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Here’s how Utah legislators seek to lower prescription drug prices this session

Bills would help families paying astronomical fees for prescriptions

Penny Hepworth, 6, who was born with cystic fibrosis, uses a nebulizer and an airway clearance vest at her home in Layton on Friday, Feb. 7, 2020. Rep. Ray Ward, R-Bountiful, is proposing a bill, HB214, that would prohibit insurers, particularly state-run Medicaid and the Public Employees Health Plan, from rejecting payments for patients with certain debilitating and lifelong genetic conditions.
Penny Hepworth, 6, who was born with cystic fibrosis, uses a nebulizer and an airway clearance vest at her home in Layton on Friday, Feb. 7, 2020. As legislators say drug costs are among the biggest complaints they hear from constituents, proposed bills this session will seek to require insurers and pharmacy benefit managers keep costs down for patients. 
Laura Seitz, Deseret News

SALT LAKE CITY — When Penny Hepworth was born, doctors gave her a life expectancy of about 38 years.

“That is not OK,” said her mother, Jen Hepworth, who works very hard to give Penny, 6, who was born with cystic fibrosis, a good life. She was elated when a medication became available that would allow Penny to live longer and be healthier.

But that miracle drug comes with a high price tag.

It costs about $25,000 a month for that one medication and Penny requires others, as well as a costly high-caloric but nutritious diet and medical supplies to stave off the complications of cystic fibrosis.

Drug manufacturers help cover the cost of the unique drug through rebates or copay assistance cards, but insurance companies have started to say that they won’t accept those payments toward a patient’s annual deductible, which means the insurer is essentially getting paid twice, Hepworth said.

“I was told ‘it’s not ethical, but it’s legal,’” she said.

But it is devastating to the family’s finances.

As legislators say drug costs are among the biggest complaints they hear from constituents — especially among those with special conditions requiring astronomically expensive medications — proposed bills this session will seek to require insurers and pharmacy benefit managers keep costs down for patients.

Pharmacy benefit managers negotiate with drug manufacturers on behalf of insurers. Rep. Paul Ray, R-Clearfield, says pharmacy benefit managers are behind the increasingly high drug prices.

Jen Hepworth laughs with her daughter, Penny, 6, who was born with cystic fibrosis, at their home in Layton on Friday, Feb. 7, 2020. Rep. Ray Ward, R-Bountiful, is proposing a bill, HB214, that would prohibit insurers, particularly state-run Medicaid and the Public Employees Health Plan, from rejecting payments for patients with certain debilitating and lifelong genetic conditions.
Jen Hepworth laughs with her daughter, Penny, 6, who was born with cystic fibrosis, at their home in Layton on Friday, Feb. 7, 2020. As legislators say drug costs are among the biggest complaints they hear from constituents, proposed bills this session will seek to require insurers and pharmacy benefit managers keep costs down for patients.
Laura Seitz, Deseret News

For example, of a $400 insulin prescription, the manufacturer ends up with just $88, and the pharmacy benefit manager requires the manufacturer to give it a 65% rebate price. Instead of allowing the patient to benefit from that rebate, the insurance benefit manager splits that money with the insurance company and “keeps the rest,” according to Ray.

“The consumer pays the full price, plus a few extra wholesale fees and transfer fees, so the consumer ends up paying $408 for a prescription that the manufacturer’s only making $88 on but the (pharmacy benefit manager) is keeping the majority of the money,” Ray said Monday during a news conference announcing SB272.

“What you really have is a medicine mafia by the (pharmacy benefit managers),” Ray said.

SB272 would require pharmacy benefit managers to pass the rebates to consumers at the point of sale, with insurers still receiving agreed upon sums. The requirement, according to Ray, will significantly reduce drug prices.

“If the (pharmacy benefit managers) are no longer having any benefit from leveraging those rebates, you’re going to see the prices go down,” Ray said.

He became informed through two years of visiting pharmacies in an effort to investigate the cause of rising drug costs. Pharmacies fear retaliation from pharmacy benefit managers, which try to purchase smaller pharmacies, put them out of business or force them to sell in order to control the market, Ray said.

“Rising costs on prescription drugs are a matter of pressing importance for Utah patients and families. As health care gridlock continues at the federal level, this makes the issue of pricing transparency an important conversation and a critical priority at a state level,” said Rick Larsen, president of the Sutherland Institute.

Rep. Paul Ray, R-Clearfield, speaks with Rep. Melissa Garff Ballard, R-North Salt Lake, after announcing legislation to lower prescription drug prices at the state Capitol in Salt Lake City on Monday, Feb. 10, 2020.
Rep. Paul Ray, R-Clearfield, speaks with Rep. Melissa Garff Ballard, R-North Salt Lake, after announcing legislation to lower prescription drug prices at the state Capitol in Salt Lake City on Monday, Feb. 10, 2020.
Ivy Ceballo, Deseret News

The institute supports the bill and “anything that promises to increase transparency and eliminate anti-competitive practices,” he said.

Last year, Ray sponsored a bill that requires more transparency for pharmacy benefit managers, which became law. After speaking out on the issue, he said, a pharmacy benefit manager canceled the life-saving medication he needs. Ray said he expects that to happen again, but he feels it’s worth it.

Other bills introduced this session that would also address drug costs — including the cost of insulin or other specific procedures — are not competing, according to Ray, but would complement each other.

Among them, Rep. Norm Thurston, R-Provo, is sponsoring HB207, which addresses insulin affordability. It would give Utah pharmacists the authority to refill an an existing, 30-day insulin prescription up to 90 days, and switch patients to a similar product depending on their plan’s coverage. It would also incentivize health benefit plans to reduce the required copayments for insulin.

Rep. Ray Ward, R-Bountiful, is proposing HB214, which would require the Public Employees Health Plan to provide coverage for in-vitro fertilization to couples who carry certain genetic mutations so they can have children who do not. It would also require state-run Medicaid to seek a waiver from the federal government to allow it to cover in-vitro fertilization.

“These conditions can cost $300,000 a year to treat, every year ‘til forever,” Ward said. “This would be a $16,000 one-time cost in pregnancy.”

The hope is that it would eliminate the chance of having a child with the same disease that is expensive to treat.

Ward’s bill as originally written would have also required an insurer to include any amount paid by or on behalf of a patient for a prescription drug toward the patient’s copayment. But that portion of the bill carried a $1 million fiscal note to the state and was removed in a substitution bill, Ward said.

Ray’s bill addresses a different issue of “transparency between insurance companies and (pharmacy benefit managers) and pharmacies,” according to Ward.

During a debate Monday on the bill in a House Business and Labor Committee meeting, lawmakers wondered about how many rounds of in-vitro fertilization the state-run programs would need to pay for, and what would happen if the federal government denied the waiver request.

Under the bill, the insurers would be able to decide for themselves how many in-vitro fertilization procedures to cover, Ward said. If the federal government denies the Medicaid waiver, the program would not be required to cover it.

Hepworth, who commented during the meeting, said though Penny is doing well with the help of the medication, other families struggling with the same illness aren’t faring as well.

Some couples she knows in the cystic fibrosis community have traveled a to Prague in the Czech Republic to get in-vitro fertilization because it’s less expensive there, according to Hepworth.

The substitution bill was given a favorable recommendation in committee and will move to the House floor.

“It’s a new topic, and so it’s a little tricky just to walk into a committee room where they haven’t really ever thought about that before and to ask them to make a decision. But to me, the more people think about it as it comes into focus a little better, hopefully people will realize how hard this is on families and how much we really ought to be trying to prevent these terrible illnesses if we can,” Ward said after the meeting.

The Hepworths work hard. They have a good job and good insurance, but still have to pay $6,000 to meet their deductible every year, and with an expensive medication, that comes due pretty quickly.

“We’ve been forgoing other things to keep her healthy,” Hepworth said, adding that a portion of their income already goes to care for her two stepsons, as well as to pay off student loans and existing medical debt.

The drug Penny takes has eliminated her need for pancreatic enzymes, a first since her birth. And it allows her to live a more normal life — going to church and school and other activities without the fear of getting sick all the time. While some of her friends with cystic fibrosis are in and out of the hospital for weeks at a time, Penny has only been hospitalized once.

“If we couldn’t get this medication, I don’t know what we would do,” Hepworth told the Deseret News. “It has made it so she can have a life that is not just staying alive, but allows her to be a 6-year-old kid.”