High Prescription Drug Costs: What Other States Are Doing

June 20, 2019

By Jill Zorn |

States are continuing their efforts to address high prescription drug costs.

Connecticut did not pass anything of note this year, but we passed important bills in both 2017 and 2018. The earlier bill banned “gag clauses” which prevent pharmacists from letting customers know if a lower cost equivalent alternative is available and “clawbacks” to prevent charging a co-pay that is higher than the actual cost of the drug. Last year’s bill focused on transparency – making more information available about costs and cost increases.

Our state’s Health Care Cabinet also conducted a major study in 2017, producing a report: Recommendations on Pharmaceutical Cost Containment Strategies in February 2018.

While some states are still trying to catch up with what Connecticut has already achieved, others are pursuing different approaches. Here are four that are getting major attention.

Importing Drugs from Canada

Connecticut tried and failed to pass a bill to set up a program to import drugs from Canada. However, at least two states, Colorado and Florida, did pass importation legislation this year, while Vermont passed a bill in 2018.

Drug prices in Canada are far lower than in the United States. And while Big Pharma likes to employ scare tactics, implying that importing drugs may not be safe, the fact is that we already rely to a great degree on imported medications; 40% of all drugs sold in the US are imported and 80% of active ingredients are produced abroad.

How these states will fare in implementing their bills remains to be seen. Some advocates have raised concerns about this policy – see page 3 of this Families USA guide, State Models for Addressing High and Rising Drug Prices. While another group, National Academy for State Health Policy (NASHP) has written model legislation for states to follow.

Drug Affordability Review Boards

New York State was the first state to establish a board to review high cost drugs, but its Drug Utilization Review Board is limited to reviewing Medicaid expenditures only.

This year Maryland passed legislation to establish a Prescription Drug Affordability Board. The Board will study and make recommendations on how to address high drug costs. But over the course of several years, it is also authorized to identify drugs that create affordability challenges for state and local government, and possibly to set upper payment limits on those drugs.

Connecticut’s Health Care Cabinet recommended setting up a Drug Review Board. It may be time to revisit this recommendation next year, taking into account the approaches underway in other states.

Pooling State Purchasing Power

More and more states are looking at pooling their purchasing power to get better prices on prescription drugs. Delaware established the Interagency Pharmaceuticals Purchasing Study Group and New Mexico passed legislation to establish the Interagency Pharmacy Purchasing Council. This group will look at ways to pool prescription drug purchasing power to help the state budget as well as all state residents. California’s new governor, Gavin Newsom signed an executive order on his first day in office to combine prescription drug purchasing by Medicaid with the purchasing power of other state agencies. As a first step, they are taking prescription drug purchasing away from the private insurance companies that currently cover those on Medicaid in California.

Connecticut has the ability to follow the lead of these states, particularly since we already manage our Medicaid program ourselves and don’t contract out to private insurance companies. This session HB 7174, a bill to allow people not covered by the state to benefit from the state’s negotiating power, did not make it to the floor of either the House or the Senate. Hopefully some of the ideas in this bill can be raised again next year.

Insulin

One of the most outrageous examples of out-of-control prescription drug prices is the cost of insulin. Once an inexpensive drug, prices have risen over 700% in the last 20 years. In response, states have passed bills that focus specifically on access to insulin.

A growing number of states have passed versions of Kevin’s Law. Kevin’s law is named after Kevin Houdeshell, a 36-year-old with Type 1 diabetes who died in January 2014, when his prescription for insulin expired and he was unable to reach his doctor during a holiday weekend to get refills authorized. The law allows pharmacists to dispense an emergency supply of insulin to those who need it.

In May, Colorado became the first state to cap what patients pay out of pocket for insulin at $100 per month.

Conclusion

This blog provides a brief overview of several paths different states are following to help residents struggling to afford their medications. To learn more, you may want to check out this NASHP resource that lists and categorizes legislation introduced by state. Also watch this site for more blogs on this topic.

 

 

 

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