Drug manufacturers may be supporting a bill to lower the cost of prescription drugs because it will give them a competitive advantage, the measure’s opponents said Monday.
Representatives from the drug industry have said they support House Bill 1100, to which the House gave preliminary approval on Monday, because it would offer some uninsured Coloradans access to discounted drugs.
But a Republican lawmaker, representatives from a major health plan and a business group said the measure would allow the drug industry and others access to confidential pricing information between health plans and drug makers.
“The reality of that impact is increased pharmaceutical cost for all employers,” said Travis Berry, a lobbyist for the Colorado Competitive Council, a statewide coalition of employers and chambers of commerce.
John O’Brien, of the Pharmaceutical Research and Manufacturers of America, denied the measure would make confidential pricing information public.
The proposal is designed to provide discounted drugs to uninsured Coloradans who earn less than 250 percent of the federal poverty level, or $50,000 for a family of four, and those 60 and older.
It would provide them access to the same prices state employees pay when purchasing drugs, which are discounted on average about 30 percent.
To provide consumers with those prices, the measure takes an average of the discounts the state’s health plans received the previous year.
Susan Cox of Kaiser Permanente said that once health plans start disclosing the discounts they negotiate, “those deep discounts go away.”
“Instead of giving everyone the deep discount, they give no one the deep discount,” she said, adding that such a move would increase drug costs for Kaiser’s 8.5 million customers nationwide.
Cox said the drug industry has been adamant about tying the reimbursement rate to prices paid by health insurance companies.
Wanda Moebius, PhRMA spokeswoman, said the group has declined to negotiate on that point “because we think the program as written is good … and offers the best discounts for patients.”
Republican Rep. Debbie Stafford of Aurora said the disclosure may reduce health plans’ ability to competitively negotiate prices.
“I think there’s concern that there is a bigger agenda, and not just in Colorado but across the nation, to challenge discounts and rebates,” Stafford said.
But O’Brien of PhRMA said it’s not possible to determine what a health plan negotiates with a drug company because public information is averaged.
“There’s no public disclosure of the specific rebate that’s offered to a company for a specific drug, so the insurer’s business information remains secret,” he said.
And Jeff Lewis, an advisor to the Colorado AFL-CIO and president of the Heinz Family Philanthropies, which have joined PhRMA in support of the legislation, said “the only public data here is … what the average discounts are on the prescriptions.”
Cox, of Kaiser, however, said there could be drugs that only Kaiser carries. If that were the case, it would be clear what Kaiser’s discount is as soon as a program participant bought the drug.
Chris Frates can be reached at cfrates@denverpost.com or 303-820-1633.
