Prescription drug price reform bill fell apart in state Senate over small business concerns

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Georgia lawmakers have moved in recent years to curb many Pharmacy Benefit Managers negotiating practices that advocates consider harmful to patients.

Credit: Stock photo

ATLANTA — After sailing through the Georgia House of Representatives, a close vote in a Senate committee blocked the progress of a bill aimed at reducing some prescription drug costs for consumers. 

The “Lowering Prescription Drug Costs for Patients Act” would have passed on prescription drug rebates to some Georgia patients at the cash register. It was one of several health-related measures to mire in the 2023 Georgia General Assembly session.

The bill took aim at pharmacy benefit managers, often called PBMs. These companies are designed to help manage prescription drugs for health insurers and they often require payments — known as rebates — from drug manufacturers for featuring certain medications in approved drug lists for patients. 

The Georgia bill would have required half of the value of those rebates to be passed along to Georgia patients on many commercial insurance plans. 

“We don’t have any problem with … with the company making a reasonable profit,” said Rep. Mark Newton, R-Augusta, the bill’s sponsor. “When a corporate desire for excess profits starts to harm patients, I think that’s when we as legislators ought to step in and protect patients.”

“The top three PBMs control 80% of the drug choices that all Americans have,” Newton added. “One example is Caremark, CVS and Aetna — that’s a combination that has a common ownership.” 

Other large PBMs Georgians may be familiar with are OptumRx, owned by UnitedHealth Group, and Express Scripts, owned by Cigna Healthcare. 

Opponents argued the bill would have reduced the flexibility of small businesses to decide how to spend pharmacy rebates. 

“If it passes, then that limits and restricts the flexibility of designing plans that will fit the overall group [of employees],” said Mychal Walker, chairman of the National Federation of Independent Business’ Georgia leadership council. “The owner will not be able to utilize those benefits overall in order to lower the costs.” 

Walker and other opponents also argued the measure would drive up insurance premium costs. 

Newton disagreed with that, saying the measure would increase premium costs by just over $1 per month and that the small increase would be offset by lowered drug costs for patients. 

“[Patients will] know that they or their loved ones can access medication therapy that their doctor prescribes and that they’ll be able to do it affordably,” Newton said. 

A late March hearing on the bill had initially been billed as “meeting only.”  Health and Human Services committee chair Sen. Ben Watson, R-Savannah, called a vote while the meeting was in progress. 

The measure lost in a 6-5 vote that did not fall along party lines, a departure from the regular partisan votes that often drive Gold Dome decisions. 

Sen. Sonya Halpern, D-Atlanta, was one of the Democrats swayed by the argument that the bill would stymie small-business owners’ control over how to use the drug rebates. 

“There’s no guarantee that every employee would get the prescription benefit since the rebate dollars would have to be spent down at the point of sale only,” Halpern said. 

Sen. Larry Walker, R-Perry, shared Halpern’s concern.

“If we keep restricting options and flexibility for small businesses, they’re going to end up saying we can no longer afford to provide health benefits,” Walker said. 

Newton pushed back against that argument, contending that the rebates in question contribute to PBM and health-insurer profits and do not get passed on to small businesses. 

“A lot of what they’re making [profit] off of, is not passing it through to reduce [health insurance] premiums, but passing it through to their shareholders, which normally I don’t mind until it becomes excessive,” Newton said. “When excessive profit hurts patients, I think that’s our obligation to step in at that point and defend the patient.

Patient advocates were bitterly disappointed by the committee decision. 

“For another year, PBMs and their affiliated insurance companies will continue to deny Georgians with chronic illnesses the benefits of negotiated drug rebates as they profit from the sickest of our citizens,” said Heather Breeden, the senior manager of advocacy for the National Multiple Sclerosis society. 

“We are really perplexed … that our own legislators will not stand behind the patients and put them first,” echoed Dorothy Leone-Glasser, executive director of Advocates for Responsible Care. “It’s very disheartening.” 

Newton was also disappointed but told Capitol Beat that he hopes the bill will get another chance at full passage during the 2024 session, the second year of the current two-year legislative term.

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.