Utah health interim committee decides interim themes and discusses solutions for lowering drug prices

Interim talks in the Utah Legislature echo similar unresolved themes as the recently ended legislative session, including lowering the cost of health care while improving quality, expanding behavioral health services, and expanding the safety net. 

The Health and Human Services Interim Committee met for the first time on Wednesday to discuss the interim study items, future legislation to lower prescription drug costs, and solutions to regulate pharmacy benefit managers (PBMs). 

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On April 20th, the chairs of the health interim committee—Sen. Michael Kennedy (R-Alpine) and Rep. Merrill Nelson (R-Grantsville)—released study items for the health committee to tackle during the interim. 

According to the study items, the committee plans to work on local health department effectiveness, health care reform to lower costs, and improving the quality of care in the behavioral health space. The items also include working to consider recommendations of a workgroup on the regulation of medical cannabis, staffing issues in long-term care facilities, and extending postpartum Medicaid coverage. 

The committee voted to adopt the above study items for the rest of the interim. 

Daniel Liljenquist, Senior Vice President and Chief Strategy Officer for Intermountain Healthcare and Board Chair of Civica Rx, highlighted Civica’s work to create cheaper biosimilar drugs that have the same impact as name brand insulin drugs. 

According to a study conducted by Utah’s Insurance Department, insulin prices in the state rose 14% annually between 2012 and 2018. It is because of this rise that Civica is manufacturing biosimilars, which will result in an 85-90% cost reduction for insulin. 

Liljenquist recommends that the legislature let Civica enter into their pharmacy market and protect them from “retaliation” from bigger pharmacy manufacturers. He also said the state could contract with Civica—like the state of California has—to lower prices for Medicaid members and government employees. 

Chet Loftis, Managing Director of Public Employee Health Plans (PEHP) Health and Benefits, gave an update on PEHP’s insulin and EpiPen programs to lower the out-of-pocket cost for the patient. According to Loftis, the state pre-pays the represented rebate amount to the PBM so that the patient does not have to. Then once the manufacturer reimburses the plan for the rebate, the state is reimbursed that rebate amount. 

“The retail price is $350,” Loftis said. “Afterwards, the manufacturer is going to pay a rebate which equals the discount. The amount of that discount is $255. What we do is we give the member the benefit by paying that first on behalf of the state so that the price that they pay is $95. So, the state pre-funds it. And then when the money comes from the manufacturer, we use that to reimburse the state. So people in Utah can get insulin at $95 rather than $350.”

Loftis recommends expansion of this system to lower costs of drugs for patients and lowering the amount of funds PBMs receive from rebates. 

Other presenters echoed the concern about the lack of transparency from PBMs. Michelle McOmber, CEO at Utah Medical Association, said we need to “pull back the curtain” on PBMs because they increase costs and negatively impact patient health. She said PBMs have been given too much power, from creating formularies to making coverage decisions for health plans. 

Eric Cannon, Chief Pharmacy Officer at SelectHealth and General Manager at Scripius, said they created their own PBM due to lack of transparency. 

“We found there was so little transparency because we quite frankly could not account for the dollars that we were spending,” Cannon Said. “We knew based on information from pharmacies that we’re paying a price or PBM was charging us a price far above what the medication actually costs.”

Cannon recommended that the legislature find a solution to drive transparency and further regulate what PBMs can do and what they have to report to health plans and the state.