Lawmakers advance bill aimed at lowering drug costs

INDIANAPOLIS – Indiana lawmakers are moving forward with a bill aimed at reducing prescription drug costs.

Senate Bill 8 is one of the Senate Republicans’ top priorities this session as they focus on efforts to make health care more affordable.

The bill, authored by State Sen. Ed Charbonneau (R-Valparaiso), focuses on pharmacy benefit managers, or PBMs, which process prescription drug claims. They’re the middlemen who negotiate prices with drug manufacturers.

The bill would require pharmacy benefit managers to pass on at least 85 percent of their cost savings from rebates and discounts to patients.

“A patient is going to save hundreds of dollars,” said George Huntley, CEO of the Diabetes Patient Advocacy Coalition, who supports the bill.

“The average rebate’s half the price of the drug,” he added. “So if you are not protected by this, you’re literally paying double what your insurance plan is paying for that same drug.”

Huntley said he believes if the proposal becomes law, it would lead to a big drop in many of the drug prices Hoosiers pay.

“A vial of insulin is going to list at about $270,” Huntley explained. “The net price of insulin should be closer to $70.”

But opponents argue it’s not that simple.

Joey Fox, a consultant who testified against the bill on behalf of CareSource and the Pharmaceutical Care Management Association, the national trade group for PBMs, told lawmakers he believes drug makers need to be part of the solution.

“The best way to lower the price of drugs is to lower the price of drugs,” Fox said during his testimony. “If the price weren’t so high, my clients wouldn’t have to be negotiating discounts.”

State Sen. Liz Brown (R-Fort Wayne), the only lawmaker to vote against the proposal in committee, said she’s concerned the bill won’t have much of an impact.

She argues drug manufacturers should also provide more transparency when it comes to pricing.

“We’re only picking one piece of the problem, and I’m not really sure that’s really going to make a difference in the end,” Brown said.

The Senate health and provider services committee approved the bill Wednesday with a 10-1 vote. It now heads to the Senate floor.