A special sub-committee was appointed Monday to look at legislation that would increase transparency on prescription drug costs and give the state Department of Insurance more regulatory control over pharmacy benefits managers.
Senate Bill 313, sponsored by Sen. Dean Burke (R-Bainbridge), was discussed Monday by the full Senate Insurance and Labor Committee before being sent to the sub-committee to be vetted. Sen. Larry Walker III (R-Perry) will chair the sub-committee, which will meet Wednesday at 1 p.m. Senators P.K. Martin (R-Lawrenceville) and Freddie Powell Sims (D-Dawson) will also serve on the sub-committee.
Burke gave an overview of the bill but said he had asked many who wanted to speak on the technical details of the bill to wait to testify in front of the sub-committee.
“There has been a national concern that pharmaceutical costs have been rising higher many times over the baseline inflation rate,” said Burke. “There have been many attempts over the last 10 years to get at the issue. There has even been some legislation in Congress that has been moving forward at a slow pace. I do feel like it’s part of the state’s responsibility because of the large cost to our state both in Medicaid and the State Health Benefit plan, as well as the 10 million-plus members of the public in our state that are fighting these issues.”
Burke went on to say that the main purpose of his bill is to increase transparency on pharmaceutical pricing. “Right now there are a lot of mechanisms that happen behind closed doors that make it very difficult for policy makers, like members of this committee, to make good decisions on what is the right thing for the state of Georgia.”
Burke said that as a rural provider he understands the importance the role the local pharmacy and local pharmacists play in the healthcare delivery system in rural Georgia. “I think some of the business practices that have been occurring over the last 10 years have made it very difficult for those folks to make a living in their community. I think from a policy perspective, making sure we have at least a level playing field is a meaningful policy.”
According to Burke, the bill would increase the ability of the State Insurance Commissioner to regulate the industry. He said the Insurance Commissioner and his staff have agreed to work with the committee to ensure the new code will be similar to codes they follow to regulate other aspects of the health insurers.”
SB 313 also addresses the transparency of how actual costs of prescription drugs are determined, the prior authorization processes, and “steering” – a practice Burke says PBMs (Pharmacy
Benefits Managers) use to “steer patients to every mechanism under their financial control.” Burke said the bill also addresses the Department of Insurance’s ability to deal with the steering process through a surcharge.
Burke concluded his presentation by saying he felt the state of Georgia and its citizens “deserve a little more sunshine on how pharmaceutical prices are reached.”
Representatives from several groups spoke out on the bill– both in favor of the bill and against it.
“We strongly support this bill, and we believe you are doing good work and getting to the root of the problem,” said Greg Reybold, Vice President of Public Policy and Association Counsel of the Georgia Pharmacy Association.
Among those objecting to the legislation was Scott Woods, with Pharmaceutical Care Management Association- the national trade association for PBMs.
Woods said “every day PBMs are negotiating with drug companies to lower out of control prescription drug costs — fighting to lower the costs patients pay for the medicines they need.” Woods went on to state that this bill places 21 unique mandates on PBMs and says as a result it will be much harder for small companies to purchase insurance for their employees.
