Three bits of news for the legislator-members of the Joint Commission on Health Care could turn some serious General Assembly attention to the price of drugs next year.
One, a State Health Access Data Assistance Center (SHADAC) analysis of National Health Interview Survey Data that some 28% of Americans aged 16 to 64 have stopped taking medicine as doctors prescribe because they can’t afford to.
Two, that it takes eight arrows between six separate boxes on a Power Point chart to trace the flow of money that eventually brings medication to patients.
Three, that 47 states — but not Virginia — are trying to regulate a key middleman in that money flow.
“Virginia is a little bit behind the curve,” commission senior analyst Paula Margolis told the legislators.
But it’s a daunting task to figure out why drug prices are soaring, she said.
“Practically nobody knows the real price anybody pays,” she said.
In fact, her 31-page presentation on drug pricing detailed nine different prices that patients, insurers, state Medicaid agencies, pharmacists, wholesalers and drug-makers throw around. That’s on top of the discounts and rebates various actors negotiate, pretty much only for the purpose of steering people to one particular medication over another. And — don’t be shocked now — sometimes the choice of that medication has more to do with somebody’s profit margin and its effectiveness.
Among the options Margolis reported other states are trying are:
laws requiring better disclosure of prices, rebates and discounts arranged by pharmacy benefit managers — the firms, increasingly owned by insurance companies these days, originally set up to manage insurers’ drug costs.
laws formally requiring pharmacy benefit mangers to act in the interest of patients and their health plans.
banning a practice called “spread pricing,” where the agreed-upon price a health plan pays the PBM for a patient’s medication is more than the PBM pays the pharmacy, with the PBM keeping the difference. The alternative is “pass-through pricing,” where the PBM charges the insurer what it actually paid a pharmacy. PBMs then get a separate fee for their administrative and clinical services. (Del. Keith Hodges, R-Urbanna, has tried legislation to crack down on spread pricing by bringing it under the eye of the Bureau of Insurance, but without success.)
laws requiring disclosure of the rebates that PBMs get from manufacturers in return for favoring their products.
laws banning generic drug makers from accepting money from brand-name medication manufacturers to delay introduction of lower cost generic drugs.
laws banning manufacturers from issuing coupons to cover patients’ out-of-pocket expenses, in order to steer them to buy costlier drugs.
laws allowing state Medicaid and public employee health plans to buy drugs in Canada, where costs are lower
action to cap the price of some drugs. (Newport News School Board member Shelly Simonds, the Democratic candidate to represent Newport News’ 94th House district, says she wants to introduce legislation modeled on Maryland’s version of this approach.)
The commission didn’t decide on what, if anything, it would recommend.
But “We’re going to have to do something,” said state Sen. John Edwards, D-Roanoke, a member of the commission.
“Twenty-eight percent of people, that’s huge.”
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Shad Plank is the Daily Press blog that tracks Virginia politics. It takes its name from the traditional Shad Planking political get-together, though hopefully it is tastier than the roasted fish featured at that Sussex County event. To contact Dave Ress with tips or questions, call 757-247-4535 or email dress@dailypress.com.
