When Study Becomes the Policy End Game

As complex, controversial legislation churns through the legislative process, a path forward is often found in amending it to create a study bill.

Whatever new requirements or restrictions or regulatory schemes set forth in the original legislation or raised in public hearings are to be studied by a task force or executive agency, a report prepared for the legislature, and whatever the issue or set of issues to be taken up—or not taken up—in a future legislative session.

This can set the stage for better more informed public policy, or be a dead end for potentially good ideas that are just too politically polarizing.

The study phenomenon came into play this past week with two biopharma-related bills.

Prescription Drugs, Step Therapy

SB 6 makes several substantive changes to current law, including:

• Barring health carriers from requiring a prospective or concurrent review of prescription drugs used to treat autoimmune disorders, multiple sclerosis, or cancer if they have already approved the care through utilization review
• Extending from 61 to 91 days the time required in which a person must notify an insurer of a newborn’s birth
• Reducing an insurer’s ability to require step therapy (a protocol establishing a sequence for prescribing drugs for specific medical conditions) for prescription drugs from 60 to 30 days (and barring step therapy for drugs to treat schizophrenia, major depressive disorder or bipolar disorder)

To the broader issue of step therapy, the bill establishes a 23-member task force to study step therapy data collection, including step therapy edits, rejections and appeals for behavioral health drugs, and the best ways to collect data.

Pharmacy Benefit Managers

SB 1159 was revised as it was considered by the Insurance and Real Estate Committee and then the Appropriations Committee.

As revised, the bill requires the Connecticut Insurance Department to prepare a report on issues relating to pharmacy benefit managers.

PBMs serve as third-party intermediaries, administering prescription drug programs for insurers. PBMs are responsible for developing and maintaining prescription drug formularies (the set of drugs covered by an insurer), contracting with pharmacies, negotiating discounts and rebates with drug manufacturers and processing and paying prescription drug claims.

The report called for in SB 1159 will include an analysis of:

• PBM drug distribution practices regarding spread pricing (charging a payer more than what is paid to the dispensing pharmacy), manufacturing rebates, and transparency
• Impacts related to the ownership structure, corporate governance and vertical integration of PBMs with health insurance carriers and pharmacies
• Potential anticompetitive practices by PBMs in designing drug formularies

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Paul Pescatello is the executive director of CBIA’s Bioscience Growth Council and chair of We Work For Health Connecticut. Follow him on Twitter @CTBio.