RBC I Right now, your insurance company can require you to go through the mail to obtain your prescription medications. This past legislative session, the Colorado State Legislature failed to pass a measure that would have prohibited the requirement for mail order prescriptions.
Now, Meeker business owners Cassie McGuire and Diana Jones will have to have to wait at least a year before the state could prohibit insurers or their benefit managers from forcing pharmacy customers to use mail-order for their prescription drug refills.
The Colorado State Senate Finance Committee killed the pharmacy choice bill on a 3-2 party-line vote the last week of the session. Had House Bill 1361 become law this summer, as McGuire and Jones had hoped, health insurers would no longer be able to refuse coverage of regular prescription drug refill orders if they weren’t mail-ordered. Only some insurers are currently doing so.
The bill would have required that Colorado prescription customers be able to choose their own source of medications, thus the nickname “Pharmacy Choice.”
HB 1361 passed the House on April 14, on a 34-31 mixed-party vote. It passed the Senate State Affairs Committee on a 4-1 vote on April 25, thanks to Sen. Jerry Sonnenberg, R-Sterling, being both the vice chairman of that committee and a prime sponsor of the bill.
Senate President Bill Cadman, R-Colorado Springs, required that the bill be sent to a second committee – Senate Finance – if it passed out of State Affairs.
That means the bill had garnered 40 votes out of the 75 cast on it, but was killed by one of the three Republican members of the Senate Finance Committee since if that one person had voted for the bill, it would have made it safely out of that committee. The committee members are Republicans Chairman Tim Neville of Littleton, Vice Chairman Owen Hill of Colorado Springs and Chris Holbert of Douglas County, plus Democrats Mike Johnston of Denver and Andy Kerr of Lakewood.
On May 5, the committee listened to more than an hour of testimony on the bill. Eight witnesses signed up to speak in favor of the bill and two signed up against it. It was the first bill up in a list of 16 the committee was to deal with that day.
The legislative session ended May 11.
Prime Senate sponsor Sonnenberg introduced the bill to the committee. He was brief in the interest of time. He stressed how important it is for rural Coloradans to have access to pharmaceuticals and he said that requires the presence of local pharmacies. He acknowledged that some argue that mail-order prescriptions are less expensive and said he liked free markets, but that in general we know health care is not a free market and there is “a need for government to implement some influence in this situation.”
It is not OK, Sonnenberg argued, for government to allow large businesses to drive out small, private businesses from our communities, especially in small towns where there are no other options, by mandating what should be personal decisions.
He described incidences in his large northeastern Colorado district of folks without local pharmacies having to drive long distances. He suggested local pharmacies would be forced out if they don’t have the continuing prescription drug-refill business.
Sonnenberg chose to have the opponents of the bill testify first.
Lobbyist Patrick Boyle said he represented Express Scripts, the nation’s largest pharmacy benefits manager (PBM), serving 85 million Americans for insurance companies, government agencies, union trusts and other entities. It also administers the Tri-Star Program (military insurance) and has saved the Department of Defense more than $16 million as military retirees are obliged to use mail order, Boyle said. Express Scripts strongly opposes HB 1361, he said, because it is a pre-emptive attack on the very model of companies like his.
PBMs are third-party administrators of prescription drug programs for commercial (private) health plans, self-insured employer plans, Medicare Part D plans, the federal employees’ health program, and state government employee plans.
“The bill would prevent PBMs from providing the incentives we build into our service,” Boyle argued, adding that in supporting the bill legislators would be violating the intent of Senate Bill 27, passed earlier in the session and which directs the State Department of Health Care and Human Services to encourage the use of mail order.
Boyle said mail-order and delivery costs are a lot less for his company because it has that 85 million customer buying power. Boyle added that mail-order delivery is a lot safer, too, because there are a lot fewer dispensing errors. He told the committee members they had a choice, either vote to protect this business model or vote to bend the cost curve up for prescription drugs, even for rural areas.
Sen. Johnston expressed agreement with the goal of reducing costs, but asked if the language of the bill doesn’t seem to say a PBM couldn’t still offer incentives without mandating volume (90 day supplies) or mail-order.
Johnston could not see that the bill would create any onerous restrictions on their contracts or business model.
Boyle responded that the purchase of pharmaceuticals was very complicated and there is tremendous variability due to differences in purchasing power and other arrangements.
Dan O’Connell of the Colorado Association of Commerce and Industry (CACI), which he also referred to as the Colorado Chamber of Commerce, expressed CACI’s “strong opposition” to the bill, which he described as legislative interference with the contracting necessary for businesses, like insurance companies and their benefit managers, to sustain their business models.
“Every Colorado business should be able to choose,” he said, claiming that “the bill would dictate who a company can do business with.” O’Connell added that HB 1361 would ensure folks would be less able to participate in cost-saving plans.
Responding to a question from Sen. Johnston, O’Connell asked just how deeply into this matter of contract details the senators really wanted to get? He argued that “the Legislature should simply allow businesses that have the experience and the expertise, the freedom to set forth competitive prices and related contracts. It’s the industry experts who are in the best position to determine the thousands of policies needed.”
The pro side of the bill was very well represented by citizens and independent pharmacy owners.
Terry Newland was there with her husband from Basalt testifying about their problems, involving insulin, through mail order. She had run an experiment with her own mailbox the day before, early May in Basalt, recording temperatures of 79 degrees rising to over 104 degrees by afternoon. Insulin is supposed to be kept at 36 to 46 degrees, she said.
How can mail-order always be safer? She urged the committee to prevent these kinds of unsafe situations and further monopolization by passing the bill.
Small town pharmacy practitioners from Eads, Rocky Ford and elsewhere testified to their experiences. All disagreed with the previous testimony that the bill would increase pharmaceutical costs. They also disagreed about safety, indicating that personal contact with a local pharmacy is critical to the continuity of care and medication therapy management offered by person to person connection at pharmacies vs. the mail.
They also identified the conflict-of-interest aspects of insurers and PMBs owning their own distribution houses, so of course they want to be able to direct drug purchases there.
Another woman, present with her husband from southeast Colorado, testified how their insurance company led them to believe they would fully cover prescription purchases at their local pharmacy and then sent them letters within a month requiring volume and mail-order use, taking away their ability to choose their local drug store. She reported that they discovered their local druggist was able to beat the mail-order price for five drugs by $300 over three months. She too urged the committee to stop these monopolistic actions by passing the bill.
Tony Gagliardi of the Colorado State National Federation of Independent Businesses, representing 7,000 small business owners and speaking for the Rocky Mountain Food Industry, Colorado Retail Council, the deputy director of the American Red Cross of Colorado and the Colorado Union of Taxpayers, registered support for the bill as a cost-containment measure, stressed the importance of local pharmacies in establishing personal health relationships and adherence to treatment regimes. Richard Orf, representing the Associated Governments of Northwest Colorado, stated that AGNC supports the bill, and he mentioned the importance of stand-alone pharmacies like Meeker’s.
The bill’s second prime sponsor in the Senate, Linda Newell, D-Littleton, summed up the reasons to support the bill by addressing the three primary issues: industry contracts; cost-containment; and safety. The important contract issue is that consumers be allowed to access prescription drugs where and how they choose, she said.
The argument that costs will rise if people don’t take advantage of volume and mail-order supply is a myth, Newell said, adding that the 27 other states that have passed this legislation have not seen cost increases. And concerns about safety, she said, definitely come down on not forcing mail delivery of drugs.
It was apparent the bill would die on a party-line vote, but Sen. Hill indicated he wanted to try to find compromise amendments so the committee agreed to lay the bill over to the end of their agenda, which came the next morning.
At that time, Hill reported he had not been able to find a fix, but that he needed to make the issue a priority for next year. A motion to move the bill to the Senate Floor failed 2-3 on the party-line vote, which was reversed to postpone the bill indefinitely.