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Putting Patients First: Prescription Drug Policy in 2022

By Colleen Becker  |  November 29, 2022

With the dust of the elections settling and the new year rapidly approaching, state lawmakers are developing their legislative priorities in every policy area, including prescription drugs. More than 70 bills passed in 26 states this year, many with bipartisan support. The overarching theme could be described as “policies to support patients,” as many states focused on reforming pharmacy benefit manager practices, reducing out-of-pocket costs and addressing utilization management policies.

Will that be the case in 2023? To predict what trends might emerge, it helps to consider what has already occurred.

PBM Reform

About one-third of prescription drug-related legislation focused on reforming the practices of pharmacy benefit managers—companies that manage drug costs on behalf of a client or a population—and encompassed a variety of approaches. For example, Iowa and New York established that PBMs have a fiduciary duty to operate in the best interest of their plan members. Other states—including ColoradoIllinoisMarylandMichiganNebraska and Virginia—now require PBMs to reimburse 340B covered entities, or pharmacies under contract with covered entities, at the same rate as pharmacies that do not participate in 340B. Tennessee centered efforts on PBM pharmacy networks, allowing patients to choose where they get their prescriptions.

Reducing Out-of-Pocket Costs

To shield patients from out-of-pocket costs, lawmakers have paid particular attention to health plans’ growing use of copay accumulator programs, which restrict a manufacturer’s assistance coupon from counting toward a patient’s annual out-of-pocket maximums, such as deductibles. When the value of the coupon is exhausted at the pharmacy counter, the patient must cover the full amount of his or her annual cost-sharing requirement before plan benefits kick in. Laws in 15 states and Puerto Rico now require any payment made by or on behalf of enrollees be applied to their annual out of pocket cost-sharing requirement.

The amount that patients with insurance pay for their prescriptions often depends on how their cost-sharing is structured. Cost-sharing usually takes the form of either coinsurance in which patients pay a percentage of a drug’s list price, or a flat-fee copaymentColorado is the first state to require health insurance carriers to structure 25% of their plans in the individual and small-group market as copayment-only cost-sharing tiers. Copayment-only plans protect patients from list price increases and deliver more predictable spending throughout the year.

Similarly, 22 states have implemented some type of monthly copayment cap on insulin ranging from $25-$100 per monthly supply. Delaware is the first state to pass legislation limiting the amount a plan member is required to pay for diabetes equipment and supplies—blood glucose meters, testing strips, insulin pumps, etc.—to no more than $35 per month.

Addressing Utilization Management Policies

Some legislators focused on the use of utilization management policies by health plans and PBMs. For instance, bills in Colorado and Kentucky allow patients who are already stable on a medication to bypass a step therapy process, which requires trying a cheaper drug before “stepping up” to one that costs more. Legislation in Louisiana and Michigan addressed prior authorization by streamlining the process and reducing the time it takes for physicians to receive a response on whether a treatment has been approved. New York now prohibits health plans from modifying their formulary during the plan year, which ensures that patients will maintain prescription coverage during that time.

On Tap for 2023

Under the Inflation Reduction Act, the federal government will soon be allowed to negotiate prices for some drugs covered under Medicare. It also caps annual out-of-pocket spending for Part D enrollees and limits monthly cost-sharing for insulin. Additionally, drug manufacturers will be required to pay rebates to Medicare if prices rise faster than inflation. These provisions do not apply to the commercial health insurance market, but interest is growing in how states may apply them.

Lawmakers across the country will soon return to statehouses, and knowing what policies they might undertake is difficult to forecast. NCSL will closely track these trends and more during the upcoming session.

Colleen Becker is a project manager in NCSL’s Health Program.

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