September 8: Lowering Prescription Drug Prices in Washington State 

Policies to control high prescription drug prices have been proposed at the federal level, but very little effective action has been taken.(But now there’s an opportunity, with the #BuildBackBetter Reconciliation Package being debated right now! See below for ACTION you can take to get Congress to negotiate drug prices for Medicare!) Dozens of states have decided that their residents can no longer wait for Congress, and they’ve begun moving the needle on drug prices. Washington state is doing this on a number of fronts, all the while setting up infrastructure that paves the way for publicly funded and administered health care.

 At our September 8 event, HCFA-WA was fortunate to have three state pharmacy leaders speak and answer questions about making prescriptions affordable and accessible for Washingtonians.

We heard from Donna Sullivan, the Chief Pharmacy Officer of the Health Care Authority (HCA), Jenny Arnold, Chief Executive Officer of the Washington State Pharmacy Association, and Janel Jorgenson from the Department of Health’s Office of Immunization.  The speakers then engaged in a great Q & A session, kicked off by questions from Senator Karen Keiser (LD 33).

By way of background, the Washington State Health Care Authority (HCA) is the agency responsible for administering and regulating state-purchased health care. This includes Medicaid (Apple Health), public and school employees, prisons, state hospitals, and worker’s compensation insurance. It is the largest single purchaser of health care in the state, covering 2.5 million Washington residents. 

The HCA only regulates private insurance when under contract with their services, such as the Apple Health managed care plans. It does work in partnership with the Office of the Insurance Commissioner to manage the Cascade Care Plan on the Health Benefit Exchange.  

The agency has some drug programs, such as the Washington State Childhood Vaccine Program, for specific medicines. These programs are aimed at reaching all of Washington’s residents, not only those covered by HCA plans. The HCA has the administrative and regulatory structure in place that could be used for a publicly funded and administered universal state-based health system. This is one reason why HCFA-WA is very interested in promoting legislation that builds the resources and capacity of the HCA to further expand health care to all Washington state residents. 

Donna Sullivan, Chief Pharmacy Officer of the HCA, reported on significant developments and innovations that will result in savings not only for taxpayer-funded health programs, but also lower the costs of certain drugs statewide, to participating health plans, providers, and pharmacies.  The state would essentially act as a wholesaler AND middleman, without jacking up the price retaining any rebate savings. Bulk purchasing would be used with other states and/or nonprofit organizations to gain per-unit discounts with pharma. 

More specifically, Donna reported on the following:

• Prescription Drug Price Transparency Program: This program tracks the highest-cost drugs, price increases, the costs of new drugs, and the effects of these costs on insurance premiums, to help the state reduce the prices of the costliest drugs.
• Insulin and Generic Prescription Drug Purchasing (SB 5203): This law enables bulk purchasing in partnership with other states, nonprofit organizations, and other entities to reduce drug prices. Under this law, the state can sell to public and private plans and providers.
• Total Cost of Insulin Work Group: This work group would set up a state agency to become a licensed drug wholesaler and registered pharmacy benefit manager, and purchase enough insulin to cover the needs of the entire state.
• Single Apple Health Preferred Drug List (PDL): This list, which was established for all contracted Washington Apple Health (Medicaid) managed care plans, resulted in $36 million in savings in 2019.
• Naloxone and Hepatitis C Drug Access: These two Washington state programs use innovative purchasing strategies for both naloxone (used for emergency opioid overdose) and for hepatitis C medicines to reduce prices and obtain rebates. The naloxone drug access program is available statewide to patients regardless of their insurance status, while the Hepatitis C drug access program is available to patients enrolled with state-purchased health care. Legislation to fund this was passed in 2021 with a bulk purchasing scheme, with insurers paying in to provide the funds, similar to the Washington State Childhood Vaccine program (see Janel Jorgenson’s presentation below).

Jenny Arnold, CEO of Washington State Pharmacy Association, presented information about Pharmacy Benefit Managers (PBMs) contracted by health insurers to manage prescription drug coverage. Not many people know about PBMs, but they heavily influence how much we pay for our prescriptions and which drugs are covered. Ms. Arnold described how PBMs drive up drug costs by operating in an anti-competitive, unregulated, and non-transparent manner. The Prescription Drug Price Transparency program will bring sunshine on PBM practices and enable the state to more effectively regulate PBMs’ influence on drug costs. Consumers will in turn benefit from the savings. Ms. Arnold advised listeners to learn about PBMs, as they thrive by operating behind the scenes. (ed: one of the participants recommended the podcast Relentless Health Value for some episodes about PBMs)

Janel Jorgenson, Acting Vaccine Section Manager for the WA Office of Immunization, gave an overview of the Childhood Vaccine Program. This program  has successfully provided universal access to childhood vaccines for many years, regardless of patients’ insurance status, and saved costs for providers and taxpayers. The state purchases vaccines through a Centers for Disease Control and Prevention (CDC) contract for low prices and distributes them to providers at no cost to those providers. The plan is administered by a nonprofit entity, the Washington Vaccine Association, and partially funded by private insurers. HCFA-WA believes that the methodology and corresponding success of this program could be replicated to the purchase and distribution of other vital medicines, such as insulin. 

Q & A Highlights

We so appreciated having Senator Karen Keiser, President pro tempore of the Washington state senate, kick off the Q & A. Senator Keiser shared that she is planning to revive the Prescription Drug Affordability Board (SB 6088) legislation in 2022, with the following updates:  Upper payment limits and an excessive price increase tax. The tax could be applied to situations such as when insulin prices triple without providing new therapeutic benefits.

Senator Keiser then asked the panelists the following questions:

Q:  Could the Total Cost of Insulin Work Group use the Childhood Vaccine Program as a model to develop a low-cost, universal access, publicly administered insulin program?

A: The panelists agreed that the model is a good one on the purchasing side, but there are hurdles to bringing in pharmacies to participate. They also noted that other vital drugs are needed that should be considered for such a program.

*Note: the Total Cost of Insulin Work Group was passed by the legislature in 2020, but due to COVID-19 Pandemic budget constraints, the Governor did not sign it. However, the HCA plans to staff up the work group this fall and secure funding in the 2022 session.

We then received some excellent questions from the audience:

Q: How can someone get on the Total Cost of Insulin Work Group?
A: The HCA will post information for the public on the website soon. (ed.: A description of the appointees for the group can be found here).

Q: Is there data on savings from the $100 copay cap on insulin?
A: Ms. Sullivan: Expect a report in December.

Q: Is importing drugs a viable method to get cheaper medicine?

A: Ms. Arnold answers no for several reasons, including shortages in other countries and safety issues. A better idea would be to use single-payer countries’ drug prices as a negotiating tool.

There were more, most excellent questions, but alas, our webinar time was up! We hope to have another opportunity to address these questions in the future. Do you have a response to any of the following questions? Respond on our Facebook page!. 

Q:  What would the impact of Medicare drug negotiation prices be on everyone’s drug prices?

A: If it is included in the final reconciliation package, Medicare negotiation of drug prices would lower prices for all, not just for Medicare beneficiaries. Another bill HR 3, Another bill HR 3, (the Elijah E. Cummings Lower Drug Costs Now Act) also requires Medicare to negotiate pharmaceutical prices and an actuarial analysis of that bill showed the following reductions in cost-sharing and premiums by 2029: 

• Medicare Part D beneficiaries would see a $17 billion reduction in cost-sharing and premiums. 
• Medicare Part B beneficiaries would see a $18 billion reduction in cost-sharing and premiums.
• Private Plans: Individuals with private insurance would see a $54 billion reduction in cost-sharing and premiums.

Q: My BC/BS (Blue Cross/Blue Shield)  health insurance charges a $150 co-pay for a 90-day supply of medicine that is only available as a brand name version. Can I order the product legally by mail from Canada, since the cash price is considerably cheaper?

A: HCFA-WA is not a lawyer. We did find this information, again from the  KFF:

“There appears to be little enforcement by the FDA of the ban against importing FDA-approved drugs for personal use. Even if the personal importation of a drug is technically illegal, current law directs the FDA to exercise discretion in permitting personal importation of drugs when the product is ‘clearly for personal use, and does not appear to present an unreasonable risk to the user,’ which is reinforced in FDA guidelines.”

Q: Anyone want to comment on HR 1046, the Medicare Negotiation and Competitive Licensing Act of 2019, introduced by Rep. Doggett in the House [Congress]?

A: Here’s what Rep. Doggett has to say about it.