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Colorado Legislature moves ahead on prescription drug transparency, reinsurance

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April 8, 2019, 7:03 am
high cost of prescription drugs

The Colorado Legislature continues to make moves to chip away at the ridiculously high cost of health care and health insurance on Colorado’s Western Slope, advancing a bill to create a reinsurance program and introducing a bill aimed at daylighting prescription drug prices.

The reinsurance bill, House Bill 1168, received an initial vote of approval on Friday, and HB 1296 – a prescription drug transparency bill — was recently introduced. Both are sponsored in the state Senate by Kerry Donovan, a Vail Democrat.

Here’s a press release from Colorado Democrats on the bipartisan reinsurance bill, also sponsored in the Senate by Republican Bob Rankin of Carbondale and in the House by Democrat Julie McCluskie of Dillon. It’s followed by a re-post of a story on the prescription drug bill produced by RealVail.com that ran in the Vail Daily on Sunday.

House Approves Bipartisan Reinsurance Bill to Help Lower the Cost of Health Care 

The House gave preliminary approval via a voice vote for two bills to help lower the cost of health care and rural EMTs. 

Coloradans on the individual market are struggling to keep up with the out-of-control costs of health care, particularly in rural areas of the state. By establishing a reinsurance program Colorado can stabilize the individual marketplace, increase health insurance participation and share the risks more broadly. 

“We’ve already seen in a recent report that reinsurance will work to lower the cost of health insurance premiums, especially on the Western Slope,” said Rep. Julie McCluskie, D-Dillon. “This will have a meaningful reduction in health insurance rates on the individual market across the state. We don’t have any more time to waste. People are deciding between paying their mortgage and their health insurance right now. We’ve worked closely with our hospitals, insurance companies, providers and other stakeholders to deliver a program that will finally do what it’s intended to do — save Coloradans money on their health care.” 

Rising health care costs are driven in part by the underlying cost of care but are exacerbated by an insurance market that assigns the highest risks and highest costs to the individual market. This is particularly the case on the Western Slope and in rural Colorado, causing families and individuals to forgo health insurance coverage and putting them at major risk of medical debt if emergencies arise. 

Rep. McCluskie introduced the bipartisan bill in the House with Rep. Janice Rich, R-Grand Junction. Sen. Kerry Donovan, D-Vail, and Sen. Bob Rankin, R-Carbondale, are the Senate sponsors. 

Recently, the Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), released an actuarial study on the reinsurance program. The Colorado Reinsurance Program Analysis looked at multiple scenarios that showed the expected reductions to the costs of medical claims through Medicare-reference-based pricing. These reduced costs lead to a statewide decrease in individual health insurance premiums of nearly 23 percent, or approximately $250,000,000.   

This bipartisan bill aims to reduce insurance premiums for individuals and families by January 2020 to provide much-needed relief to Coloradans, many of whom are paying up to a third of their income on monthly premiums. Our state, especially the Western Slope, has some of the highest health insurance costs in the country. 

The bill will establish three tiers, from the highest cost areas of the state to the lowest cost areas, in order to pass savings on to Coloradans. The first tier, consisting of regions in the state with the highest costs, will experience the greatest reduction in premiums, by 30 to 35 percent. The second tier will experience reductions in premiums by 20 to 25 percent. Finally, the third tier, regions with the lowest costs, will experience reductions in premiums by 15 to 20 percent. 

HB19-1168 will receive a final vote at a later date. The House also approved SB19-052, sponsored by Rep. Kyle Mullica. This bill would allow EMS workers to work under the medical supervision of a licensed physician, physician assistant, advanced practice nurse, or registered nurse at a clinic or health facility. 

“SB 052 will allow for more EMTs to come into health care facilities and clinics to help care for these patients. This will allow rural clinics and cities that have hard-to-get-to facilities to tend to more patients,” said Rep. Mullica, D-Northglenn. “Currently patients end up suffering because they have to drive further for care because clinics are closing down in their area.” 

SB19-052 will receive a final vote at a later date.

Now here’s the prescription drug story:

Local lawmakers leading charge to bring down drug prices

The skyrocketing cost of prescription drugs in the United States is consistently cited as a primary driver of escalating health insurance and overall health care costs in Eagle County and across Colorado’s Western Slope. Lawmakers are trying to finally do something about it this legislative session, and local elected officials are once again at the forefront of that fight.

Sponsored by Sen. Kerry Donovan, D-Vail, introduced late last month and now in the House Finance Committee, HB 1296 would compel drug manufacturers, health insurance companies and others to report specific information about drug costs to the state commissioner of insurance, who would then produce a report on how those costs are impacting health insurance rates.

“Too many families are making hard choices when it comes to paying for prescription drugs, but no one can seem to explain why prices continue to rise,” Donovan said. “By requiring manufacturers, insurers, and others to provide specific pricing information, we can explain why prescription prices are skyrocketing and find ways to lower costs for Coloradans.”

Avon Democratic state Rep. Dylan Roberts is a co-sponsor of the bill in the House.

“Prescription drug prices are out of control and we must act,” Roberts said. “The bill is a broad and comprehensive price transparency measure that will shed some much-needed sunlight on the entire prescription drug pricing chain for all of the most commonly used and expensive drugs.”

The bill would compel drug manufacturers to provide notice of and justify price increases, require insurers to pass rebates on to consumers and direct Pharmacy Benefit Management (PBM) firms – the companies that negotiate drug prices between manufacturers and insurers – to report on the percentage of rebates they retain.

“Drug corporations are price-gouging consumers by profiting off of medicines and making higher profits than any other industry with unjustified, overnight price hikes,” said Adam Fox, director of strategic engagement for the nonprofit Colorado Consumer Health Initiative (CCHI). “Policymakers need to understand why drug prices are going sky-high and driving up health care costs.”

Another bill sponsored by Roberts in the House and Donovan in the Senate is aimed directly at capping the cost of one particular prescription drug — insulin. HB 1216 would cap copays for insulin, which currently can exceed $600 a month, at $100, and it would direct the attorney general to investigate pricing and report to the governor, insurance commissioner and legislature.

The bill is personal for Roberts, whose brother Murphy died in a fall related to a diabetic seizure.

“Insulin is probably the most egregious example of prescription drug price increases,” Roberts said. “A vial of insulin cost $20 in 1996, and it now costs over $300 per vial — for the exact same medicine. Combine that with the fact that for people with Type 1 diabetes, and some with Type 2, insulin is like oxygen. You die if you don’t have it daily.”

But the cost of the drug has forced some diabetics to ration its use, Roberts said. His bill passed its first committee vote with bipartisan support.

Gov. Jared Polis and Lt. Gov. Dianne Primavera on Thursday specifically cited skyrocketing drug prices as they unveiled their “Polis-Primavera Roadmap to Saving Coloradans Money on Health Care.” They also noted, while rolling out the new plan, that “the cost of care has been increasing at an alarming rate, especially in rural areas and mountain communities.”

Roberts and Donovan have also been leading the charge on reforming the state’s health insurance system – from a public option to reinsurance. Polis and Primavera also talked about those solutions Thursday as part of their broader plan to bring down rates and overall health care costs.

“Addressing the high cost of health care is one of my biggest priorities this session, and an important part of this effort is aimed at reducing prescription drug costs,” Donovan said.

But it’s at the federal level where the most impactful legislation and rulemaking will have to take place, and Congress has long been gridlocked on how best to bring health care prices, insurance rates and drug costs.

President Donald Trump has signaled for more than two years that runaway drug prices would be a target of his administration, but his tough talk has yet to result in much action. Medicare still pays 80 percent more than consumers pay in other industrial countries for some of the most costly drugs, according to a government study from last year.

That may be finally changing, with some smaller measures aimed at boosting generic drugs gaining some bipartisan traction just this week. Drug manufacturers, however, are pushing back – battling hard for a proposed Department of Health and Human Services rule change that would eliminate the rebates negotiated by Pharmacy Benefit Management (PBM) companies.

Backed by prescription drug manufacturers as a way of cutting costs by eliminating the middle man – and set for a Senate hearing Tuesday of next week – the rulemaking would essentially leave the fox guarding the henhouse, according to the Campaign for Sustainable Rx Pricing (CSRxP) – a coalition of doctors, hospitals, health plans, pharmacists and PBMs.

“Right now, PBMs and that rebate process are the only existing check on the ability of Big Pharma to unilaterally set prices,” CSRxP spokesman Jon Conradi said. “Essentially the rule is banking on Big Pharma, which has a demonstrated track record of engaging in anti-competitive tactics and price-gouging, to lower prices by the full amount of the rebates when there’s nothing in the rule that compels them to do that.”

Overall, Conradi says there is some positive bipartisan action on drug prices starting to take shape in Washington, but the Trump administration backing of the PBM rule would be a setback.

“There has been such a political sea change on the issue of prescription drug prices, and it’s become such a priority for the American people that it’s one of the rare areas and may be the most likely area where there is going to be bipartisan agreement and even legislation that passes into law,” Conradi said.

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David O. Williams

Managing Editor at RealVail
David O. Williams is an award-winning freelance reporter based in the Vail Valley of Colorado, writing on health care, immigration, politics, the environment, energy, public lands, outdoor recreation and sports. His work has appeared in 5280 Magazine, American Way Magazine (American Airlines), the Anchorage Daily News (Alaska), Aspen Daily News, the Aspen Times, Beaver Creek Magazine, the Chicago Tribune, the Colorado Independent, Colorado Politics (formerly the Colorado Statesman), Colorado Public News, the Colorado Springs Gazette, the Colorado Independent (formerly Colorado Confidential), the Colorado Springs Independent, the Colorado Statesman (now Colorado Politics), the Daily Trail (Vail), the Denver Daily News, the Denver Post, the Durango Herald, the Eagle Valley Enterprise, the Eastside Journal (Bellevue, Washington), ESPN.com, the Glenwood Springs Post-Independent, the Greeley Tribune, the Huffington Post, the King County Journal (Seattle, Washington), KUNC.org (northern Colorado), LA Weekly, the London Daily Mirror, the Montgomery Journal (Maryland), The New York Times, the Parent’s Handbook, Peaks Magazine (now Epic Life), People Magazine, Powder Magazine, the Pueblo Chieftain, PT Magazine, Rocky Mountain Golf Magazine, the Rocky Mountain News, Atlantic Media's RouteFifty.com (formerly Government Executive State and Local), SKI Magazine, Ski Area Management, SKIING Magazine, the Summit Daily News, United Hemispheres (United Airlines), Vail/Beaver Creek Magazine, Vail en Español, Vail Valley Magazine, the Vail Daily, the Vail Trail and Westword (Denver). Williams is also the founder, publisher and editor of RealVail.com and RockyMountainPost.com.

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