.Public Health Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-445

Title:

AN ACT CONCERNING FAIRNESS IN PHARMACY BENEFIT MANAGER CONTRACTS.

Vote Date:

3/27/2017

Vote Action:

Joint Favorable Substitute

PH Date:

3/7/2017

File No.:

SPONSORS OF BILL:

Public Health Committee

REASONS FOR BILL:

Starting January 1, 2018, this bill prohibits a contract entered into between a pharmacist and a health carrier, pharmacy benefits manager or any other entity from containing a provision prohibiting the pharmacist from disclosing any relevant information to an individual purchasing prescription medication. Such information includes the cost of the prescription, actual reimbursement to the pharmacist for the prescription sale, the prescription's efficacy, and any alternative medications that are less expensive than the prescription.

Starting on the same date, the bill also prohibits requiring a person in Connecticut to pay for the services of a pharmacist or pharmacy in an amount greater than what they receive for the services from all payment sources (e.g., public and private insurers). A violation of these provisions is considered an unfair trade practice.

Additionally, the bill requires a pharmacy benefits manager to (1) owe a fiduciary duty to a health carrier or other health benefit plan sponsor (e.g., employer or third-party administrator); (2) perform its duties with care, skill, and standards of conduct applicable to a fiduciary; and (3) notify the health carrier or health benefit plan sponsor in writing of any policy, activity or practice that presents a conflict of interest with these duties.

RESPONSE FROM ADMINISTRATION/AGENCY:

Senator Martin M. Looney:

Senator Looney supported the bill, saying that it will increase transparency in drug pricing and help protect patients with prescription drug coverage. It will be especially helpful for specialty drugs and drugs that see a sudden increase in price. He commented that he has worked on this bill in a bipartisan effort with Senator Fasano.

Senator Len Fasano:

Senator Fasano testified in support of the bill, saying that addressing prescription drug pricing transparency is essential. Senator Fasano noted that pharmaceutical costs account for 10% of all healthcare spending and that prescription drug prices have increased by 20% between 2013 and 2015. Without accurate pricing information, markets cannot operate and consumers cannot make informed decisions.

Kevin Lembo, State Comptroller:

Comptroller Lembo testified in support of the bill, saying that greater transparency in prescription drug costs will help us tackle the unsustainable rising costs that have affected every business and every family. He added that a data-driven approach will allow lawmakers to make informed policy decisions.

NATURE AND SOURCES OF SUPPORT:

AARP Connecticut:

AARP Connecticut testified in support of the bill, saying that passing legislation that sheds light on prescription drug pricing is necessary to help combat rising costs. The costs for prescription drugs are not sustainable for seniors and taxpayers, and the legislature should make it their goal to ensure that these people are not overcharged.

Ellen Andrews, PhD, Executive Director, Connecticut Health Policy Project:

Dr. Andrews testified in support of the bill, saying that it is important to bring accountability to the pharmaceutical industry and control health costs for Connecticut consumers. She stated that prescription drug spending grew faster than any other sector for the second straight year and that the US spent $858 per capita on drugs compared to $400 average for 19 other industrialized nations.

Aaron Berman, Student Fellow, Yale Global Health Justice Partnership Practicum:

Mr. Berman testified in support of the bill, stating that transparency legislation can encourage companies to price drugs more reasonably, provides information to prevent predatory pricing practices, and provides consumers, insurers and providers the information necessary to make informed decisions. Mr. Berman described similar transparency bills that have been passed in other states and testified that they have thus far been effective. He advised the committee that the bill needs to be specific enough to help lower drug prices over time.

Connecticut State Medical Society:

The Connecticut State Medical Society (CSMS) testified in support of the bill, saying that while efforts to address the issue of rising drug costs need to be made at the Federal level as well, this bill provides an opportunity for Connecticut to enact legislation that brings transparency to drug pricing.

Michele Dickson, Senior Director of Advocacy for the Northeast, National Multiple Sclerosis Society:

Ms. Dickson testified in support of the bill, saying that people with Multiple Sclerosis (MS) need more information concerning prescription drug prices to make an informed choice. With respect to manufacturers, the National MS Society supports requiring transparency related to how prices are set, how price increases are determined, and how prices and increases support research and development, advertising, and the amount of money spent on patient assistance programs. With regards to insurers and pharmacy benefit managers, the National MS Society supports requiring transparency in related formulary coverage and the factors used in designing a plan's formulary.

Kasia J. Lipska, Assistant Professor of Medicine, Yale School of Medicine:

Dr. Lipska, who specializes in endocrinology, testified in support of the bill, telling the story of three of her diabetes patients who all have struggled with the rising prescription drug prices in Connecticut. She argued that greater transparency and disclosure of drug prices is the first step in getting drug costs under control.

The following individuals provided testimony in support of the bill:

● Dr. Mary Jane Williams, Connecticut Nurses Association

● Dr. Lynn Rapsilber, Connecticut Coalition of Advanced Practice Nurses

● Jing Luo, MD, Instructor of Medicine, Harvard Medical School, Division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women's Hospital

● Tom Swan, Executive Director, Connecticut Citizen Action Group

NATURE AND SOURCES OF OPPOSITION:

None

Reported by: Geoff Simpson, Assistant Clerk

Date: 4/6/17