The rising cost of prescription medicine was the issue of the day before the House Health Policy Committee as it took up two bills March 4, one to bar so-called copay “accumulators” and a second to require drug makers to report price increases to the state.
HB 4353, sponsored by Rep. Bronna Kahle (R-Adrian), would require all copays to count toward an insured’s deductible and out-of-pocket costs. HB 4347, by Rep. Angela Witwer (D-Delta Twp.), would require manufacturers to report price increases to the Department of Insurance and Financial Services.
The bills are reintroductions of legislation considered last term.
Sarah Procario of the Hemophilia Foundation of Michigan told the committee many patients rely on copay assistance programs run through nonprofits or the drug manufacturers themselves in order to be able to afford their medicines.
“Unfortunately, . . . a growing insurance trend is jeopardizing the benefits of copay assistance,” Procario said. “Copay accumulator adjustment programs bar all copay assistance from counting toward patients’ out-of-pocket costs making it harder for them to access their life-saving and life-enhancing medications.”
Insurance companies don’t prohibit the use of copay assistance, she explained, “but when it runs out, typically a few months into the year, the patient will still be responsible for their full deductible and maximum out-of-pocket costs.”
In effect, the patient is required to pay the bill twice, once through copay assistance and again out their own pocket.
“With the average deductible of over $3,000 and out-of-pocket maximums reaching $10,000 and upwards per individual, this is a discriminatory practice,” Procario said.
Kahle explained her legislation calls for an insurer to count all copay assistance toward the insured’s maximum out-of-pocket costs and deductible.
“Many health plans and pharmacy benefit managers (PBMs) say these efforts impact their ability to manage costs. As a result, health plans and PBMs have pushed back against these coupons with something called accumulator programs,” Kahle said. “. . . What happens then is that some patients are caught unaware when the value of the coupon runs out and suddenly still have large out-of-pocket costs and their full deductible yet to be paid.”
Procario said a review of health plans for 2021 showed that all nine individual health plans have added copay accumulator adjustment programs.
Witwer’s HB 4347 would require drug manufacturers to submit a report to DIFS within 30 days of increasing the wholesale acquisition price of a drug by 15 percent or more in a given year or 40 percent or more over three years. The report would have to include the name of the drug, whether it is a brand name or generic, the effective date and percentage of change of the cost, the company’s research and development costs for the previous year, and the money available from the state or federal government for research and development.
The requirement applies to drugs with a wholesale acquisition price of $500 or more for a 30-day supply.
Witwer said nearly 18 percent of adults report they skip taking their medication as it is prescribed because of the cost.
“Even in my own neighborhood, I have a person that lives a couple blocks away. She has MS (multiple sclerosis). She is not capable of affording the copay of this and she came to our office and said that the drug that she needed to take was more than her house payment. She had to choose between that and paying for her house payment every month,” Witwer said.
But the bill would require significant reporting mandates “that will not help patients whatsoever,” said Sharon Lamberton of the Pharmaceutical Research and Manufacturers of America (PhRMA).
She contended prices for medicines only increased 1.7 pecent in 2019 once negotiated rebates and discounts are subtracted from the prices. Further, only 6 percent of health care spending in Michigan is for prescription drugs, Lamberton said, the rest is for long-term care, health care and provider services.
“Drug development is extremely risky. It takes about 10 to 12 years to bring a drug to market. It is $2.6 billion to bring that drug, and 88 percent fail. Only 12 percent make it. In the vaccine market, it is even more risky. We have 95 percent failure and so it this very risky proposition to undertake the development of these brand-name medicines,” Lamberton said.
Manufacturers are not the sole entity that sets the price, she contended.
“There multiple supply chain stakeholders involved in setting the price that the patient ultimately pays. There’s PBMs, there’s plans. You know that the supply chain stakeholders are complex but we are not the ones that set that price,” Lamberton said.
That frustrated Rep. Roger Hauck (R-Union Twp.).
“I’ve never seen an industry where nobody wants to tell anybody what anything costs. We don’t know. Procedures cost different, the same procedure. When you go to buy a gallon of milk, if the price goes up you don’t buy that gallon of milk, but if you have prescriptions, you need to take those prescriptions. So you can see our struggle to represent the people in our district. They’re frustrated. We’re frustrated. And whenever we talk to any groups, it always seems to be everybody else’s fault but the group that is testifying.”
Blue Cross Blue Shield on the other hand supports the bill, according to Tim Antonelli, its manager of clinical programs and pharmacy policy. He said actuaries have predicted national spending on prescription drugs will increase another $200 billion annually in the next eight years.
“In 2021, it has already been reported that more than 500 drug prices increased. Last month, the Institute for Clinical and Economic Review released their 2021 unsupported price increase report and, looking at the top 10 products with price increases, seven of them were unsupported with new clinical information. And price increase of just these seven drugs is estimated to have a $1.1 billion impact on spending at the national level,” Antonelli said.
If anything, the thresholds in the bill for having to report—15 percent in one year, 40 percent in three years for drugs costing $500 or more a month—should be lowered, Antonelli said.
Health Policy did not vote on the bills.
Rendon: Oral Chemotherapy Would Covered On Par With IV Chemo
Chemotherapy in pill form would have to be covered in the same manner as intravenous (IV) chemotherapy under legislation considered by the House Insurance Committee.
HB 4354, sponsored by committee Chair Daire Rendon (R-Lake City), would prohibit health insurance from imposing costs on orally administered anticancer medications that are higher than those imposed on intravenously administered medications.
The bill is a reintroduction of legislation from 2018.
Rendon said she herself had cancer at one point. To get intravenous treatment, a patient had to travel to a hospital or clinic and the treatment could take up to four or five hours, plus preparation time.
Rendon said she had to return 48 hours later for shot to control nausea and was often back at the hospital three to four days later to deal with complications.
“I was thrilled, after I had my recovery, to find out there were new drugs that could be administered for some of the cancers that I actually experienced that could be given orally, in a pill form. Unfortunately, because they were new, they were very expensive,” Rendon told the committee.
She has a constituent with leukemia. When he started treatment with oral chemotherapy the drugs were $3,200 a month. Now he’s on stronger meds, she said, which cost $12,000 a month.
The bill is opposed by business groups including the Michigan Chamber of Commerce, the National Federation of Independent Business, the Small Business Association of Michigan and the Detroit Regional Chamber.
Bret Jackson of the Economic Alliance of Michigan said there was a flurry of similar bills in states across the country from the early 2000s to 2010 “because there was a problem.”
“For IV chemotherapy, the total cost would be about $1,600 and for oral chemotherapy it would be over $37,000. As you can imagine, because of the 50 percent co-insurance that was in place at the time, patients paid $18,000 on average for oral chemotherapy, more than what they would have paid for IV chemotherapy, which was just $160.” Jackson said.
That’s no longer the case, Jackson said. Things have changed and oral chemotherapy is considered the standard of care for many cancers, so it is covered. Plus, the Affordable Care Act has put an out-of-pocket maximum on drugs.
Today, oral chemotherapy drugs still cost more out-of-pocket for patients than IV chemotherapy, but the difference is about $900.
And when other cancer therapies are considered, like surgery, radiation and specialty drugs, “patients are paying less for oral chemotherapy than they are paying for all of those other things,” Jackson maintained.
The Insurance Committee did not vote on the bill.
This story courtesy of MIRS, a Lansing-based news and information service.