Curbing high prescription drug prices is one of the healthcare priorities that state legislatures will be pursuing in 2022, experts said Friday at a briefing sponsored by the Alliance for Health Policy and Arnold Ventures.
Prescription drug spending has been a high priority for the last 6 years, according to Maureen Hensley-Quinn, MPA, senior program director of coverage, cost, and value at the National Academy for State Health Policy. Her organization brought state officials together in 2016 “and asked, ‘What is keeping you up at night?’ and it was prescription drug costs,” she said. “It came on the heels of the hep C cure, which was amazing and groundbreaking, but incredibly expensive — at a million dollars for a treatment cycle, it was taking over Medicaid budgets.”
“State budgets were truly being dominated in a way that they were not anticipating by this drug, and state officials across Medicaid, employee health plans, and others did not want to be in a position to say, ‘No, we can’t provide you this life-saving, life-changing prescription drug,'” said Hensley-Quinn. “And so I believe that was an initial catalyst.” Laws regulating prescription drug prices have been enacted in all 50 states, and since 2017, 49 states have enacted more than 200 such laws, she said.
State efforts to contain prescription drug costs have taken a variety of forms, said Colleen Becker, MPP, senior policy specialist at the National Conference of State Legislatures. “Many legislators have focused on reducing consumers’ out-of-pocket costs, and one of the most prominent examples of that is insulin,” she said. “The most common state action is limiting copays for insulin, and 19 states currently have laws which limit that amount and [limits] range anywhere from $25 to about $100 for a 30-day supply.” In addition, “there’s also been momentum around access to supplies such as continuous glucose monitors; some states have even developed a state-run patient assistance program,” said Becker.
Another area of consumer action has been laws regarding copay accumulators — this is when insurers bar patients from using drugmakers’ copay coupons to help offset their plan’s drug copays and deductibles. “Currently, 12 states and Puerto Rico have a requirement that any payment or discount made on behalf of the patient must be applied to a patient’s annual out-of-pocket cost-sharing requirements,” Becker said. States also have been looking at drug importation as a possible way to cut costs for patients. However, “even though eight states have importation laws, the state must first get their importation plan approved by the federal government,” and none has thus far, she said.
Pharmacy benefit managers (PBMs) also have come under state scrutiny. “Last year, we tracked about 247 bills related to PBM reform, and that’s about a third of total proposed prescription drug legislation,” Becker noted, adding that about half of those bills were enacted. “This is very much an area where we’ve seen bipartisan support … A common approach is requiring PBMs to register or obtain licensure to do business in the state.”
Prohibiting PBMs from enforcing “gag clauses,” which limit a pharmacist’s ability to inform a patient if it would be cheaper to pay out-of-pocket for a drug rather than use their insurance, is another popular approach — “over 30 states have this type of legislation implemented, and we’re seeing it already proposed for 2022,” she added, noting that there is also a federal prohibition against gag clauses. From a purchaser standpoint, some states are using “reverse auctions,” in which PBMs compete to contract with the state’s employee benefit plan, and the PBM with the lowest-priced offer wins.
Prescription drug affordability boards are another strategy being pursued by the states, according to Becker. “Some folks are seeing these boards as having the potential of helping policymakers drill down on costs and really helping to find viable solutions. Eight states have pursued this approach, and so far we’re tracking three [more] states for 2022.”
Although prescription drug prices are a big focus of state legislators’ attention, “by far the largest proportion of U.S. healthcare spend is on hospitals, health systems, and high-cost providers,” said Hensley-Quinn. State legislators are seeking to address those prices in a variety of ways; for example, “there are a growing number of states seeking the collection of detailed hospital price cost and financial data to inform their policy approaches,” and states are also “seeking authority to mitigate further consolidation or enforce anti-competitive contracting [bans] among hospitals, health systems, and health plans,” she said.
States are also starting to plan for the end of the COVID-19 pandemic, said Stephanie Anthony, JD, MPH, senior advisor at Manatt Health, a professional services firm. She noted that the public health emergency declared by President Biden is currently set to end on April 15, although it may be extended. The Families First Coronavirus Relief Act requires states to extend Medicaid eligibility through the public health emergency, so “many states are starting to think about that and determine their approaches for restarting eligibility determination,” Anthony said.