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“It does seem rather ironic that on insulin day we have a bunch of donuts here,” said Chairman Shott when opening the meeting of House Judiciary with only one bill on the agenda, an insulin bill.
HB 4543 adds a new article relating to insurance coverage for diabetics. In an unusual meeting order, Chairman Shott asked for expert testimony prior to the counsel’s explanation of the bill. PEIA Director Ted Cheatham provided information at length to help the committee understand the enigma wrapped in a riddle that is drug pricing. He explained that the manufacturer sets the drug price and we are one of only two countries that allows this. The price is generally based on what the market will bear and not what the drug costs to make. He gave hypothetical examples of generic pricing, brand drug pricing, and the specialty or “high end” drug pricing. PEIA works with a Pharmacy Benefit Manager (PBM) to negotiate maximum allowable pricing on behalf of PEIA and this can change daily. “It’s terrible,” said Cheatham. For a brand drug, the manufacturer can set the price regardless of what it costs to make. Brand drug prices can also change daily. Rebates are used to negotiate costs with the PBM, and Cheatham once again opined that “rebates are terrible.” The specialty (high end) drug pricing is “a game that won’t stop giving,” Cheatham pointed to a Hep-C drug that is priced at $64,000 as an example.
The purpose of the bill is to lock-in a $25 co-pay for insulin. Asked if the bill would accomplish that purpose, Cheatham responded, “If you need insulin, it will be $25 in all categories it comes in.” PEIA is in the process of preparing a fiscal note for the bill and Cheatham reminded them that the ultimate cost is born by two parties – the insurer and the member. There are only two major brands of insulin and manufacturers can make a slight change and extend the patent, keeping it from being available as a generic. “We are addressing a problem that Congress won’t address,” noted Cheatham. He also offered his personal opinion, “This (insulin) is a medical necessity. It is no different than water and electricity. We need to regulate this like a utility.”
At least 15% of PEIA members are diabetic and probably that many or more are undiagnosed, according to Cheatham.
Deputy Insurance Commissioner Hunter discussed commercial insurance in WV, noting that it’s a very small market here. Referring to a pie chart she carries with her, she pointed out that there are only 197,000 people in WV covered by private health insurance. Medicaid covers about 500,000; Medicare accounts for 387,000; about 145,000 are uninsured; CHIP covers 33,000; and ERISA plans account for 306,000. The Insurance Commission regulates only the private insurance. “The bill will have the most effect for people with private insurance,” Hunter said. A pharmacist and pharmacy district manager for Walgreen told the committee that the bill will be a net neutral for pharmacies and will provide the benefit of improving access to health care.
Counsel then explained the bill, which came from recommendations from the Coalition for Diabetic Management that was created in 2017. Under the bill as introduced, all insurers including PEIA are to provide coverage for insulin at a cost not to exceed $25 for a 30 day supply. There was a total of eight amendments proposed and adopted. Chairman Shott relinquished his chair to the vice-chair so he could speak to amendments which included clean-up of language, an appeals process, and a requirement to cover at least one insulin in seven specified categories. The bill passed as amended. Delegate Fleischauer, lead sponsor, thanked the committee for the amount of time spent on this one bill, noting that people are spending enormous amounts of money above & beyond their insurance premiums. Chairman Shott closed the meeting by stating, “Very few bills that we deal with have life or death consequences, but this one does.” |
