Will Price Transparency “Unintentionally Raise Costs”

  • by: Peter Pitts |
  • 03/07/2018
Here’s the PBM argument – blame drug companies for high prices and complain when they’re asked to be transparent about their own discounts. Per Express Scripts, transparency will “unintentionally raise costs.” Hm.

Legislators seek to protect consumers from high drug prices

HARTFORD — For six months, Branford resident Robin Comey waited for the price of her son’s prescription asthma medication to drop.
She scoured the internet for coupons and researched generic alternatives, but the cost cut her family needed never came.

Self-employed, Comey has health insurance, she said, but even with deductibles the price of her son’s medications were sometimes out of reach. She was already spending nearly $2,000 a year on epi-pens for her son’s food allergies.

“Our family feels a little bit taken advantage of,” Comey told legislators Tuesday.

Legislators and State Comptroller Kevin Lembo hope to make medications more affordable for Connecticut residents like Comey by increasing transparency around prescription drug pricing.

A bill they unveiled Tuesday would allow consumers to pay post-rebate costs instead of marked-up retail prices for prescription drugs.

In addition, drug manufacturers would be required to justify price increases above 25 percent, and pharmacy benefit managers — middlemen like CVSHealth and Express Scripts — would have to disclose the rebates they receive from manufacturers and how much of the rebate was passed down to consumers.

Lembo said most people pay inexplicable drug price mark-ups without even realizing it through insurance premiums, taxes and buying prescriptions.
“There is only one way to bring any free-market fairness to this realm: by shining a bright light onto a shadowy market,” he said.

Rep. Sean Scanlon, D-Guilford, said he hopes the legislation will uncover why drug prices are rising so health care costs can ultimately be lowered.
“Prescription drug costs are the fastest rising cost in health care and consumers are rarely given an explanation when the costs of their drugs increased,” he said.

Although the proposed bill received support from AARP and many individuals, it faced opposition from pharmacy benefit managers, health organizations and the Connecticut Insurance Department in a public hearing Tuesday.

The Pharmaceutical Care Management Association, a trade association for pharmacy benefit managers, argued that such legislation is preempted by federal benefits law and therefore is unconstitutional. They also said the bill might damage PBMs’ ability to negotiate lower drug costs.

“Any public disclosure of rebate information would allow manufacturers to learn what type of price concessions other manufacturers are giving, thus establishing a disincentive from offering deeper discounts,” said April Alexander, assistant vice president for State Affairs for PCMA. “This transparency will not lead to better health care or lower health care costs.”

Express Scripts, a PBM, also testified that secrecy was a necessary part of obtaining rebates for consumers and disclosing them would  

Connecticut’s largest union of doctors and health care workers District 1199 opposed the bill because they thought it did not go far enough to stop price gouging by drug companies.

The National Physicians Alliance in Connecticut called it “toothless.”

Both groups urged legislators to implement the Connecticut Healthcare Cabinet’s recommendation to establish a Drug Review Board to investigate price abuses and empower the Attorney General to act on uncovered abuses.

The Insurance Department claimed it did not have the authority or personnel to oversee parts of the bill.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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