Mon, Jan 16, 2023 4:21 PM
By By Madison Hirneisen | The Center Square, The Center Square
(The Center Square) – A measure that would create a taxpayer-funded state board to conduct affordability reviews of prescription drugs was advanced by a committee of Virginia lawmakers Monday, clearing its first legislative hurdle in the General Assembly.
Lawmakers in the Senate Commerce and Labor Committee voted to advance Senate Bill 957, which seeks to establish a Prescription Drug Affordability Board that would be tasked with completing affordability reviews and voting on whether to establish an “upper payment limit” on purchases of prescription drugs in Virginia.
The board would be composed of five members with expertise in health care, health care economics or clinical medicine appointed by the governor and confirmed by the General Assembly. A Prescription Drug Affordability Fund would be established in the state treasury to fund the purposes of the board and reimburse state agencies for implementing provisions of the bill, according to the measure.
The bill comes in response to rising drug costs, which bill supporters say are causing hardship for residents of the commonwealth. According to an analysis from AARP, the price of hundreds of prescription drugs outpaced inflation, with data from Health and Human Services revealing the list price of more than 1,200 prescription drugs rose 31.6% between July 2021 and July 2022.
“These kinds of price increases are unjustifiable, they're not sustainable and they're causing harm to folks here in Virginia,” Jared Calfee, the associate state director for advocacy and outreach at AARP Virginia, told the committee. “A Prescription Drug Affordability Board would help us address this problem by keeping down some of these most expensive drugs that are treating life-threatening illnesses, like cancer and diabetes.”
Supporters also contend that the board would save the state and taxpayers money by reducing expenses to the state’s Medicaid program. At this time, it’s unclear what the fiscal impact of this bill would be, as a fiscal impact statement has yet to be posted.
SB957 follows action taken at the federal level through the Inflation Reduction Act signed by President Joe Biden last summer. Under the act, the federal government is required to negotiate prices for certain drugs covered under Medicare and drug companies are required to pay rebates if prices outpace inflation on drugs used by Medicare beneficiaries. Additionally, the act capped out-of-pocket costs for certain Medicare enrollees and limited the cost of insulin to $35 per month for Medicare patients.
The bill’s author, Sen. Chapman Petersen, D-Fairfax City, told committee members that in the aftermath of action at the federal level, the state has a “unique opportunity to go out and protect our constituents, protect our taxpayers and protect consumers.” This bill represents Petersen’s second attempt to create an affordability board after withdrawing a similar bill last year.
“Now that we have the federal law regarding the [upper price limits], for the first time, we're going to have the information about what a fair market price is for these very expensive drugs, which are on the market and which are being paid for by our constituents and being paid for by our taxpayers,” Petersen said.
Opponents of the measure pointed to a similar bill passed in Maryland in 2019, which they say has yet to produce results for patients.
“It cost the state of Maryland and its taxpayers to date $2.5 million and has yet to save a patient one cent at the pharmacy counter,” Nicole Palya Wood, a lobbyist with the Pharmaceutical Research and Manufacturers of America, told committee members. “You are looking at something that's going to be done by the federal government as well, so my advice would be to take a pause and let the federal government do their work.”
Lawmakers on the committee ultimately voted to report and re-refer the bill to the Senate Finance committee for another hearing.
In other action by the committee, lawmakers also voted to advance a bill requiring health insurance carriers to provide coverage for prescribed contraceptives and contraceptive devices. Supporters argue the bill will help make birth control more accessible for individuals.