HARTFORD, CT — The state’s bipartisan Prescription Drug Task Force aims to deliver lower prescription drug prices, but even one of its leaders says any benefit to consumers is a way off.
Gov. Ned Lamont signed Public Act 25-167 into law July 30. Its aim is to implement the task force’s recommendations in an effort to reduce the cost of prescription drugs for individuals and the state and to increase transparency in pricing of these drugs by the pharmaceutical middlemen known as pharmacy benefit managers (PBMs).
State Sen. Jeff Gordon, R-Woodstock, one of four task force co-chairs, said the legislation is a first for the state.
“We’re setting in motion for the first time in Connecticut, a big effort to hold accountable and transparent the middlemen, the pharmacy benefit managers who negotiate huge billions of dollars’ worth of deals on getting these prescription drugs, but really don’t pass the savings on to consumers,” he said.
Gordon said it probably would be about a year before consumers start seeing any benefit.
To achieve the goal, Gordon said the task force is also investigating numerous mechanisms, like the possibility of group purchasing of drugs by the state itself to try and achieve lower prices.
Plus, the task force will conduct a feasibility study into whether purchasing prescription drugs from Canada, which historically has lower drug prices, might be possible.
Gordon said the state of Florida tried this route over a year ago after getting clearance from the FDA but so far, no cheaper drugs have been bought from Canada or its drug manufacturers.
“Canada pretty quickly announced, after Florida made its announcement that, hey, we’re not going to hurt ourselves by exporting drugs and (creating) a shortage in Canada,” he said. “I understand that.”
Any importation plan would be a long-range goal, he said.
“We’re not looking to import drugs like tomorrow, but set a stage in a mechanism about what could be possible in Connecticut if in the future this becomes something more realistic to do,” he said.
One other avenue the task force is looking at is to manufacture generic drugs in Connecticut, to essentially be a stopgap measure if there is a drug supply shortage.
“We still have to deal with an FDA federal process,” he said. “But these are things that when there are times that there are key shortages and we need to ramp up production, the FDA and the Congress both have recognized that this is something we need to be looking at more in the states.”
The task force is made up of various stakeholders, from legislators to pharmacy owners, PBMs and other industry experts.
CVS Caremark, the PBM for the state’s Employee Health Plan and Partnership Plan, said in a statement that the company believes it is providing value for money already, and would continue to do so under the new law.
“On average, CVS Caremark reimburses independent pharmacies in Connecticut 45% more for generics and 27% more for brand-name drugs than CVS pharmacies – supporting a diverse and stable pharmacy network,” said Shelly Bendit, CVS Caremark’s senior manager of corporate communications.
“Our contracts with clients, including the State of Connecticut, are transparent and aligned with fiduciary standards recently updated in state law, which emphasize good faith and fair dealing.” she added.
Despite those assurances, CVS Caremark was recently ordered by a federal judge to pay $289 million in damages and penalties after it was found to have overcharged Medicare for prescription drugs.
Greg McKenna owns a small chain of five independent pharmacies in Connecticut and knows all too well the power of the PBMs. He isn’t impressed with the new bill.
“This is a useless piece of legislation,” he said. “It really fails to address the PBM problems of taking manufacturer rebates and using the money to increase their stock price and line the corporate coffers.”
McKenna said the bill fails to have any kind of real enforcement action.
“In my case, it further jeopardizes the jobs of my 96 employees and the 30,000 residents we take care of,” he said.
PBMs were originally created to help reduce the cost of drugs, but over the years they have been acquired by giant healthcare corporations so now there are only three – CVS Caremark, Express Scripts and Optum Rx – that effectively process and control 80% of all prescription drug claims in the country.
“The government is falling victim because they haven’t taken the time to understand where the dollars are going,” McKenna said. “The money is there, it’s just where the money is going. The PBMs scare the legislators and say this is going to raise costs. It won’t raise costs. The legislators have got to make sure that the money that is taken from the manufacturers is put into actually lowering the cost of drugs.”
Gordon admitted the new bill has its flaws and enforcement against the PBMs is something the task force and the state will have to be mindful about moving forward. Until the new law really starts to take effect, Connecticut and State Comptroller Sean Scanlon have introduced a new drug discount card called ArrayRX, which gives immediate price relief to any individual who has the card when they go to their local pharmacy.