Bill Aims to Lower Copays for Live-Saving Drugs

The average cost of a year’s supply of prescription drugs has doubled since 2007 to more than $11,000. That accounts for roughly three quarters of Social Security income. The AARP study indicates the hikes are driven solely by drug makers forcing some patients to choose between buying drugs or dying. A bill in the state Assembly would cap prescription copays for a third of insured residents. NJTV News Anchor Mary Alice Williams recently spoke with its sponsor Assemblyman Daniel Benson.

Williams: Outline this bill for me. How much would the cap be on a copay?

Benson: A2337 would set caps for silver and gold and platinum plans at $100 and $200 per month, or a 30-day supply for bronze plans.

Williams: The bill would apply to all prescription drugs, but from what I understand it’s aimed at controlling costs and drugs for which there’s no generic equivalent, like cancer, AIDS or MS drugs, right?

Benson: Yes, and including lymphoma, leukemia and other types of cancers. What we’re seeing is a disturbing trend in a lot of insurance programs where they’re taking these drugs that have no generics, that really the patient has no ability to control the costs, and putting them on a tier that not only has the copay that we’re all familiar with, but also putting a coinsurance which means you’re paying a percentage of that drug, which could be thousands of dollars every month.

Williams: Why are pharmas targeting these life or death drugs? Is it because they figure patients will pay anything?

Benson: No, I think actually there’s one of two things happening. You’re seeing some insurance plans doing this because they hope that by pricing them so high people simply choose not to take the drugs and thereby reducing the costs to the plan. But I think secondly they’re trying to send price signals to the pharmaceutical manufacturers saying, “Well if you want this drug to be covered in our plan and to be taken, you on that side have to lower the price.” Unfortunately, patients are the ones caught in the middle and that’s why my legislation would restore kind of sanity to what those prices are. And again, $100, $200 still isn’t cheap, but at least it’s more reasonable than what most patients are finding at the pharmacy.

Williams: Who makes up the difference between the cost of the drug and the capped price? Is it the health insurance company?

Benson: It’s the same thing that happens right now when anyone pays for a plan or a generic drug. The whole insurance plan that risk is pulled and again that’s what insurance is for, it to make sure that when you go for an expensive procedure or to pay for a drug that you know it’s going to be covered and affordable.

Williams: Have any other states implemented similar copay capping like this?

Benson: There’s a number of states that have looked at this, Vermont and a couple that have tried to adopt and some other states that are looking at this as well. But I think ours is a little unique and it’s targeted towards New Jersey’s market again recognizing our aging population and again these key populations where they need these specialty drugs, both for life affirming and life saving. I think that’s why it’s so important to make sure that we have this to be affordable and studies have shown that copays at $100 level, once it goes above that people stop taking their drugs and we all know when you stop taking your drugs it means you’re going to be in the hospital more, be sicker and again this can shorten a lot of people’s lifetimes.

Williams: The Pharmacy Care Management Association says that this type of cap does not address the underlying problem and that insurance companies will simply increase premium costs. Do you agree?

Benson: Actually there’s a great study, a Milliman study by the Lymphoma and Leukemia Society that shows that actually just like with all drugs, because this is a very small portion of folks on a plan, it actually doesn’t raise premiums very much. In fact it’s less than 1 percent and that study also showed that there’s other things that you can do with a plan to even reduce that further so that there is no impact again to the premiums.

Williams: What about the pharmaceutical companies, are there no regulations that restrict them or prevent them from jacking up prices arbitrarily?

Benson: I think we’ve seen in the news what’s happening with hedge funds that are actually buying up these small generic firms and trying to jack up prices 500 percent. We’ve seen the stories about Pharma Bro and that’s actually being investigated. This actually has nothing to do with those types of drugs. These are the new drugs that are on the market. They’re expensive because they are new, there’s been a lot of research and R&D involved and we want to make sure that these drugs get out to their patients because of them being life saving and life affirming and then that feedback from their usage will hopefully generate even better drugs. You saw the president announce again a billion dollars for cancer research and also making sure that there’s more money for research out there. All that kind of comes back to this and we want to make sure that people can get drugs in the hands that they need for their lives.