Democrats’ bill would reveal the financial relationships that drive up the cost of drugs and ensure rebates lower premiums for consumers
DENVER, CO– The House Committee on Health and Insurance today passed Representatives Dominique Jackson and Dylan Roberts’ landmark legislation to increase transparency in prescription drug pricing. The bill would also ensure that manufacturer rebates are passed along to consumers in the form of lower insurance premiums. The vote was 7-3, with House GOP members standing with billion-dollar pharmaceutical corporations instead of Colorado consumers.
“With multi-billion dollar pharmaceutical corporations making record profits, it’s time to finally hold these companies accountable for all the factors that are making prescription drugs unaffordable for far too many Coloradans,” said Rep. Jackson (D-Aurora). “Access to life-saving medication is a right. This bill will bring badly needed transparency to the complex and secretive deals between drug manufacturers, insurance companies and pharmacy benefit managers that are driving up the cost of drugs.”
“It’s clear that pharmaceutical corporations and drug middlemen are using rebates to get their drugs to market and to drive consumers to high-cost drugs, but these rebates aren’t being passed along to save people money,” said Rep. Roberts (D-Avon). “Rebates are being traded back and forth between manufacturers, drug middlemen and insurance companies behind closed doors with no public accountability. This bill will give us the data we need to make sure that rebates actually do what they are intended to do; save Coloradans money on their prescription drugs.”
Colorado’s Medicaid program has seen its expenditures on prescription drugs increase 73 percent in the last five years. Nearly 11 percent of Coloradans did not fill a prescription last year because of cost concerns. The Centers for Medicare and Medicaid Services estimates that total US spending on prescription drugs will grow 60 percent from 2019-2027 to $576.7 billion. These increases are forcing Coloradans to pay more for both prescription drugs and health insurance. The ten largest American pharmaceutical corporations made nearly $69 billion in profits in 2018–some of the largest profit margins in corporate America.
The Colorado Prescription Drug Price Transparency Act of 2020, HB20-1160, 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 by shining a light on the the financial relationships between drug manufacturers, pharmacy benefit managers (PBMs), insurance companies and consumers. 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.
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 in Colorado 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.