Senate Co-Sponsorship Memoranda

I am introducing legislation that could result in an immediate reduction of out-of-pocket costs paid by patients for prescription drugs and create transparency in actual health care spending by payors.

Our efforts to reduce the cost of health care should focus first and foremost on reducing actual costs to patients, including what they have to spend on prescription drugs. I have heard from more and more constituents who despite having prescription benefit plans, are struggling to pay for drugs that are either not covered at all under the plan’s formulary or are out-of-pocket expenses until they meet the plan’s high deductible.

My legislation aims to help people save money on prescription drugs by doing the following:

1. Require health insurers to pass along to patients an average majority of all rebates and discounts that have been negotiated between themselves and drug manufacturers.

Increasingly, people have been forced to choose health insurance plans with high deductibles and high coinsurance. Over the past 10 years, the percent of workers with employer-sponsored health plans enrolled in high deductible plans has increased from 4 percent to 29 percent - more than a 700 percent increase. As a result of these high deductibles, patients are paying much more out-of-pocket for health care, including prescriptions. Yet while the insurance companies negotiate discounts for the medicines they cover once a deductible is met, those discounts are not offered to the patient when paying for those same medicines out-of-pocket while meeting deductibles. Patients are paying NEARLY 100 percent of the list price for the same drug for which their insurance company will ultimately only pay 50-70 percent of the list price. My bill will ensure that if an insurer can pay for a particular medicine at a discount or rebate, so will the insured.

Many PBM contracts with pharmacies contain a “gag order,” which prohibit pharmacists from disclosing information to a customer that would reduce their out-of-pocket costs for medicines. For instance, for many less expensive, generic medicines, co-pays can often be more expensive than if the patient simply pays out-of-pocket and bypass insurance. The extra money - called a “clawback” - ends up with the PBMs. Patients should not only be allowed to receive information that will save them money on prescription drugs, but PBMs should not be making money off of what is really an overcharge to the patient.

The Legislative Budget and Finance Committee (LBFC) and the Pennsylvania Health Care Cost Containment Council have recommended that Pennsylvania participate in a multi-state effort, called the “All Payers Claim Database,” which collects data on all actual claims paid by health care payers, primarily health insurers. According to the LBFC, the creation of such a data base would allow policy makers and patients to document health care spending patterns and reveal diseases and medical treatment that “drive” health care costs in Pennsylvania. It would also go far in creating transparency for policyholders and help all healthcare consumers compare healthcare costs.

If you have any questions on this legislation, please feel free to contact me or my legislative director, Geri Sarfert, at (717) 787-6063.