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Senate committee takes on high drug costs

   

JEFFERSON CITY, Mo. — An interim committee kicked off its deep dive into high drug costs — particularly focused on every day medication like insulin — with its inaugural hearing Wednesday afternoon. 

For some senators on the Senate Prescription Drug Transparency Interim Committee, escalating drug costs is a familiar topic: David Sater is a retired pharmacist; Paul Wieland owns an insurance company and has sat on health boards; Bill White is a member of the Senate Health and Pensions Committee. 

But for Sen. Jason Holsman, the committee’s chairman, the discussion was personal. Holsman’s mother passed away from pancreatic cancer in July. 

State Sen. Jason Holsman

“The cost of off-label medication that wasn’t insured for my mother’s cancer treatment was an eye-opening experience that led me to start questioning why it is so high,” Holsman told The Missouri Times following the hearing. 

“I approach this as a complete layperson. I’m glad to have the support of the other committee members. We’re getting a lot of input from senators who have experience in the area,” Holsman continued. “I just come at it from having just gone through a very trying, personal experience where we were told the off-label medication that insurance wasn’t going to cover was $500 a pill; that’s $12,000 a month. That’s difficult for a lot of families to try to afford that and save someone’s life.” 

On Wednesday, representatives from the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Pharmaceutical Care Management Association (PCMA) testified. The committee also plans to hear testimony from representatives from insurance companies, pharmacies, and Medicaid. 

Committee members stressed they would have a constraint: Federal rules will take precedence over some changes lawmakers may want to make at the state level. 

PhRMA

There are currently 4,000 medications in the research and development phase at this time for FDA review; 140 of those have the ability to be personalized and 74 percent could be the first of its kind for the condition it will treat, Sharon Lamberton from PhRMA told the committee.

“We have great innovation in the pipeline we’re thrilled to see,” Lamberton said. 

But this research and development process is “risky and expensive” — with a very low success rate, Lamberton said. 

According to Lamberton, it costs $2.6 billion “to bring medicine from bench to bedside” which takes on average at least a decade. Furthermore, only 12 percent of medications actually make it through the process.

But lawmakers questioned why more generic products — drugs that albeit may not be as modern but could be cheaper — are not available for consumers. 

“I have a concern,” White said. “If you can produce an insulin that works — that you take three times a day or whenever you need to — if it functions at a lower price and may be easier. And you’re developing new drugs to do long term, but the old stuff would still work.”

White requested details regarding companies’ financial standing and profit information. 

While generic medication can work for some people, it won’t for those suffering from certain illnesses, such as epilepsy or cardiovascular diseases, Lamberton said. In Missouri, 90 percent of prescriptions filled are generics, she said. 

“Generics have their place, but in the patent life that we have, and in the life cycle of drugs, the patent is important to preserve for our companies to innovate and to continue innovating and to have that incentive to recoup that massive resource investment we have to bring a drug to market,” she said. 

Holsman said he didn’t want to “stifle innovation” but wanted to look more into profit margins and options for individuals — especially those who would still benefit from an older version of the medication.  

PBMs

Pharmacy benefit managers (PBMs) — particularly the need and cost — came under scrutiny by the committee during its inaugural meeting. PBMs are considered an intermediary between drug manufacturers and pharmacies on behalf of the insurer, processing certain billing claims from the pharmacy to an insurer, developing formulary packages for insurers, creating a pharmacy network for the insurer, and negotiating prices and rebates. 

“PBMs are probably the least understood but most important part of supply chain. PBMs are the primary advocate for patients in the fight against rising drug prices because of their negotiations with drug companies and pharmacies for lower drug prices and higher quality,” Scott Woods from PCMA said. 

But White, in particular, took umbrage with the argument PBMs are needed to ensure competition among drug manufacturers continue or audits occur. 

“They were competing long before 1980. It’s called a free market. There’s going to be competition; when a patent runs out, other companies are going to leap in there,” White said. 

The next meeting of the interim committee has not been scheduled as of yet.