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Rep. Mark Newton, sponsor of HB867, at a House Special Committee on Access to Quality Healthcare meeting Nov. 11, 2021.
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Lawmakers weigh proposal to lower prescription drug costs in Georgia
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When Bernice Isaac arrived at her local pharmacy to pick up a new hormone imbalance medication in January, she was stunned to see a $310 price tag.
The Marietta resident is no stranger to prescription medication — she suffers from what she says is a “laundry list of illnesses,” including diabetes, lupus and kidney disease. But even after years of budgeting for her prescriptions, Isaac said the price hurt.
“That’s a lot to ask somebody to pull out of the air to get a prescription that’s necessary,” Isaac said. “It’s a lot of money to be hit with on the first of the year, right after the holidays.”
A new bill aims to lower the cost of some brand name prescription drugs for insured patients by increasing transparency in medication pricing for Georgians, said state Rep. Mark Newton, the sponsor of HB867.
Newton, a Republican from Augusta, said he was moved by hearing from patients who try to spread their medication out or take smaller doses in order to cut costs.
Currently, most drug prices are set by brokers called pharmacy benefit managers using a calculation protected under law as a trade secret, meaning they don’t have to share it with consumers and patients.
HB 867, which passed the state House 166-1 and now sits with the Senate Insurance and Labor Committee, would require these companies to calculate prices based on the net cost of the medication, or the listing price after rebates.
Rebates are portions of the purchase price that are returned to the buyer. But in many cases, the buyer isn’t the person standing in line at the pharmacy — it’s the pharmacy benefit manager company that gets the money back. Patients may pay more out of pocket based on their share of the higher price, before the rebate, which is not disclosed.
Newton said Georgia’s government can’t outlaw the confidential rebate process altogether since many companies operate outside of the state, but they can regulate how pharmacy benefit managers operate in Georgia. He said he tried to structure his bill in alignment with previous Supreme Court decisions so that it would stand up in court if challenged. He also emphasized that not all drugs would be covered.
“We’ve tried to be very careful that we’ve done something that is entirely constitutional,” Newton said. “That’s why we tailored this very narrowly.”
The journal Health Affairs reported in 2017 that 80% of Americans were covered by one of the top three pharmacy benefit manager companies. With pricing happening behind closed doors, it’s a challenge for prescription users to discern how much their medication may truly cost.
“These companies are just making oodles and oodles of money every year, but the people who need the medications can’t afford them,” Isaac said.
Meanwhile, brand-name drug prices are increasing nationally.
A study published by the National Center for Biotechnology Information showed that 98% of prescriptions increased in cost at least biannually. It predicted that prices will continue to increase.
Dorothy Leone-Glasser, the director of patient advocacy group Advocates for Responsible Care, said that access to brand name medications is important for many patients as certain specialty drugs don’t have an effective generic equivalent.
“If there is a different drug, the patient’s probably already been on it and failed and it wasn’t as effective as it should be,” said Leone-Glasser, who said she suffers from lupus and seizures.
“I go through that all the time,” she said. “This is my fourth seizure medication that I’ve been on in my life, only because either they lose their efficacy, or they just don’t hold you long enough.”
Pharmacist Suzanne Davenport, owner of Southern Drug Company in Blue Ridge, Georgia, is a supporter of Newton’s bill. She said she and her staff care deeply about the patients that come to their pharmacy and she thinks the proposed reforms would help them.
“We’ll do everything we can to support them,” said Davenport, who oversees regional outreach for the Georgia Pharmacist Association. “Lowering drug costs at any pharmacy is of most importance to us.”
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