AUGUSTA – Members of the Legislature’s Health and Human Services Committee heard testimony Monday on 10 bills aimed at providing consumers access to information generally regarded as either proprietary or irrelevant.
All 10 proposals targeted the high cost of prescription drugs, and most focused on shining light into what Rep. Richard Woodbury, an independent from Yarmouth, called “the enormous black box of health care expenses.”
Woodbury is the sponsor of a bill to require all health care providers to post a “menu” of their services, including the charge for those services, in a prominent location. Identified services include the provision of prescription drugs as well as other medical procedures. Providers who don’t comply would be prohibited from billing for the services.
Like most legislators who addressed the committee in the daylong public hearing at the Augusta Civic Center, Woodbury argued that informed consumers will think twice before asking for expensive medications or inessential procedures, even if they have insurance that covers the services. More cost-effective consumer decision-making, he said, is key to driving down expenses.
Woodbury’s consumer-oriented sentiments were echoed throughout the day as legislators introduced their bills. Some of the proposals included:
. Requiring drug manufacturers to include the “usual and customary” retail price of a medication on the label or the sales receipt;
. Mandated reporting by drug companies of how much money they spend promoting their products in Maine;
. Requiring companies that manage prescription benefits in Maine to disclose their financial dealings with drug manufacturers, including any potential conflicts of interest.
Senate Majority Leader Sharon Treat, D-Gardiner, sponsor of one of two bills dealing with pharmacy benefits managers, or PBMs, said the state stands to save significant amounts of money through creating “ethical guidelines” for companies that negotiate drug prices for large employers, unions and commercial insurance companies.
PBMs, she said, originally worked well but have now become “part of the problem” because of the lack of openness in their contracts. Only recently has the role of PBMs begun to be identified, she said, and the industry is under scrutiny in many states.
There are just four major for-profit PBMs nationally and a handful of programs that are subsidiaries of insurance companies. In Maine, for example, Anthem Blue Cross and Blue Shield’s subsidiary negotiates drug purchases for the state employees union.
One solution, Treat said, is to encourage competition from nonprofit PBMs. A nonprofit program would operate on a lower administrative budget and be fully accountable because of its tax status.
Treat is one of several Maine legislators who belong to the bipartisan National Association on Prescription Drug Prices, which is helping lawmakers from many states explore the possibility of starting a public, nonprofit PBM.
Cheryl River, executive director of the NAPDP, said for-profit pharmacy benefit managers won’t comply with ethical standards unless they are required by law to do so.
Support for the bills was given by representatives of the American Association for Retired Persons, the Maine Citizen Leadership Fund, The Maine Council of Senior Citizens and the state attorney general’s office.
Opposition came from several fronts, including representatives from the pharmaceuticals industry, the insurance industry and some individuals.
Representing the Pharmaceutical Researchers and Manufacturers of America, Ann Robinson said it’s ironic that instead of empowering consumers with information, the bills will have an adverse effect on health care costs. She said separating the costs of advertising and marketing in Maine from companies’ overall marketing budgets would be difficult and private companies had no obligation to disclose their business dealings at the risk of revealing proprietary information.
“Regulation for the sake of regulation” will stifle competition and drive prices up, she said.
Jason Twombley, a spokesman for Anthem, said efforts to regulate PBMs would “cut and handcuff our abilities to hold costs down.”
A pharmaceuticals representative for Glaxo Smith Kline, Steve Kolenda of Monmouth said during a break that he personally opposed efforts to impose further regulation. Industry guidelines already have eliminated the widely reported excesses of a few years ago, he said, when “detailers” like him could offer extravagant incentives to physicians who used their companies’ products.
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