In this past Colorado legislative session, A Patients’ Choice of Pharmacies bill was introduced. The pharmacy organizations of Colorado representing independent and retail pharmacists were in support of this bill. Opposition to the bill included the usual suspects – pharmacy benefit managers, insurance companies and health plans, and state chambers of commerce. Even with these formidable opponents, this bill made it all the way through the House before it died in the Senate Finance committee. I have been approached by individuals asking why this bill died, either for the purposes of curiosity or to see what lessons can be learned as attempts are made to pass a similar bill in their state legislature.

Unlike many bills that are 10-20 pages long, this bill, HB16-1361, was only 2 pages long and did 3 things. A PBM could not:

  • Restrict a patient from selecting their choice of pharmacy
  • Impose a different payment fee or any other cost on the patient based on their selection of pharmacy
  • Restrict access to the pharmacy by denying the pharmacy’s participation in the network if pharmacy is willing to accept all the terms and conditions

The sponsors did an excellent job explaining why this bill should pass and the proponents of the bill shared their stories and experiences to create a convincing argument to support this bill. Some of the pharmacists and consumers who testified traveled hundreds of miles to testify. It was one vote that killed this bill in committee, for political reasons (big surprise).

This blog post will be the first of two. One blog post will include arguments  for and the other presenting arguments against. It is common that during committee testimony, the sponsors of the bill are asked if they would like to have the opponents or the proponents go first. Usually testimony from the opponents is presented first, so it shall be here.

As I share the arguments presented by opponents of the bill, you may find your blood pressure rising and even wanting to shout “liar” (or at least “half truth”). As you read some of the quotes from the opposition, picture yourself in the committee hearing, listening to this and formulating how you will respond. In the next blog post I will share with you what was said and done to address some of the statements made by the opposition and how it was possible to successfully pass this bill through the two committees and the full house of representatives

Four main tactics were used by the opposition:

  1. Bill is not about patient choice
  2. Mail order is good
  3. PBMS are good and
  4. Bill will increase drug costs

This bill is not about patient choice.

The two largest PBMs include more than 95% of the pharmacies in Colorado. Only 9 out of 104 independent pharmacies are not in our network and only 1 is in rural Colorado.

I believe this bill is supported by retail pharmacies because they feel threatened by the use of direct delivery by mail. People will fall out of the habit of going to the drug store. They will demand mail order.

Purpose of this bill is to drive retail traffic into drug stores.

The insured is not prevented from going to the pharmacy of their choice. They just may have to pay a larger co-pay.

This bill fails to improve access, undercuts patient safety and increases drug costs to consumers.

This bill is not about networks. This bill is anti-mail order.

This bill dictates who health insurers do business with and what the terms and conditions of the those business agreements will be. This runs directly contrary to the freedom of contract.

Studies show Any Willing Provider (AWP) legislation is more an independent pharmacist protection initiative not patient protection.

Mail Order is Good

PBMS have the purchasing power of a company that serves 85 million Americans We can buy drugs cheaper.

OIG report of 2013 Department of Defense analyzing the PBM administration of TriCare program – Use of mail saved Department of Defense 16.7%.

Mail order pharmacies are safer and make fewer dispensing errors. Accuracy rate is 99.97% in mail order pharmacies. 98.5% in retail pharmacy. This is because “we do not administer flu shots, sell magazines, soda, and non-prescription drugs.”

Better adherence/compliance if prescriptions delivered by mail.

Mail order offers a 24/7 hotline.

Retail pharmacies are threatened by the use of mail.

Bill seeking to increase the use of mail order pharmacy benefits among Colorado’s Medicaid population mail order programs is projected to save the state 2 Million dollars once the program is fully implemented.

Cost saving impact undermined by restricting access to mail order benefits.

PBMs are good

It is the PBM customer (employer) and not the PBM that decides which pharmacies are in the network and if mail order pharmacies are used.

PBM customers prefer narrower and restricted networks if they are looking to get a deeper discount.

Express Scripts had only a 2.8% profit. That is an extremely small profit margin. “We are in the business of saving money in the provision of pharmaceuticals to consumers and not in the business of gouging them.”

Google any industry you like you will find their profit margin higher than the PBMs.

PBMS s create substantial health care savings through negotiating rebates with manufacturers and decreased costs from pharmacies.

This bill will increase drug costs

Pharmacy network will offer a better price because they know it will deliver a certain amount of retail traffic to their stores. And this bill is about retail traffic. If that traffic is not realized because the network is destroyed and we are obligated to provide consumers the choice of going to any pharmacy. Next year the price of the benefit will go up because the retail store did not realize the increased traffic and that ultimately over time drives up prices.

Health insurers will lose their private right of contract. This intrusion can result in increased costs of health care premiums.

According to the 2012 study University of Pennsylvania Law School “We find statistically significant increase in expenditures because of AWP (Any Willing Provider) laws. This suggests that AWP laws are a poor idea from a public policy perspective.

Bill limits the ability to form strategic business partnerships which will increase costs.

Studies have found substantial savings associated with preferred pharmacies and mail order pharmacies.

Heard enough? How would you respond? Look to the next post to learn how we responded.

Say What? What Opponents Say about Patient Choice

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