Bioscience Policy Debate Shifts at State Legislature
As is always the case, there was much misinformation, hyperbole, and outright disinformation about the bioscience industry shared at public hearings and in committee debate, but a shift in public policy debate was evident in the 2023 Connecticut General Assembly session.
There was a little more recognition that the cost of healthcare is about more than just the cost of drugs. There’s healthcare cost inflation to be sure, but it is driven by many factors apart from drugs.
There wasn’t outright acknowledgement that medicines constitute, at most, only 15% of the healthcare equation, but there was exploration of the role of other players in healthcare delivery.
There were a record number of biopharma-related bills brought before the General Assembly during the 2023 session—99—but only nine made it to the finish line, passed by both the House and Senate.
Much of the biopharma legislation that passed was arguably unnecessary and more for political/rhetorical value (bills related to obesity, endometriosis and HIV being notable exceptions).
It is unfortunate that several tax measures affecting research and development weren’t passed.
They would have been valuable to the industry and the state’s economic development efforts to attract emerging biotechs and retain established biopharma companies.
Lamont Administration’s Bill
The key biopharma bill of 2023 was the Lamont administration’s proposal, HB 6669, which passed the Senate June 7 after winning House approval the previous night.
The bill, as amended after much behind the scenes—as well as public—debate featured six main biopharma components.
First, it empowers the state Comptroller to establish a “drug discount card program,” similar to other state programs like ArrayRX.
The comptroller may work with other states to “pool prescription drug purchasing power.”
Whether such a state program will achieve efficiencies and savings that are an improvement over non-governmental programs like GoodRx and the patient discount/coupon programs established by biopharmaceutical companies remains to be seen.
Patent Expiration Notification
Second, the Department of Consumer Protection is to make recommendations to the General Assembly on establishing an outreach and education program to inform physicians when drug patents will expire and make a drug available for generic formulation.
Like other provisions of the governor’s bill, this appears to be a solution in search of a problem.
Healthcare professionals are keenly aware of generic alternatives and most often know of a coming generic version of a drug well in advance of a patent expiration.
Pharmaceutical Sales Reps
Third, DCP is charged with erecting a pharmaceutical representative registration program.
At one point in the session, the bill was drafted so as to establish a more overt sales representative licensing system.
As passed by the General Assembly, the bill requires pharmaceutical manufacturers to pay a $150 annual fee and register with DCP all individuals they employ who are pharmaceutical sale representatives.
The term pharmaceutical sales representative is broadly defined: “any person, including, but not limited to, a sales representative, who markets, promotes or provides information regarding a … drug …”
Pharmaceutical manufacturers must report annually to DCP the number of contacts each of its sales representatives had with prescribing practitioners and pharmacists, the specialty of each prescriber and pharmacist contacted, whether samples or “gifts of any value” were provided to prescribers and pharmacists, and the number “of all free samples“ provided to prescribers and pharmacists.
This registration is, as well, a solution in search of a problem.
While there is a great deal of myth and urban legend surrounding pharmaceutical sales reps, their work and practices are now highly, if not over, regulated by federal law and several federal agencies, including the Food and Drug Administration and the Department of Health and Human Services.
In addition, PhRMA, the industry trade organization, in consultation with federal and state policymakers, established a code of conduct for sales representatives.
The PhRMA Code is considered very strict and effective—and it has been adopted by Connecticut.
Fourth, the Office of Health Strategy and the Connecticut Department of Insurance are to prepare an analysis of pharmacy benefits managers’ practices and their impact on healthcare costs.
Fifth, OHS, working with the comptroller, the commissioner of Social Services and the Commissioner of Public Health, is to prepare a list of ten drugs that OHS determines are “provided at substantial cost to the state” or “critical to public health.”
The list can include only drugs where the “wholesale acquisition cost” of the drug increased by 16% or more cumulatively over the preceding two years.
A preliminary list is to be published for comment, giving manufacturers the opportunity to document that any price increase associated with the drug, “less all rebates paid to the state” for the drug, did not exceed the 16% threshold.
Drug manufacturers ultimately included on OHS’ list must provide a description, “suitable for public release,” of all factors contributing to the drug’s price increase.
In addition, manufacturers must provide “aggregate, company-level research and development costs and such other capital expenditures” data that OHS deems relevant.
Drug Pricing Program Reform
Finally, HB 6669 addresses some of the issues surrounding the federal 340B drug pricing program (HB 6669 has several additional non-biopharma provisions not addressed here).
Under the 340B program, companies sell drugs to “covered entities” (e.g., nonprofit hospitals) at a substantial discount.
The aim of the program is to help covered entities better serve uninsured and underinsured patients.
The bill bars pharmacy benefit managers from including certain reimbursement rate and fee provisions in their contracts with covered entities.
HB 6669 also charges the Commissioner of Social Services with establishing a working group to evaluate the 340B program and identify “opportunities for state action to protect 340B revenues … from unfair administrative barriers or unnecessary [contractual] conditions …”
Other Approved Bills
In addition to the governor’s healthcare bill, the other significant biopharma legislation passed this session includes:
- SB 977: Permits the Commissioner of Social Services to provide coverage for bariatric surgery and services for Medicaid and HUSKY B beneficiaries.
- SB 1102: Authorizes pharmacies and pharmacy technicians to administer certain vaccines, HIV and other drugs, and certain tests. The bill as passed and signed by the governor includes authorization for financial assistance for HIV prevention.
- HB 6672: Charges the University of Connecticut Health Center to collaborate with an independent nonprofit biomedical research institution in order to establish an endometriosis data and biorepository program to promote research concerning early detection of and therapeutics for endometriosis.
- HB 6585: Establishes a working group to study the feasibility of state universities to leverage the H1-B visa exemption process to promote workforce development.
- HB 6718: An Act Concerning the Safe Storage and Disposal of Certain Prescription Drugs, Cannabis and Cannabis Products
- HB 6768: An Act Concerning the Department of Consumer Protection’s Recommendations Regarding Prescription Drug Regulation
Notable bills which were not brought before either chamber, or passed in one but not the other chamber included:
- SB 6: An Act Concerning Utilization Review and Healthcare Contracts, Health Insurance Coverage for Newborns and Step Therapy
- SB 10: An Act Promoting Access to Affordable Prescription Drugs, Healthcare Coverage, Transparency in Healthcare Costs, Home and Community Based Support for Vulnerable Persons and Rights Regarding Gender Identity and Expression
- SB 80: An Act Concerning the Shortage of Certain Drugs Prescribed to Treat Type II Diabetes
- SB 983: An Act Limiting Anticompetitive Healthcare Practices
- SB 1116: An Act Concerning a State-Operated Reinsurance Program and Healthcare Cost Growth
- SB 1159: An Act Concerning Pharmacy Benefits Managers and Drug Affordability and Transparency
- HB 6619: An Act Prohibiting Pay for Delay
- HB 6734: An Act Concerning Decriminalization of Possession of Small Amounts of Psilocybin
- HB 6830: An Act Establishing a Prescription Drug Affordability Board
- HB 6831: An Act Concerning the Override of Step Therapy for Certain Mental Health Conditions and Establishing a Task Force to Study Data Collection Efforts Regarding Step Therapy
- HB 6584: An Act Concerning a Research and Development Expenses Tax Credit for Pass-Through Entities
- HB 6922: An Act Concerning the Business Operating Loss Carry-Over Period
- HB 6932: An Act Increasing the Rate of the Credit Refund Value for Certain Expenditures by Biotechnology Companies
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