AUGUSTA – A bill from Senate President Troy Jackson, D-Allagash, to lower the cost consumers pay for prescription drugs, received a public hearing before the Legislature’s Health Coverage, Insurance and Financial Services Committee on Tuesday. LD 2095, “An Act To Require Appropriate Coverage of and Cost-sharing for Generic Drugs and Biosimilars” would prevent drug manufacturers and corporate middlemen from tricking consumers into purchasing the most expensive drugs on the markets when cheaper, effective alternatives buy are available.
“The high cost of health care from outrageous premiums to surprise billing and out-of-control prescription drug price hikes have driven Mainers to make most of their health care decisions on cost – they can’t afford not to. Unfortunately, insurance companies, drug manufacturers and corporate middlemen are all taking advantage of the situation to grow their own bottom line when deciding which medications and brands your health plan will cover,” said President Jackson. “LD 2025 bill aligns incentives so drugs that cost less to manufacture are also the ones consumers buy more often. It will keep hard-earned money in Mainers’ pockets, instead of helping corporations grow their profit under the guise of lowering costs.”
LD 2025 requires health insurance plans to offer at least one generic form of any branded drug in a formulary and offer that generic form on a lower cost-sharing tier than the branded equivalent. The generics must be offered for a “meaningfully lower” amount, which will encourage patients to use those drugs instead of being steered toward their branded counterparts that provide the same treatment at a much higher cost.
Health insurance companies list out the medications covered under a certain plan in what is known as a drug formulary. Medications are sorted into different tiers based on the cost of the drug and cost to the consumer. Typically, medications with the lowest cost or copay assigned by the insurance company fall under the first tier, which means these are the medications most often purchased by consumers.
The system was designed to save consumers money and drive them to purchase the lowest cost drug. However, drug manufacturers, pharmacy benefit managers and insurance companies have rigged the system to maximize profits. For example, instead of placing cheaper generic medication, which the Federal Drug Administration certifies as equally effective as brand-named medication, on the lowest tier, those medications end up on higher tiers. The pricing and rebate games that lead to this result also allow brand-name drugs to maintain control of the market and prevent the introduction of cheaper alternatives in the first place.
As written, this legislation will not interfere with patent protections and will continue to incentivize advancements in pharmaceuticals for the benefit of patients.
One in four Americans still struggles to afford their prescription drugs. In Maine, consumers spend more than the national average on health care. Of the approximately $9,500 Maine people spend on health care annually, more than $1,600 of that is spent on prescription drugs alone.
LD 2095 will undergo additional work sessions in committee.