Hatfield attempts to lower prescription drug prices for Hoosiers
INDIANAPOLIS — State Rep. Ryan Hatfield (D-Evansville) offered two amendments this week to Senate Bill 325. The first would have banned the practice of spread pricing by Pharmacy Benefit Managers (PBMs) and the second would have returned rebate savings of certain prescription drugs and lower their costs at the pharmacy.
Hatfield's first amendment would have eliminated the ability for PBMs to implement spread pricing techniques. Spread pricing occurs when health plans contract with PBMs to manage their prescription drug benefits and PBMs keep a portion of the amount paid to them, driving up pharmaceutical costs for Hoosiers purchasing necessary prescription drugs and increasing Medicaid costs for taxpayers.
“Every time I offer this, we hear the same excuse: not now, now is not the time, we'll address this later,” Hatfield said. “Well, later is not good enough for the constituents we serve. Hoosiers are struggling to pay for their medicine today. Small pharmacies are closing today. Families are being forced to choose between healthcare and groceries today.
“Consider where this money is going – who is getting paid. It's going to vertically integrated organizations that own every part of the process except the drug manufacturing – these groups own the PBM groups AND the pharmacies – taking almost 25% of the final cost to Hoosiers. These organizations are able to reap billion-dollar profits off the backs of sick Hoosiers. This is a ban on that practice by cutting out the greedy middle-man and lowering prescription costs for sick people.”
This model encourages PBMs to purchase more expensive prescription drugs, but offer the drugs to pharmacists at a lower reimbursement rate. As a result, PBMs make more money off of these more expensive drugs even though a cheaper alternative is just as effective.
“It isn't just that prices are too high overall,” Hatfield continued. “Prices are too high in Indiana specifically. Our neighbors like Ohio have passed similar legislation, and just across state lines you can buy the same drugs for less.”
Hatfield's second amendment would have lowered prescription drug costs for certain consumers. It would have provided that the defined cost sharing for a prescription drug under a health maintenance organization (HMO) contract must be calculated at the point of sale and based on a price that is reduced by an amount equal to at least 85% of all rebates received by the insurer or HMO in connection with the dispensing or administration of the prescription drug.
“West Virginia is already doing this, except they're asking for 100% of rebates,” Hatfield continued. “I'm only asking for us to try something – anything to help our constituents. This should be about them. Let’s give 85% of the rebates on prescription drugs back to Hoosiers.
“They are going to the pharmacy every day and overspending; my constituents can't afford it anymore. We've asked them to wait for too long. The time to act is now, and I will continue to bring solutions to the table because every new delay is putting Hoosier lives at risk.”
Both amendments were voted down by House Republicans.