State lawmakers presented legislation this week aimed at tackling the rising cost of prescription drugs, which they say is a major driver in the cost of health care — leaving Connecticut families struggling and leading to cost overruns in the state budget.
For months, a bipartisan task force — made up of legislators from both sides of the aisle, as well as representatives from the pharmaceutical and insurance industries — has been meeting regularly to weigh possible solutions to the rising cost of medications.
The group’s conclusions, outlined in a final report and encompassed in House Bill 7192, call for regulating pharmacy benefit managers, increasing price transparency, and studying Canadian drug imports and drug shortage mitigation strategies.
“There’s a lot of folks in the state of Connecticut who are struggling with the cost of living, and one important piece of that puzzle is the cost of health care. A major driver of the cost of health care are prescription drug costs,” Rep. Jillian Gilchrest, D-West Hartford, said.
Gilchrest served as a co-chair of the task force, along with Sen. Matt Lesser, D-Middletown, Rep. Tracy Marra, R-Darien, a trained pharmacist, and Sen. Jeff Gordon, R-Woodstock, a practicing physician. During a press conference at the state Capitol on Tuesday, the chairs announced the bill and highlighted the urgency of controlling the price of medication for Connecticut residents.
“More and more each year, I see hardworking people and families and retirees not able to afford the cost of their drugs,” Gordon, whose medical career spans over thirty years, said.
Pharmacy benefit managers
Pharmacy benefit managers, commonly referred to as PBMs, serve as middlemen helping to manage drug benefits for health plans. Regulating these companies is a major focus of the legislative proposal.
The PBM industry arose to help health plans negotiate with drug companies and save money on prescriptions. But after a New York Times investigation last year, PBMs have come under fire for driving up costs for people and health plans in order to reap bigger profits for themselves.
H.B. 7192 includes several measures seeking to rein in PBMs, including one that would require any PBM to act as a “fiduciary,” which legally binds them to make decisions in the best interest of the health plans they work with.
The bill also proposes “delinking” PBM compensation from the cost of a medicine, which advocates say will remove incentives for the companies to favor higher-priced drugs. It also would ban contract provisions that allow for “spread pricing,” a practice through which critics say PBMs charge health plans more than they pay for the drug and pocket the “spread,” or difference, for themselves.
Sam Hallemeier, a representative from Pharmaceutical Care Management Association, a national PBM trade group, opposed the bill, testifying that it would “restrict [PBMs’] ability to put downward pressure on the rising cost of prescription drugs” and result in increased costs for Connecticut consumers.
The bill also aims to study ways to increase the supply of drugs in Connecticut through strategies like importing drugs from Canada and expanding in-state production of drugs at risk of shortage.
Other legislation proposed this session includes similar provisions to tackle prescription drug costs.
S.B. 11, a Senate Democrat priority bill, contains all the measures from H.B. 7192, but also also addresses other issues, including expanding Medicaid coverage of emergency medical conditions and requiring nursing homes to spend 80% of funding on direct care.
Gov. Ned Lamont proposed his own bill, H.B. 6870, to address prescription drug costs, which includes studying the feasibility of a Canadian drug importation program. It also includes other measures, including one to limit price increases for generic drugs to the annual rate of inflation.