Editorial Reforming drug prices may start in Conn.
State Comptroller Kevin Lembo can sound methodical in his strategy for reducing the cost of prescription medications.
“They negotiate pricing with the pharmaceutical company that manufactures the drug and they negotiate pricing with the pharmacy that dispenses the drug. They’re in the middle of all that.”
He can also sound a cop in a 1970s melodrama trying to bust up a drug ring in the streets, diagnosing the problem as “They buy a drug for X, they sell it for Y, I reimburse them for part of that, and they keep the difference.”
It will take both attitudes to bring cheaper prices to the people who get prescriptions from doctors but have less negotiating power than someone buying illicit street drugs.
Even scalpers hawking tickets at concerts have more transparency about profit margins, as original prices are printed on tickets.
Lembo’s office is in the process of exposing profit margins hidden by so-called pharmacy benefit managers. He refers to the repugnant bookkeeping tactic as “hidden wealth exchanges.”
His methodical plan is to do so through his office’s request for proposal for Connecticut’s new pharmacy benefits agreement.
But the street fight version is that he is trying to bust up the drug monopoly by fighting money with money.
Lembo’s office is too large a customer to be ignored, as they spend nearly $2 billion annually on health care.
That’s just Connecticut, and Lembo claims his office is the first to take the approach of demanding an RFP that ensures the middleman is not pocketing extra cash.
If the change saves coin for consumers, expect other states to follow Connecticut’s lead. But Lembo — and we — are hopeful it can be even more influential by convincing other employers to call for the same mandates.
“It’s the first of its kind in the nation. We are pushing this in a very serious way.” Lembo said.
The state is trying to protect consumers in other ways. First-time prescriptions would be limited to 30-day fills, a response to data that suggests less than one-third of 90-day first-time fills are not refilled.
The initiative has the potential to reform the industry quickly but is the result of Lembo’s patient resolve as well as legislation crafted to make drug companies more transparent about their pricing. The measure sailed through the General Assembly during the most recent session.
The state’s current pharmacy benefit management company is CVS Caremark. The new contractor is not expected to be chosen until the end of February. Once the new system starts, Lembo — along with the state’s 200,000 employees and their dependents — can start following the money.
Connecticut’s future pharmacy benefit manager will also have to provide access for prescribers to compare the actual cost of medications with alternatives, turning state employees into their own watchdogs.
Lembo is no doctor but may have found a cure for this ailing system.