Committee begins public hearings on prescription drug reform package

AUGUSTA—On Tuesday, the Legislature’s Committee on Health Coverage, Insurance and Financial Services held the first day of public hearings on the Senate Democrats prescription drug reform package. The Committee heard testimony on Legislation from Sen. Heather Sanborn, D-Portland, to regulate pharmacy benefit managers and from Senate Majority Leader Eloise Vitelli, D-Arrowsic to increase drug price transparency.

“Pharmacy Benefit Managers (or PBMs) are the middlemen in the prescription drug payment process. Their role is supposed to be about working on behalf of patients to drive down the cost of prescription drugs and serve as a check against the power of pharmaceutical companies,” said Sen. Sanborn. “However, more and more evidence has emerged that PBM companies have taken advantage of their secrecy and used their position to pad their own investors’ pockets rather than drive down costs for consumers. This bill is about making PBMs more transparent and to ensure they work for consumers, not their own interests.”

Sen. Sanborn’s bill – LD 1504, “An Act To Protect Consumers from Unfair Practices Related to Pharmacy Benefits Management” – comes as a recommendation from the Legislature’s bipartisan Health Care Task Force and is based on legislation that passed in Montana. It would require PBMs to operate in the best interest of providers and pass on all manufacturer rebates to reduce the cost of drugs. It also would prohibit the practice of so-called “spread-pricing,” in which PBMs pay pharmacies less for a drug than the cost they charge insurance companies.

“One of the challenges is that the prescription drug market does not function like other markets. It is shrouded in secrecy, and it’s one of the few industries where added competition does not drive down the cost,” said Sen. Vitelli. “To lower the cost of prescription drugs for Maine families, we need information on how these companies set prices  – we need drug price transparency.”

LD 1162, “An Act To Further Expand Drug Price Transparency” from Sen. Vitelli would require pharmaceutical companies to share information on costs related to drug production, marketing, advertising and consumer price. This bill builds upon previous legislation introduced by Sen. Vitell, which became law last year.

“Prescription drug prices are out of control in this state and in this country. The situation is pretty grim, and the consequences are people’s lives,” said President Jackson. “Mainers deserve better. With our prescription drug reform proposal, we are committed to making prescription drugs more affordable and more accessible, while holding ‘Big Pharma’ accountable.”

The remaining prescription drug bills will receive a public hearings tomorrow, April 17 at 1 p.m. in the Legislature’s Committee on Health Coverage, Insurance and Financial Services.

Two bills from President Jackson propose importing safe and affordable prescription drugs from Canada, which are often 30 percent cheaper than the same drug in the U.S. LD 1272, “An Act To Increase Access to Low-cost Prescription Drugs” would set up a wholesale state importation program, similar to legislation that passed in Vermont last year. LD 1387, “An Act To Increase Access to Safe and Affordable Prescription Drugs” would create an individual importation program.

President Jackson also has a bill to create a Prescription Drug Affordability Board modeled after legislation that passed through the State Legislature in Maryland earlier this month.

In the U.S., one in four Americans struggles to pay for their prescription medication while one in ten Americans does not take their medicine as prescribed to stay afloat. According to the National Academy for State Health Policy, about 200 bills have been filed in 42 state legislatures to address the cost of prescription drugs. Eighty-eight bills have to do with pharmacy benefit managers, 25 are related to wholesale importation and 13 are related to drug affordability review or rate setting.

Members of the public are encouraged to attend the public hearings and submit testimony. Anyone unable to attend can submit written testimony to the committee via email at HCIFS@legislature.maine.gov.

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