should have the information they need to understand why certain drug prices are increasing.
“Congress is not going to address this issue just based on the backlog of issues they have to address currently,” Scanlon said. “So I think it’s important for states to look at big problems that are affecting everyday lives and try to act.”
The pharmaceutical industry is likely to object.
Ryan warned stakeholders Wednesday that they need to look at the whole system and not just focus on one aspect of healthcare.
“This is a complex negotiated system,” Ryan said. “If you’re not careful about what you ask for and what you disclose you can have an impact of increasing prices.”
She said the state has to be careful about asking for proprietary data that could undermine savings the pharmaceutical companies have negotiated.
She said there are also more high-deductible health insurance plans in the marketplace these days so those consumers are probably feeling it a little more at the pharmacy counter.
Sabrina Aery of Bristol Myer said there’s also federally mandated pricing for certain populations.
At the same time “there are significant discounts that are out there” that pharmacies and providers can access, she said.
Healthcare Advocate Ted Doolittle said that at the end of the day, there’s still a price problem.
“People can’t ascertain value at the pharmacy counter,” Doolittle said. “That’s the wrong place to have us comparison shopping.”