With billions of dollars at stake, a legislative battle in Missouri over payments for prescription drugs kicked off again Wednesday between pharmacies, health care providers and insurance companies.
For those unfamiliar with the conflict, terms like white bagging, brown bagging, 340B and biosimilarity can make the debate impossible to fathom. But each of those phrases, and others equally baffling, play a part in how much patients and insurers pay and whether they can get their prescriptions from their favorite pharmacy.
A bill passed last year attempted to decide one issue in favor of hospitals, not-for-profit clinics and other selected providers by mandating that pharmaceutical manufacturers offer discounted drugs under the 340B program to any pharmacy with a contract to supply the provider’s patients.
That law is being challenged in federal court, but no trial has been held.
Two bills discussed Wednesday by the Senate Families, Seniors and Health Committee would expand on that legislation and take on one of the other major features of prescription sales — pharmacy benefit managers, or PBMs.
State Sen. Travis Fitzwater, a Republican from Holt’s Summit, wants to protect independent pharmacies from practices that favor large chain operations. His bill would require reimbursements to all pharmacies to be the same as reimbursements for pharmacies affiliated with PBMs.
That will help the independent pharmacies stay in business, he said.
“They take care of our communities, they are leaders in our communities, they invest in our communities, and they are going away,” Fitzwater said.
Fitzwater’s bill would also require insurance providers to include amounts paid on behalf of a patient for prescription drugs to be counted against the maximum out-of-pocket costs allowed in a policy. Those payments can include rebates or outlays by a relative, Fitzwater said.
Currently, many plans only recognize payments made by the patient only.
The provisions are especially important when a high-cost specialty drug is involved, he said.
“They’ll say you can only get this drug in an approved pharmacy that will fulfill the requirements we have,” Fitzwater said. “So they will reimburse themselves at a much larger margin than they’ll reimburse the independent pharmacy.”
Supporters of the bill said PBMs get in the consumer choice.
Erica Crane, founder of NextRx Pharmacy in Columbia, said PBMs force people to use large chains and reap the benefits of negotiated discounts.
“PBMs do not lower the cost of medications,” Crane said. “They don’t increase the availability. What they are doing is closing our independent pharmacies.”
Opponents argue that the bill will shift costs and hurt self-insured plans.
Laurel Pickering, president and CEO of the St Louis Area Business Health Coalition, said her organization purchases health care on behalf of 500,000 people, employees and families of employees at Anheuser-Busch, Panera, Boeing and several other large companies.
“The provisions in this bill are being used to capture money from employers and their workers, and they’re going to increase those costs,” Pickering said.
State Sen. Mike Moon, an Ash Grove Republican, pushed back against Pickering’s argument. More choice in the marketplace should mean reduced prices, he said.
“What I’m hearing you say is that you are for centralization of power and concentrating that in just a few hands, as opposed to competition, because you said that allowing choice increases prices, and that’s usually not the way the free market works,” Moon said.
The other legislation considered Wednesday, sponsored by state Sen. Justin Brown of Rolla, would limit how PBMs reimburse pharmacies for physician-administered drugs, as well make them pay the same amounts for biosimilar drugs. PBMs would also be barred from paying a pharmacy less for a drug obtained under the 340B discount program than it pays for the same drug when it is not covered by the manufacturer’s discount.
Karen White, CEO of the not-for-profit Missouri Highlands Health Care, headquartered in Ellington, said the 340B program provides essential revenue for her clinics.
“Without these savings that we rely on, we will have to take a hard look at what services we can continue to provide,” White said.
Many of the provisions in his bill were in the legislation he filed last year on the 340B program, Brown said. They were removed as lawmakers worked through one of the most difficult years in recent history, passing a record low number of bills, he noted.
“While we made some progress with last year’s 340B legislation, it’s clear that we still have much to do,” Brown said.
A biologic medication is made from a living organism or its products and a biosimilar medication is one that has the same effect but is derived from a different source and is often administered by physicians by infusion or injection.
Brown’s bill would require the same reimbursements whether the originally prescribed biologic or a biosimilar drug is used.
When a patient visits a pharmacy to obtain a medication that is then administered in a physician’s office, it is called brown bagging. When the pharmacy delivers the same drug to a physician’s office so it can be administered to a patient, it is called white bagging. The bill would require the insurance companies and PBMs to treat the transaction the same either way.
Daniel Good, vice president for pharmacy at Mercy Health, said the provisions will help providers keep their focus on patient needs.
“This bill is going to ensure that the health systems and the pharmacy and therapeutic communities make a choice in the best interest of the patients,” Good said.
Representatives of the insurance industry, who oppose the bills, said that the well-intentioned legislation will actually drive up costs for many.
“At the end of the day, it’s about that dollar,” said Shannon Cooper, lobbyist for the America’s Health Insurance Plan, the national trade organization of health insurance companies.
Employers work to control costs for themselves and employees and the bills interfere with those relationships, he said.
“When you meddle with legislation like this, when you break contract law, when you break agreements,” Cooper said, “that drives the cost of those services up for the ultimate consumer.”
