Does Colorado want to be the nation’s guinea pig to test the ideas of an out-of-state billionaire who thinks that the way to bring down the cost of certain prescription drugs is for states to build a bureaucracy and control those prices?
Senate Bill 175 would have Colorado do just that.
The legislation calls for the creation of a state-run Prescription Drug Affordability Board and a state bureaucracy that would set “upper payment limits” on an as-yet unnamed list of breakthrough, life-saving medicines. Upper payment limits means the maximum amount that insurance companies, hospitals, pharmacies and others would have to pay pharmaceutical companies to purchase the medications.
Make no mistake: This is a price-control bill.
There are many reasons to oppose this legislation. First, experts have testified before the Colorado legislature that state involvement would have the unintended consequence of dangerously compromising access to these critical treatments in Colorado.
Dr. Kelly Greene, a critical care pulmonologist at Littleton Adventist Hospital, projected that outcome in her testimony before the state Senate Health and Human Services Committee. So did Dr. Alan Miller, head of the Rocky Mountain Oncology Society, Dr. Ashley Espinoza of the Colorado Pharmacists Society, and Angie Howes of the Colorado Retail Council. Note that these aren’t warnings from pharmaceutical companies.
Second, the legislation would do almost nothing to lower the cost of medications for the majority of prescriptions Coloradans use on a regular basis. For most Coloradans, the price they pay for their medicines is dictated by their insurance company. This legislation doesn’t include a regulation on the amount insurance companies can charge patients.
The legislation specifically targets high-end medications — including those with an “initial wholesale acquisition cost of thirty thousand dollars or more for a twelve-month supply.” In other words, the bill is not aimed at the cost of routine prescriptions, but for medications treating serious diseases, such as rare cancers.
And third, it would build an expensive new state bureaucracy run by a board of five political appointees.
Coloradans should also know that this idea of rigid state control over what doctors, hospitals and other providers can pay for life-saving medicines is not a Colorado solution being applied to a Colorado problem.
Instead, key elements of the bill were pulled from template “model legislation” developed by the National Academy for State Health Policy (NASHP). This national organization is dispatching this model legislation and its people to states across the country in hopes to pass it.
It doesn’t stop there. A witness brought in to testify on the intricacies of the bill, Jane Horvath, is also funded by Arnold Ventures. Horvath helped write the model legislation and has been seen testifying in other states studying similar legislation.
A Colorado organization backing the bill, the Colorado Consumer Health Initiative, lists the Action Now Initiative among its top supporters in its 2019 annual report. The Action Now Initiative was founded by John and his wife, Laura Arnold.
The measure would also give a political board the ultimate authority to set upper payment limits without oversight by the legislature. While the board would be required to report to the governor and legislature each year “summarizing its activities,” the bill gives the governor and legislature no power over the proposed board.
One state, Maryland, has passed legislation that allows its prescription drug affordability board to set an upper payment limit — but only after approval by the legislature or the governor and attorney general. In Maryland, this board’s purview is limited to Medicaid and public payors.
There are a variety of efforts in other states to study initiatives along these lines and/or to set “targets” for Medicaid and/or public payor spending only. But nothing is as sweeping as called for here in Colorado.
And where does it stop? If the state wins the ability to put price caps on prescription medications, what industry will be next? In my view, governments capping the price for medicines violates the core of America’s free-market principles.
It’s no wonder a wide range of voices have come out in opposition to this idea — doctors, hospitals, pharmacists, and patients have all voiced concern.
Of course, access to medicines for patients fighting life-changing and life-threatening diseases is the paramount issue.
I don’t know about you, but I’m tired of Colorado being the guinea pig for every “great new idea.” Our tax dollars, yours and mine, pay for each of those experiments. The proposal in Colorado would cost nearly $800,000 to get off the ground in the first year, according to the legislature’s fiscal note.
This proposed legislation is a poor fit here because Colorado shouldn’t be a test kitchen for a non-Coloradan’s political agenda.
Joni Inman is co-chair of Front Range PharmaLogic, a group supporting an innovative biopharmaceutical industry that focuses on access to life-saving medicines, safety and patient needs.
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