House lawmakers fight 'crippling problem' by seeking to curb drug costs, hike care access
House lawmakers announced a package of more than a dozen bills Wednesday to curtail health care costs in Michigan, including proposals to cap insulin co-payments and oral chemotherapy.
House Speaker Jason Wentworth, R-Farwell, announced the more than 15-bill package Wednesday as an effort to solve "a crippling problem" that has gained emphasis during the pandemic as people struggle with job loss, illness and COVID deaths.
"In every case, the existing problems with our rigged health care system are magnified," Wentworth said. "But as far too many people know in our state, those problems have always been there. It is well past time to fix this problem."
House Health Policy Committee Chairwoman Bronna Kahle, R-Adrian, expressed optimism that "meaningful bipartisan reform is possible" and people's lives could "be transformed by getting the right medication at the right time.”
Rep. Abdullah Hammoud, a Dearborn Democrat and epidemiologist, also supported the package, which he said "transcends any political line or partisan line."
"We’re hopeful that we will get this thing across the finish line and try and provide meaningful change," Hammoud said.
The Michigan State Medical Society said it shared the House's goal to improve health care in Michigan, but said addressing the COVID-19 pandemic, including vaccinations, needs to remain a "top priority."
"Michigan physicians believe our focus must also include increasing access to quality care through needed prior authorization reforms, the expansion of telemedicine options, reductions in health disparities among historically marginalized groups and continued support of Michigan’s physician-led model of patient care," said Dr. Bobby Mukkamala, president for the Michigan State Medical Society.
Health care companies supported efforts to lower "unsustainable costs," but argued price caps on medications such as insulin and oral chemotherapy would have unintended consequences in driving up premiums for businesses or individuals buying their own insurance plans.
The root cause of the increased cost is the list price at the manufacturer level, not markups by insurance companies, said Dominic Pallone, executive director for the Michigan Association of Health Plans, which represents 10 health insurance companies in Michigan providing coverage for more than 3 million people.
"Unless you take costs out of the system, all you’re doing is squeezing the balloon and it blows up on the premium side," Pallone said.
The package largely focuses on curbing drug costs, improving access to health care and limiting shadowy incentives for drug providers. The Senate is expected to introduce similar bills, according to House leadership, and the House itself is expected to introduce more during a second phase of the reform efforts.
The bipartisan bill package would cap insulin co-pays for a 30-day supply at $50 and require co-pay parity between oral chemotherapy and other forms of cancer treatments.
The package also would license and regulate pharmacy benefit managers, the middlemen between drug manufacturers and pharmacies. The role was created to negotiate with manufacturers and keep drug costs low, but critics say much of drug price inflation occurs among pharmacy benefit managers.
Pharmacy benefit managers were created in the 1960s and initially received a flat administrative fee, but their pay has increased, said Rep. Julie Calley, R-Portland.
"Now we’re seeing a number of complicated finance mechanisms which really benefit that middle man," Calley said. "...The bottom line is it's costing money for our Michiganders, and we want to address that.”
Wentworth expected the biggest opposition on the bills would come from pharmacy benefit managers, health insurance plans and private insurers.
"These groups have weighed in in the past," he said. "We’re probably expecting the same type of debate and conversation."
Among the regulations that would be imposed on pharmacy benefit managers are quarterly transparency reports, fee and spread pricing bans, and prompt pay requirements.
The package places limits on how much drug manufacturers can gift to physicians while attempting to sell them products.
Pharmacists and hospitals also would be required to create transparency in pricing by providing reports on service charges and differences between comparable drugs, generic and name brand. Drug manufacturers would be required to submit a report to state regulators if they increased the cost on a prescription drug.
Other changes to drug rebate policy would require an insurer to count all drug rebates from a family toward the family's max out-of-pockets costs.
Patients would be allowed a "right to shop" for cheaper prescriptions out-of-pocket costs.
The package also would allow out-of-state providers to give telehealth services to Michigan residents and expands certified registered nurse anesthetists' scope of practice.