(Opinion) Granite State Patients Save with Senate Bill 555

Jan Hanson

BY JAN HANSON

Granite Staters need relief from the high cost of prescription drugs. SB 555, a bipartisan bill, sponsored by Sen. Kevin Avard, recently passed the Senate 19-4 and is now making its way to the House, which will help provide important savings to patients at the pharmacy counter.

High drug costs are a burden for many Americans, but they are especially burdensome for people with a chronic disease that requires long-term treatment with medications. For example, consider asthma which affects 27 million people in the United States. Asthma is a chronic disease, which causes the airways to narrow and become inflamed, which can make breathing very difficult. Symptoms include shortness of breath, coughing, wheezing and chest tightness (pain).

Asthma patients may also be affected by workplace and school environments that have irritants and other common triggers such as pollen, certain gases, dust mites and smoke. Asthma episodes affect job performance, school performance and lead to emergency department visits and hospitalizations. Asthma can’t be cured, but it can be managed, including with prescribed medications that help prevent symptoms. When a patient is prescribed a medicine to treat asthma, it is critical that the medication is affordable. Unfortunately, issues in our health care system often make medicines too expensive and unaffordable.

Drugmakers set the initial price for medicines, and while they must do better at keeping those prices low, they don’t decide what is being paid at the pharmacy. That responsibility lies with middlemen, known as pharmacy benefit managers, or PBMs. These intermediaries work for insurance companies and decide what medicines are covered by insurance and how much people pay out of pocket. Just three PBMs control 80% of this market, and either own or are owned by the largest insurance companies.

PBMs negotiate with drugmakers and extract rebates that lower the price of medicines. Rebates collected by PBMs aren’t shared directly with patients. If you have a deductible or pay coinsurance (a percentage of the drug’s cost), your out-of-pocket expenses are based on the full price of that medicine. The insurance company and PBMs often retain a significant rebate. While rebates can reduce the price of medicines by half or more, these cost-savings are not always fully passed on to the consumers of prescription drugs.

SB 555, a bill being considered by the state legislature, would help improve this system. This bill would require that 50% of all rebates be passed along to patients through lower costs at the pharmacy. It would also improve transparency by strengthening reporting requirements around the total number and value of rebates health insurers and PBMs collect.

Other states, such as West Virginia and Arkansas, have tackled high drug costs with a similar approach. The results of these changes are in: People are paying less, and there has been no impact on the cost of insurance premiums. It’s a win-win for patients and families.

When managing a chronic disease that requires treatment with prescription medicine, the last thing anyone should worry about is whether they can afford their medicine. SB 555 would require that savings in the system go to the patients who need them and would bring meaningful relief to patients with asthma and other chronic diseases so that better health outcomes are achieved.

Jan Hanson is president of the Asthma and Allergy Foundation of America, New England Chapter.