National Conference of State Legislatures (NCSL)
Maryland Delegate Bonnie Cullison (D) and Oklahoma Senator Greg McCortney (R) represent very different districts. Cullison’s borders Washington, D.C., and is densely populated and economically and ethnically diverse. McCortney describes his as “a lot of cows, a lot of hay and a few people.”
One thing their constituents have in common: the need for affordable prescription drugs.
Cullison and McCortney are both working on the issue through NCSL’s bipartisan working group and in their own state legislatures. They joined an NCSL Town Hall to describe the work in their states and to share some of the results the working group released this week, “Prescription Drug Policy: A Bipartisan Remedy.”
Maryland was the first state to form a prescription drug affordability board, in 2019, and Cullison says legislators refined its mission in this session.
For one thing, it needed funding, and while Governor Larry Hogan (R) vetoed a bill to fund it, the Legislature voted to override it. Lawmakers also moved up the deadline from December to October for the affordability board to provide recommendations for particularly problematic prescription drugs.
Cullison says lawmakers took steps to regulate the prices charged by pharmacy benefits managers after a U.S. Supreme Court ruling in December said states have that right. Pharmacy benefits managers, or PBMs, are companies that manage prescription drug benefits for insurers and employers. They play a huge part in the pricing and availability of drugs.
The PBM system is meant to stabilize drug prices, but many states have sought to have a role in managing how PBMs work. According to Colleen Becker, a senior health policy specialist with NCSL, 34% of the 727 bills NCSL is tracking are related to pharmacy benefit managers. Of the 247 introduced bills, 46 passed in 27 states.
McCortney says the Oklahoma Legislature passed three bills related to prescription drugs; streamlining pharmacy audits, closing some loopholes in rules regarding PBMs; and allowing patients to use coupons toward their annual insurance deductibles.
Both lawmakers cite “Prescription Drug Policy: A Bipartisan Remedy” as a valuable resource for legislators and their staffs who are grappling with this complex issue of how to manage and lower prescription drug prices.
The report notes that the supply chain for prescription drugs is complicated and unlike other supply chains. Participants at each step in the chain can increase prices, and much of what they do and why is kept secret. To illustrate the supply chain’s tangles, the work group’s report includes a graphic (see below) showing it awash in intersections and hard to decipher.
Source: Oregon state schematic from Joint Task Force on Fair Pricing of Prescription Drugs report 2018, p.56.
CCO = coordinated care organizations (Medicaid)
PSAO = pharmacy services administrative organizations
Given this complexity, the recommendations focus on increasing transparency around costs and pricing, streamlining procurement processes and encouraging or introducing competition into the process.
The bipartisan panel offers suggestions for each area that had to meet several criteria, including political feasibility, popularity with constituents and ability to reduce overall health care costs, improve patient health and improve the patient and provider experience.
The panel notes the recommendations aren’t one-size-fits-all. Lawmakers will still need to explore the range of legislative solutions that might work for their states, but the recommendations can help target the efforts on areas of the prescription drug issue that need to be addressed.
Cullison says her state is focusing on that transparency issue. She says states need to thoroughly understand the supply chain so they can make effective changes to address soaring costs.
McCortney says Oklahoma has acted to create more competition. It has created a state-run pharmacy benefits manager inside the University of Oklahoma schools of medicine and pharmacy to administer Medicaid prescriptions.
“It saves us a tremendous amount of money by cutting out some of the middle man,” McCortney says.
NCSL Additional Resources