RxGreed: What We Said

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On March 5, AARP Rhode Island advocacy volunteers testified at the State House on seven bills before the Senate Health & Human Services Committee. These bills, aligned with similar House bills, are aimed at lowering the cost of prescription drugs for all Rhode Islanders.

Among the measures Rhode Island is considering are these proposals:

Allow Importation

Big drug companies are making billions in profits while Rhode Islanders are struggling to make ends meet. FDA-approved prescription drugs imported from Canada and other countries could save Americans and all taxpayers billions.

Create Price Transparency

Establish a Prescription Drug Affordability Board charged with reviewing prescription drug prices annually to protect Rhode Islanders from overcharging by prescription drug companies.

Prohibit Pharmacist “Gag Rules”

Prohibit “gag rules” that prevent Rhode Island pharmacists from sharing information with consumers, especially information that provides them with the lowest price possible. For example, a pharmacist can’t mention that a prescription can be filled at a lower cost if paid for out of pocket.

Our volunteers told personal stories of how increasing high drug prices have hit their pocketbooks and threatened their financial security. They asked lawmakers why Americans pay higher prices for drugs than almost anywhere else in the world. And why drug manufacturers are allowed to make enormous profits.

You may watch the hearing on Capitol TV, beginning at the 29:00 minute mark.

AARP Rhode Island also submitted the following written testimony.


S-2321- RX Drug Importation

Chairman Miller and members of the Health and Human Services Committee, on behalf of AARP- Rhode Island and our over 132,000+ members in Rhode Island we are in strong support of S-2320 allowing for state importation legislation that would authorize a state to seek federal approval to import prescription medication on a wholesale basis from Canada or countries with similar safety and quality standards.

A state-administered wholesale drug importation program could be structured in a variety of ways and could:

• Be available to all state residents or just people covered under state payer programs (such as Medicaid, state employees, or prisons);

• Include all state-licensed payers, distributors, and dispensers, or just a subgroup; and

• Include many drugs or just a small number of products.

This would not be a program of personal importation, but instead the state itself would contract with a fully licensed, regulated supplier from Canada or another country that is required to provide only drugs that are fully regulated and compliant with that country’s laws. Then the state would distribute those drugs under the procedures determined by the state program. For example, the state could contract with a state-licensed wholesaler, operating under the terms of the state program, to handle the imported product and manage distribution to state-licensed retail pharmacies.

Policymakers have long looked to Canada as a potential source for savings, where prescription drugs cost on average 30 percent less than in the U.S. For drugs imported under this program, states could make sure savings are passed on to payers and consumers to help them afford their medications. Under a state importation program, pharmacies could be required to provide the same lower Canadian prices when selling to uninsured customers or people paying out-of-pocket during their deductible period.

Though not a complete solution to the problem of high drug prices, safe and legal importation will help put downward pressure on prices. Legislative fiscal analyses of state importation proposals have estimated significant savings for states and consumers. The size of savings and which consumers benefit will depend on how a state’s program is structured. State officials in Vermont have estimated a possible savings of $5 million annually based on a list of specific birth control, insulin and pricey medications for HIV and multiple sclerosis that might be included in the program. Similarly, Florida projects that its program would save over $150 million dollars annually when fully operational, based on a concept paper the state submitted to the federal government in August 2019.

Finally, let’s dispel a myth that is at the centerpiece of the drug industries argument against importation. Big Pharma says that we should not import because of safety concerns. This is simply untrue. First and foremost, the FDA will only approve the plan if safety can be assured. Secondly, most people do not realize that more than 70 percent of the U.S. prescription drug supply is already imported, and more than 80 percent of the raw pharmaceutical ingredients are imported for U.S. manufacturing of finished products. Our prescription medications are already part of a safe, efficient, global supply chain. A Rhode Island importation program would use the existing global manufacturing and supply chain system to improve prescription drug affordability.

Please take this important step to protect residents across the state from unaffordable prescription drug costs by passing this legislation.
Sincerely,

John DiTomasso
Associate State Director-AARP Rhode Island

S-2321- RX Drug Transparency

Chairman Miller and members of the Health and Human Services Committee, on behalf of AARP- Rhode Island and our over 132,000+ members in Rhode Island we are in strong support of S-2318 that require drug manufacturers to report the reasons behind high prices and price increases.

Vermont, was the FIRST state to pass a RX transparency law in 2016. And transparency bills have continued on an upward trajectory since then. According to NASHP data, so far 12 states have transparency laws on the books and, and in 2019, there have been 52 transparency bills filed across 27 states. In 2020, 37 states have filed 147 transparency bills.

The principle behind this bill is that increased disclosure around pricing practices will result in more meaningful and actionable information for states and accountability for manufacturers. Drug pricing transparency legislation will also help payers determine whether a drug price or price increase is justified. Moreover, the added scrutiny brought on by transparency legislation could encourage drug manufacturers to reconsider their standard practice of setting high launch prices and then increasing them year after year.

This bill requires pharmaceutical companies to provide information about their pricing practices including how a drug is priced, and to justify large price increases that exceed a predetermined threshold. The trigger for this information would be a drug with a wholesale acquisition cost of at least one hundred dollars ($100) for a thirty (30) day supply before the effective date of an increase described by this subsection. Not later than the thirtieth day after the effective date of an increase of forty percent (40%) or more over the preceding three (3) calendar years or fifteen percent (15%) or more in the preceding calendar year.

One of the reasons, prices keep going up, is that consumers simply don’t have all the information. We have been barred from accessing data on the true costs. If you can’t explain or document a problem, it’s difficult to advocate for the solution.

AARP- RI believes passage of this legislation would be a major step in addressing the skyrocketing cost of prescription drug prices that are making it harder for Rhode Islanders to afford the medicines they need.

S-2323- Prohibition Against Gag Clauses

Chairman Miller and members of the Health and Human Services Committee, on behalf of AARP- Rhode Island and our over 132,000+ members in Rhode Island we are in strong support of S-2323 that creates a prohibition against gag clauses.

Specifically, the legislation is intended to eliminate “gag clauses” in contracts between pharmacies and PBMs that prohibit a pharmacist from informing a consumer if a drug would cost less if the consumer paid out-of-pocket, rather than through their insurance plan.

From 2016 to 2018, thirty states enacted laws to prohibit gag clauses. Building on this momentum, the President signed into law two federal laws that prohibit gag clauses in Medicare and Medicare Advantage plans as well as in most commercial insurance plans.

In 2019, ten states passed bills that built on the federal prohibitions by codifying the federal language in state statute, broadening the prohibition to include other types of coverage (e.g., state employee health plans) or requiring pharmacists to proactively inform consumers if a drug would cost less if they paid out-of-pocket. This legislation is intended to achieve all of the aforementioned conditions that go beyond the federal regulation.

A prohibition on the use of gag clauses means that some consumers could pay less for their prescriptions if the out-of-pocket cost is less than the co-pay under their insurance.

We strongly urge the Committee to pass this legislation so that Rhode Islanders can obtain relief from the high cost of drugs.


RE: H-7126- Cap on Insulin Cost

On behalf of AARP- RI and our over 132,000+ members in Rhode Island we are in strong support of H-7126 that limits the total amount an insured person is required to pay for a covered prescription insulin drug at an amount not to exceed $100 per 30-day supply.

There are 82,316 people that have pre-diabetes or diabetes in Rhode Island and they are having difficulty affording their insulin because the cost has skyrocketed by more than 550% over the last 14 years.

One example: Lantus, a form of insulin used to treat diabetes, increased from $2,907 per year to $4,702 per year from 2012-2017.

For diabetics who need insulin to live, paying for it is a daily struggle. That is unacceptable. For many of these individuals, insulin serves as the only drug to help them stay healthy. According to the Centers for Disease Control and Prevention, the high price of insulin can lead some patients to begin rationing their diabetes medication or not fully comply with dosing as prescribed by their doctor. Furthermore, a 10% increase in insulin adherence rates can produce up to a 29% decrease in overall health care costs related to diabetes.

We know that the high price of prescription drugs is a burden on many Rhode Island residents. Every day, our relatives, friends, and neighbors are forced to choose between filling life-saving prescriptions or paying rent, buying food and affording other critical essentials.

Older Americans are hit especially hard. Medicare Part D enrollees take an average of 4-5 prescriptions per month, and their average annual income is around $26,000.

H-7126 lowers drug costs for consumers so that they can afford their medication as prescribed. Capping the amount that a consumer pays every month for insulin, will lower consumer’s prescription drug expenditures, making prescriptions more affordable and accessible.

Please take this important step to protect residents across the state from unaffordable prescription drug costs by passing this legislation.

S-2319- RX Drug Out of Pocket Cap

Chairman Miller and members of the Health and Human Services Committee, on behalf of AARP- Rhode Island and our over 132,000+ members in Rhode Island we are in strong support of S-2318 that limits a beneficiary's out-of-pocket expenditures for prescription drugs to limits established for self-only and family coverage per year contained in the 223(c)(2)(A)(i) of the Internal Revenue Code of 1986.

Sixty percent of likely voters age 50 and older report that prescription drug prices are unreasonable, and many indicated they have had or will need to make trade-offs to afford their medications. Placing a cap a consumer’s out-of-pocket prescription drug expenses is one approach to relieve consumers’ financial burdens.

What would an out-of-pocket cap mean for consumers?

· Lowers a consumer’s out-of-pocket prescription drug expenditures, making prescriptions more affordable and accessible.

· Potential to improve drug adherence by preventing cost-related behaviors like splitting medications or not filling a prescription at all.

At least 20 states have enacted legislation that limits consumers’ prescription drug-related out-of-pocket costs to a certain amount per month.

We strongly urge passage of this legislation so that Rhode Islanders can obtain relief from the high cost of drugs.

S-2324- Limits on Insurance Plan Formulary Changes

Chairman Miller and members of the Health and Human Services Committee, on behalf of AARP- Rhode Island and our over 132,000+ members in Rhode Island we are in strong support of S-2324 that places limits on formulary changes.

Many people agonize over the various health care plans in an attempt to find a plan that is conducive to their financial situation and would address their drug needs in the most cost effective manner. They finally select a plan only to see a formulary change in a drug(s) (e.g tier bump up) midyear during their plan year.

Since most consumers can only switch health plans during their annual open enrollment period, midyear formulary changes can trap consumers in a plan that—while suitable at the beginning of the year—is no longer a good fit for their health needs. Consequently, all of the pre-year planning for a cost effective plan goes down the drain.

These changes can have a devastating impact on consumers, who face higher costs as a result. Consumers may need to choose between paying more out of pocket or switching to a different, and possibly less effective, drug to reduce the impact on their finances. If a patient is forced to switch their current medication due to changes in their coverage, this can have adverse health outcomes, including less effective treatment and negative side effects.

We know that many consumers choose their health plan based on prescription drug coverage, particularly patients with multiple chronic conditions. When they make this choice, they are locked into that health plan for the remainder of the contract year, though there is nothing in law that compels the health plan to stick to their end of the contract.

This legislation would allow an issuer of a health benefit plan to modify drug coverage pursuant to a health benefit plan only if the modification occurs at the time of coverage renewal.

We are confident that this bill will not increase consumer costs. Health plans enter into multi-year drug price protection agreements with Pharmacy Benefit Managers (PBMs), and have accounted for drug costs through the plan year before a plan is marketed to consumers. Additionally, other states such as California, Illinois, Louisiana, Maine and Nevada have implemented similar laws and have not experienced increased health care costs as a result.

S-2320- Prescription Drug Affordability Board

Chairman Miller and members of the Health and Human Services Committee:

On behalf of AARP- Rhode Island and our over 132,000+ members in Rhode Island we are in strong support of S-2320 that creates a Prescription Drug Affordability/Group Purchasing Board.

The intent of the Prescription Drug Affordability Board is to protect State residents and other stakeholders from the high costs of prescription drug products. The board must make specified determinations, collect data, and identify specified prescription drug products that may cause affordability issues; may conduct a cost review of each identified drug product; and, if in the best interest of the state, to establish a process for setting upper payment limits for certain prescription drug products. The bill also establishes a stakeholder council to assist the board.

AARP Rhode Island doesn’t think Rhode Islanders should have to continue choosing between paying for their medications versus food or shelter. Astronomically priced drugs are making everyone sick, but Rhode Island seniors are particularly vulnerable to endless substantial escalations in their prescription drug costs. AARP is actively working on ways to help make prescription drugs affordable for its members and all Americans. AARP strongly supports S-2320.

Please take this important step to protect residents across the state from unaffordable prescription drug costs by passing this legislation.