California lawmakers are lining up in support of a bill that would require health plans to provide information about patient-assistance programs for expensive prescription drugs to enrollees who drop or lose their coverage.
The programs are funded by pharmaceutical companies and offer people financial aid for brand-name drugs. They provide the aid to both the uninsured and to people with health coverage, particularly those who are struggling to afford their share of expensive specialty medications.
The legislation, supported by the pharmaceutical industry, would require health plans to alert departing customers about the availability of these programs. Health plans would also be required to inform consumers about other low-cost or free health coverage, such as Medi-Cal, when leaving the plans.
Some health policy experts have criticized these drug company-funded efforts in recent years saying they contribute to the rising cost of prescription drugs. They argue that drugmakers subsidize medications for patients to expand their market for brand-name medications that can cost tens of thousands of dollars annually per patient.
Citing those cost concerns, health insurers in California are fighting the bill, and some consumer advocates have questioned whether insurers should be advertising this assistance to the public.
“We need to take another look to see whether assistance programs are an actual net benefit or a net burden in terms of what they do to overall pricing,” said Anthony Wright, executive director of Health Access, which has taken a neutral position on the legislation.
“The drug companies are giving it out for free to some folks, but then once people are dependent on the drug, employers and insurers have to figure out how to pay for it over a long period of time,” Wright said.
The bill has passed the state Assembly and is expected to be taken up by the Senate health committee in the coming weeks.
The debate comes just as the high cost of specialty drugs and sharp price hikes for some older medications have drawn intense scrutiny on the presidential campaign trail and in Congress.
The patient assistance legislation in California is sponsored by Assemblyman Jim Wood (D-Healdsburg), chairman of the Assembly health committee and a dentist in the Northern California district he represents.
“One of the problems people have when they have a lapse in insurance coverage is that they have to make difficult decisions,” Wood said. “We’re just trying to make people aware that there are programs out there with free or reduced prescription drug prices while they’re between coverage. They may not know these options exist.”
Wood’s reelection campaign has received $31,600 in contributions from the pharmaceutical industry during 2015 and so far this year, according to state records. Many of the industry’s biggest names have each donated several thousand dollars to him, including Amgen, Gilead Sciences and Pfizer.
The drug industry’s main trade group, Pharmaceutical Research and Manufacturers of America, has contributed $4,800 to him. At the same time, health insurers, hospital groups and physicians also have donated to Wood’s campaign committee.
Wood said, “People receive contributions from a wide variety of sources. People who know me well know I’m thoughtful and reflective and that this is not an issue.”
The California Association of Health Plans, the health insurance trade group, is trying to defeat the bill, arguing that promoting these programs will drive up overall medical costs for individuals and employers.
“Legislation like this just contributes to the problem by steering patients away from effective generic equivalents to costly brand-name drugs,” said Nicole Evans, a spokeswoman for the group.
“Government subsidies, out-of-pocket limits and guaranteed access to health coverage provide access and protection to consumers. The bill has the effect of increasing demand while allowing drug companies to raise prices, plain and simple.”
Wood rejected those arguments against the bill, saying it is about keeping people healthy over the long term.
“There’s nothing that says that patients coming back to [health insurance] coverage are going to have branded prescriptions,” he said.
Last month, the California Life Sciences Association, which represents drug companies as well as device makers and research organizations, praised Wood and other legislators for supporting the measure.
“An increased awareness of patient assistance programs will help us continue to close the gap for the uninsured, and help Californians maintain access to lifesaving medications through tough times,” said Sara Radcliffe, president and chief executive officer of the life sciences group.