SPRINGFIELD – Democrats in the Illinois House unveiled a package of bills Wednesday they say would help control the spiraling cost of prescription drugs.
Republicans, however, are arguing that the entire issue of prescription drug costs is beyond the scope of state government, and that some of the Democrats’ proposals could actually end up costing taxpayers and making life-saving medications less available to people in the state.
The package of bills is largely based on recommendations from Families USA, a national consumer health advocacy group based in Washington, D.C., which has been working with lawmakers to develop the bills.
Those bills call for regulating some drug prices in much the same way the state regulates utility rates; taxing drug price increases that exceed the rate of inflation; requiring drug companies to disclose more information about their prices; and creating a mechanism for the state to become a licensed wholesaler of cheaper imported drugs from Canada.
“People in Illinois are being crushed by the high cost of essential medicines,” Rep. Will Guzzardi, a Chicago Democrat and sponsor of one of the bills, said during a news conference announcing the bills.
Guzzardi chairs the House Prescription Drug Affordability and Accessibility Committee, which had an informational hearing earlier in the day on the subject of prescription drug pricing and how it works.
The only person to testify at that hearing was Families USA’s Justin Mendoza, who heads that organization’s “state partnerships” program.
Mendoza laid most of the blame for spiraling prices on pharmaceutical manufacturers, who are granted long-term patents on new drugs that can prevent lower-cost generic drugs from entering the market for years; and “pharmacy benefit managers,” or PBM’s, who act as a kind of middleman between manufacturers and insurers to negotiate prices and devise “formularies” that determine which drugs the insurers will pay for, and under what circumstances.
He also said the federal government, and federal taxpayers, have a role to play because they fund much of the research that goes in to developing new drugs, even though, he argued, they don’t necessarily see a return on that investment once the drugs hit the market under a patent owned by a pharmaceutical company.
“Illinois has an opportunity to act on all these pieces, and to act on drug prices with substantial reforms that will make changes in people’s lives today and help direct the conversation forward all over the country,” Mendoza told the committee.
Republicans on the panel, however, said they were skeptical the state of Illinois had the ability to control what happen in a national, or even international pharmaceutical market.
“These are issues that far surpass the scope and jurisdiction of the state of Illinois,” said Rep. Tom Demmer of Dixon, the Republican spokesman on the committee. “And for us to take the perspective and say we’re going to come in as the Illinois Legislature and tell a manufacturer what they can and can’t charge, I think is an impossible distortion of markets. And what’s going to end up happening is, people won’t sell in Illinois.”
Meanwhile, Rep. Deanne Mazzochi, an Elmhurst Republican, argued that regulating prices in the private sector could end up costing taxpayers in the form of higher prices in Medicare and Medicaid. That’s because those programs buy drugs at below wholesale prices, and drug companies make up the difference by charging private insurance plans more.
“If you set a ceiling on reimbursement on the private side, then the net effect of that is that prices for Medicare and Medicaid are going to have to go up to compensate,” she said. “Because if you can’t charge higher prices on the private-sector side, then you’re going to have to boost up everything on the Medicaid-Medicare side. So it kind of winds up being a bit of a wash.”
Hearings on the prescription drug market in Illinois will continue Friday with a joint meeting in Chicago of Guzzardi’s prescription drug committee and the House Insurance Committee.
Tiffany Haverly, a spokeswoman for the Pharmaceutical Research and Manuracturers Association, or PhRMA, issued a statement late Wednesday criticizing the proposals.
“Patients need bold reforms, not more of the same failed policies discussed today like regressive tax penalties or dangerous importation schemes that could limit patient access and compromise the safety of medicines prescribed in the U.S,” Haverly said.
The legislation pending in the House includes:
- House Bill 2880, by Guzzardi, imposing a tax on some drug price increases that exceed the rate of inflation.
- House Bill 3493, by Guzzardi, establishing a state board to regulate drug prices in a way similar to utility rate regulation through the Illinois Commerce Commission.
- House Bill 156, by Rep. Mary Flowers (D-Chicago) requiring drug companies to disclose information about their pricing systems, including how much they spend on marketing.
- And House Bill 1441, by Rep. Anna Moeller (D-Elgin) allowing the state to be a licensed wholesaler of imported drugs from Canada.
