Unlike some health policy issues, the perennial topic of prescription drug access and affordability has often been met with bipartisanship in legislatures. Over 575 drug pricing bills have been introduced in 47 states and Puerto Rico as of Feb. 28, and several trends are taking shape.
Overseeing Pharmacy Benefit Managers
More than a quarter of introduced legislation this year addresses pharmacy benefit managers, or PBMs, which are paid third-party administrators of prescription drug coverage for insurers and employers. PBMs provide a wide variety of services, including developing and maintaining formularies, processing claims, and negotiating discounts and rebates between payers and manufacturers. Legislators are addressing PBMs in several ways.
One approach ensures that rebates PBMs negotiate from drug manufacturers are passed to consumers. At least 12 states have introduced bills that would require a patient’s cost-sharing to be calculated at the point of sale and reduced by an amount equal to a certain percentage of those rebates.
Prohibiting so-called white bagging and brown bagging policies is another growing legislative trend. Certain providers, such as oncologists and rheumatologists, purchase medicines that need to be administered in the clinic—those that are injected or infused, for example—and prepare them for specific patients prior to administration. These medicines are often costly and require special storage and handling. The provider then bills the insurer or PBM for the cost of the drug.
Who’s Holding the Bag?
White bagging: A provider purchases medication already prepared for the patient from a specialty pharmacy.
Brown bagging: The patient receives medication from the pharmacy and is then responsible for transporting it to a provider for administration.
In response, some insurers and PBMs are shifting to white bagging and brown bagging policies. White bagging means a provider purchases medication already prepared for the patient from a specialty pharmacy. Brown bagging means the patient receives medication from the pharmacy and is then responsible for transporting it to a provider for administration. Proponents say these policies improve patient outcomes because pharmacists may conduct drug utilization reviews and identify circumstances where a patient might have an adverse reaction to a prescribed drug. Opponents say patients sometimes are steered toward PBM pharmacies and that medicines can be mishandled, which may lead to increased costs for patients and payers.
Three states—Arkansas, Louisiana and Virginia—have laws restricting these policies and 18 states have proposed similar legislation for the 2023 session.
Making Insulin Affordable
Although the federal Inflation Reduction Act lowered the amount Medicare beneficiaries pay for insulin, affordability remains a challenge for some, including those with private insurance and the uninsured. Twenty-two states have limits on the amount a person pays for insulin and at least nine more could join them.
Proposed legislation in Oklahoma and Rhode Island would cap the amount a person pays for diabetic supplies, such as glucose monitors. Legislators in Kentucky, Massachusetts, Montana and New York introduced bills to establish a safety net program for people who need insulin urgently.
California legislation passed in 2020 allows the state to explore partnerships to manufacture low-cost insulin. Since then, lawmakers in Connecticut, Georgia and Maine are pursuing this idea for their states.
Managing Copays and Deductibles
In addition to reducing how much a person pays for insulin, legislators are taking a hard look at lowering consumers’ out-of-pocket costs in other ways.
Rhode Island is considering legislation to limit copayments for asthma inhalers. Some lawmakers in Colorado, Missouri, Rhode Island and Vermont want to extend copayment limits to epinephrine, the drug used in autoinjectors to mitigate a severe allergic reaction.
Another strategy is to restrict the use of copay accumulator policies, as 15 states and Puerto Rico currently do and 15 more states are considering. Manufacturers may offer copay-assistance coupons to patients to help offset the cost of their prescriptions. Not only do the coupons reduce the amount patients pay at the pharmacy counter when they fill their prescriptions, but the value of the coupons may also be applied to patients’ annual cost-sharing requirements, such as deductibles.
Opponents argue copay coupons incentivize the use of higher-priced medicines over lower-priced options, such as generics. Some also say copay coupons do not reduce drug prices, but shift the costs to health plans. Some health plans and PBMs have imposed copay accumulator policies that exclude manufacturer copay assistance from counting toward patients’ deductibles or annual out-of-pocket cost limits.
Tackling Prescription Pricing
Though many policymakers are passing laws to lower the cost of drugs, some are tackling the way drugs are priced.
Importing drugs from other countries has long been on legislators’ radar. Eight states are in various stages of establishing their own drug importation programs. Some states limit importation to drugs purchased from Canada, though laws in Florida and Colorado provide pathways to import drugs from other countries. Legislators in Illinois, Nebraska, New York, Rhode Island, Texas and West Virginia are seeking to create programs of their own.
Bills in five states aim to address drug price increases by manufacturers. For instance, an Arizona bill would authorize the attorney general to investigate price increases of 50% or more over the previous year paid by the state Medicaid program for off-patent or generic drugs. New York is considering a bill that would require investigation of prices that rise more than the cost of living on drugs the state deems critical.
Prescription drug affordability boards are independent agencies tasked with identifying and evaluating high-cost drugs. Seven states—Colorado, Maine, Maryland, New Hampshire, Ohio, Oregon and Washington—have affordability boards and four others are considering bills to establish one this session.
Limiting Prior Authorization
Cost isn’t the only barrier for patients trying to access certain treatments.
To reduce costs, some health plans require providers to obtain prior authorization for certain tests, procedures or treatments. Providers say this process can be arduous and time-consuming. West Virginia was first to pass legislation allowing providers who have had all their requests for a particular treatment approved in a six-month span to earn a “gold card” status, freeing them from future authorization requirements. Texas’ law applies to providers who have had 90% of their requests approved. In 2022, Louisiana followed suit, and this year at least eight states—Arkansas, California, Indiana, Iowa, Kentucky, Missouri, Montana and Nebraska—are pursuing similar gold card legislation.
Summing It Up
With hundreds of proposals under consideration and more expected in the weeks to come, legislators are working hard to get their bills passed. How many make it over the finish line, and how many will be left behind, are still open questions. You can find the answers by visiting NCSL’s Prescription Drug State Bill Database.
Colleen Becker is a senior policy specialist in NCSL’s Health Program.
NCSL acknowledges Arnold Ventures for its support of this publication.
Please note that NCSL takes no position on state legislation or laws cited in linked material, nor does NCSL endorse any third-party publications; resources are cited for informational purposes only.