Assemblymember Jim Wood’s Bills to Fight Escalating Prescription Drug Prices Approved by Senate Health Committee
SACRAMENTO—Today, two bills authored by Assemblymember Jim Wood (D-Healdsburg) to fight escalating prescription drug costs received approval by the Senate Health Committee – one step closer to becoming law and helping consumers.
AB 265 is a bill to prohibit the use of drug manufacturer coupons for brand name drugs for which there is a less expensive and therapeutically equivalent generic version. AB 315 would begin regulating pharmacy benefit managers (PBMs) – middlemen negotiators between drug companies and health plans – which are currently unregulated. AB 315 passed with bipartisan support.
“Runaway drug prices are one of the leading causes of increasing health care costs and ultimately premium costs, and there is no one solution,” said Wood. “These bills are the result of spending the past several years peeling back the onion on this complex issue and listening to all parties,” added Wood, “and these bills can help patients receive the medications they need but not pay more than they should, both in prescriptions, and ultimately, their health care premiums.”
In recent years, there has been a proliferation of prescription coupons and discounts offered by the manufacturers of prescription drugs to encourage the use of their products which are often expensive. In the short term, it is true that these coupons and discounts can reduce a patient’s out-of-pocket costs for a prescription drug, but in the long term, this practice increases the cost of providing coverage for health and prescription benefits, which in turn results in higher health care premium costs for all consumers.
PBMs were initially formed over 40 years ago to help health plans, self-insured employers and government payers to assist insurers and employers in managing prescription drug benefit programs, acting as third party administrators.
Today, it is estimated that the three largest PBMs manage prescription drug coverage to more than 180 million Americans or roughly 78 percent of Americans. In 2014, the combined revenues of the three largest PBM’s exceeded $270 billion. “With that kind of revenue and no oversight, that should be a concern to all of us,” said Wood. “If the PBMs are, in fact, negotiating the best pricing and doing right by consumers, they should have no concern with us ‘looking under the hood’.”
Assemblymember Jim Wood (D- Healdsburg) represents the 2nd Assembly District, which includes all of Del Norte, Trinity, Humboldt and Mendocino counties, plus northern and coastal Sonoma County, including the northern half of Santa Rosa.