Melissa Andel on Legislative Efforts, Unmet Needs for State-Level Prescription Drug Pricing Reform

October 22, 2020

Americans not covered by Medicaid should be aware of 2 key factors: the use of copay accumulators in commercial health plans and management of emerging high-cost specialty prescription drugs.

With states maintaining regulatory authority over a majority of health insurance plans, Americans not covered by Medicaid should be aware of 2 key factors: the use of copay accumulators in commercial health plans and management of emerging high-cost specialty prescription drugs, said Melissa Andel, MPP, Principal, CommonHealth Solutions LLC.

Transcript

At this year's AMCP Nexus 2020 virtual meeting, you will speak on the state of prescription drug pricing reform at the state-level. With much attention placed on national reform of sectors within Medicare, what are state-level prescription drug-related issues that Americans should be aware of?

A couple of issues without giving too much away my presentation and is one, the states still maintain regulatory authority over a lot of health insurance plans. So, you have Medicaid, which is one of the primary providers of health insurance and health coverage in the United States, you also have the state employee benefit plans, and then you have all of the health plans, the individual and small group market plans, that are regulated by the states.

So, for all of those folks—I estimate that's about 100 and 20 million people—what happens at the state-level really does impact them. As far as the specific issues for Americans who maybe are not covered by Medicaid, maybe they have commercial plans, and they're wondering why they need to worry about this, one being one of the big issues next session, so in 2021, is the use of copay accumulators in commercial health plans, and whether or not—we already have 4 states that have prohibited their use of moving forward and it will be interesting to see if other states are successful at implementing similar legislation.

I think it is also instructive to look at how Medicaid programs are also handling the introduction of these seriously high costs prescription drugs—the really high cost specialty drugs that are being approved nowadays—because commercial health plans are going to have the same sorts of problems that states are having with their Medicaid and state employee benefit plans. I think that's sort of one of the biggest issues, is trying to figure out how to equitably distribute the costs of those therapies.

Can you speak on the current role that states have on prescription drug reform? And major policies under consideration to address cost?

Again, I think the states are struggling, there's 2 big forces. So, one is the Medicaid benefit, the state employees’ benefits where the state is the actual purchaser of the prescription drugs. So, they're struggling just like every other health plan or any other purchaser or large employer of health care is on how to manage the costs of these therapies. Then as I was saying, they're a little hamstrung because they don't have complete access to some of the utilization management tools that you have on the commercial side to control costs. So, that is one area where states are working.

States are also working, I think they're hearing a lot from consumers and their constituents, there has been sort of a vacuum at the federal-level, as far as dealing with prescription drug pricing to the extent that I think consumers are frustrated. They are, I think, calling their state representatives as well, and putting pressure on the states to take some action where the federal government has been a little bit slow to respond. You've seen that with insulin. The states, there's been, I believe, 10 states that have passed copayment caps for 30-day supply of insulin, and Medicare is just now catching up to that. Starting in 2021, seniors are going to have the option of enrolling in Medicare Part D plan that caps insulin at $35 a month.

So, the states have been a little bit ahead of the game than the federal government through Medicare, when it comes to insulin. So, I think, again, it's the instances where the states have to actually pay for these drugs and figure out how they're going to pay for it, because another difference is they're not like the federal government, they can't just print money, and they have to balance their budgets.

So, it's got to come from somewhere. They have to figure out—they can't kick the can down the road. Then, it's how to satisfy the needs of their constituents that are facing legitimate problems affording their prescription drugs when they go to pharmacies to pick them up.

Do you have any other thoughts on state-level reform of prescription drug costs?

I do think that state reform is something that can get overlooked a little bit with all the attention at the national level, but I do think it's really important for manufacturers, as well as health plans to pay attention, especially with respect to the states that are starting to implement a lot of transparency and reporting requirements. Those can apply to manufacturers, as well as health plans and pharmacy benefit managers.

So, I think it's going to get increasingly complicated and difficult, it's going to be an administrative burden, quite honestly, for these companies to have to keep up with all of the various registration requirements and things that they have to do for the 50 various states. So, I think that this is something that can easily sort of slide by, but it's important and it is going to be something from a manufacturer side, it's going to impact their pricing decisions that they make or existing products, as well as new products, and it's going to impact the way pharmacy benefit managers and health plans can design their benefits to meet the needs of their members.

So, I think it's something, again, that can be sort of easily overlooked, but I think it's really important.