HARTFORD, CT — A bill designed to bring prescription drug price hikes under control was praised by some and panned by the industry Thursday.
The bill would require pharmaceutical manufacturers to send notice to the Insurance Commissioner regarding agreements to delay the release of a generic drug in exchange for compensation from the brand name distributor.
It would also leverage the state comptroller’s purchasing power by allowing him to purchase prescription drugs for private employers and it would prohibit any health carrier or pharmacy benefit manager from recouping any portion of a claim that has been paid to a pharmacy or pharmacist. It also establishes a task force to study drug reimportation from Canada.
“Every single Connecticut resident is feeling the effects of rising prescription drug costs,” Rep. Sean Scanlon, D-Guilford, said Thursday. “The people of this state are fed up and want us to do something to lower their drug costs.
“By passing this legislation, we can give people the immediate relief at the pharmacy counter that they are demanding and they deserve,” Scanlon added.
Sen. Matt Lesser, D-Middletown, said he’s heard countless stories about the issues Connecticut residents have encountered due to the high cost of potentially life-saving prescription drugs.
“We are in a position to change that for our state’s residents and we are working toward that goal,” Lesser said.
State Comptroller Kevin Lembo agreed.
“It is not a secret that this is a national crisis,” Lembo said. “Connecticut is going to call the shots on health care quality and cost now — and what we want is the best care for the best price.”
Lembo said the legislation includes three key provisions: it exerts the state’s purchasing power to extend discounts to all citizens; extends the state prescription plan to private employers; and provides for a drug importation cost analysis.
“Drug costs in Canada are approximately 50 percent less than they are here in Connecticut and across the United States,” Lembo said. “This drug cost disparity is completely unjustified and unacceptable.”
Nora Duncan, state director of the AARP, said she believes the bill is a step in the right direction.
“We recently heard from a man in Shelton who pays $1,500 every month for medication to address Crohn’s disease,” Duncan related. “He told us he can no longer afford this expense and would have to stop taking the medication and deal with the consequences.”
Testifying against the bill at the Insurance and Real Estate Committee’s public hearing was the Pharmaceutical Research and Manufacturers of America (PhRMA).
PhRMA testified that Connecticut already passed strong legislation in this area and “HB7174 ignores those recent efforts.”
The testimony states that the legislation ignores the “unique needs of patients, and may have the unintended consequence of delaying market entry.”
“House Bill 7174’s price reduction triggers are intended effectively to negate certain market-entry agreements between brand manufacturers and generic competitors by nullifying the benefit of such agreements and actively penalize the brand manufacturer for entering into such agreements. Such a substantial impairment on manufacturers’ right of contract raises serious concerns of state overreach and intrusion into the private marketplace.”
Asked about why this year’s bill was necessary, Scanlon said last year’s bill was more about “finding what drives the costs.” He said “this year the goal is to attempt to get some relief (from those costs).”
Last year the General Assembly passed a bill imposing stricter reporting requirements on pharmaceutical companies and pharmacy benefit managers. That law requires drug companies to justify any price increase exceeding 20 percent that a prescribed drug goes up in any year; additionally a drug company would have to justify any price increase of more than 50 percent over a three-year period.
The 2018 law further mandates that consumers get immediate relief at the pharmacy counter — paying post-rebate costs instead of a drug’s list price.
But PhRMA isn’t the only industry group opposed to the legislation. The Connecticut Business and Industry Association also is opposed.
“CBIA opposes HB 7174 because the creation of a government-run prescription drug program would unnecessarily disrupt the current prescription drug marketplace and result in further costs,” Michelle Rakebrand, assistant counsel for the CBIA, said in her testimony.
She objected to the replacement of the Pharmacy Benefit Manager with a state-run prescription drug program for self-insured plans offered in the private marketplace.
“PBMs are projected to save consumers up to 30 percent on drug benefit costs over the next decade, which amounts to $654 billion,” Rakebrand testified.
She said PBMs “aggregate demand to gain leverage in the market, something that cannot feasibly be done by the state of Connecticut on the same scale.”
CBIA also runs a small-business health insurance exchange.