Price transparency legislation would reveal pharmaceutical cost drivers and lower the cost of health insurance
DENVER, CO– Today, General Assembly Democrats unveiled the Colorado Prescription Drug Transparency Act of 2020. The bill, sponsored by Representatives Dominique Jackson and Dylan Roberts, and Senators Joann Ginal and Kerry Donovan, would mark a major step forward in uncovering the factors that are driving up pharmaceutical prices, and it would deliver relief to consumers through reduced insurance premiums.
“This important legislation will finally bring to light the murky dealings and obscured relationships that drive up the cost of prescription drugs and health insurance, leading to record profits for billion-dollar, global pharmaceutical corporations,” said Rep. Jackson (D-Aurora). “This is an issue that affects Coloradans across the state, at every stage of life, and it’s time we move the ball forward to bring down the cost of prescription drugs.”
“For too long, drug companies have been price gouging older adults and hardworking Americans without consequence. Prioritizing profit over people and forcing patients to go without lifesaving medication,” said Sen Ginal (D-Fort Collins). “With new transparency laws, our state will force Big Pharma to shine a light on what drives up the cost of medication, so we can ensure accountability for our communities.”
“Last session we capped the cost of insulin, saving Coloradans living with diabetes thousands of dollars per year, and that was just the first step. Today we’re building on the progress we’ve made with robust transparency measures,” said Rep. Roberts (D-Avon). “This bill will bring relief to consumers by lowering insurance premiums and by holding drug manufacturing, drug middlemen and insurance companies accountable.”
“This is bill is a part of a comprehensive approach to improve healthcare by defending our friends and neighbors from the excess corporate profit that forces them to jeopardize their health,” said Sen. Donovan (D-Aspen). “We are committed to joining together to fight for all Coloradans so that they can get the care they need.”
The Colorado Prescription Drug Transparency Act of 2020 would address two primary concerns. First, it would provide the state and policymakers with critical data needed to understand and address the factors that are driving up the cost of prescription drugs. Second, it would provide immediate relief to consumers by ensuring that the rebates insurance companies receive from drug manufacturers are passed along directly to reduce premiums across the board.
The bill would help policymakers understand the financial relationships between drug manufacturers, pharmacy benefit managers (PBMs), insurance companies and consumers. By revealing how the currently hidden pharmaceutical supply chain operates, policymakers can better determine and address the key factors that are driving up the costs of prescription drugs.
Under the bill, health insurers will have to submit detailed information to the commissioner of insurance starting in 2021 about the top 50 most costly and most used prescription drugs covered under their plans, any rebates they receive from drug manufacturers and how drug costs and rebates are accounted for in insurance premiums.
Drug manufacturers will have to notify the commissioner when they increase the price of certain drugs, the specific reasons for the price change and if the price change was necessitated by a change or improvement to the drug. The drugs that would fall under this category are drugs with a price of more than $50 per course of therapy and for which the price has increased by 10 percent or more over the prior year.