For Immediate Release
Sen. Hwang: WSJ analysis highlights how
insurers are charging thousands for “cheap” generic drugs
Says new GOP-backed CT law calling for PBMs study
must be expedited
“We have an opportunity to reduce drug costs
significantly for consumers.”
Sen. Tony Hwang, the Ranking Senator on the Insurance and Real Estate Committee and the former Co-Ranking Leader of the legislature’s Public Health Committee, today highlighted a recent Wall Street Journal in-depth analysis which reveals how health insurers mark up prices of generic drugs for cancer, multiple sclerosis and other complicated diseases. Across a selection of specialty generic drugs, the Journal found that insurers’ prices were at least 24 times higher on average than roughly what the medicines’ manufacturers charge.
The analysis, Sen. Hwang said, highlights the importance of a new state law proposed by Republicans which calls for a study of pharmacy benefits managers’ (PBMs) practices of prescription drug distribution practices.
“Health care is unaffordable,” Sen. Hwang said. “Year after year, Connecticut families and businesses are burdened with unsustainable, near-double-digit health insurance rate hikes. Prescription drug costs are rising by double digits as well. Now, we see this report which highlights a clear, systemic, conflict of interest. Essentially, the same entity that is theoretically working on behalf of consumers to reduce drug costs also has an incentive to maximize its revenues from dispensing. For example, a generic cancer drug can be bought today for as little as $55 a month. But many patients’ insurance plans are paying more than 100 times that. Why? That’s a big problem, that is outrageous, and that’s why it’s vital for us to get moving on the PBM study. The Wall Street Journal investigation is ‘Exhibit A’ as to why we must expedite this process.”
Sen. Hwang co-sponsored the amendment which called for the PBM study. The study includes spread pricing arrangements, manufacturing rebates and transparency, fees charged, financial incentives for adding drugs to health plan formularies, and an evaluation of prescription drug distribution practices. The legislation was signed on June 27 and took effect immediately.
“Bringing down health care costs and curbing the cost of prescription drugs must be our top priorities,” Sen. Hwang said. “Family budgets are breaking, and people are living paycheck to paycheck as they have difficulty making hard choices on paying for healthcare instead of rent, mortgage and groceries. That’s why the Journal report is so important. We have an opportunity to learn from it and to reduce prescription drug costs significantly for consumers. There is no time to waste.”
The Journal report, “Generic Drugs Should Be Cheap, but Insurers Are Charging Thousands of Dollars for Them” can be viewed here.
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