Austin's amendments to legislation seek to lower health care costs

Apr. 1—ANDERSON — With a goal of reducing health care costs for consumers, several amendments authored by Rep. Terri Austin have passed in committee.

Austin, D-Anderson, said last week a top issue is control of health care costs in Indiana.

One of the amendments offered by Austin would establish a study of market concentration to be done by the Legislative Services Agency. The date was extended after discussion to give them two years to complete the study, making the study's report due on Sept. 1, 2022.

The study would involve all aspects of the health care industry in Indiana to include hospital, licensing of health care practitioners, the retail pharmacy industry and the relationship with wholesalers.

"It is my hope by offering this amendment that we'll take a pause on any additional, piece-by-piece legislation as it relates to all interested parties in the healthcare world," Austin said. "We need to figure out manufacturing costs and conflicts, the wholesalers' issues and conflicts.

"We have to look at every step in the supply chain so that we're not just picking on one particular industry sector," she said. "We need to drive down the cost for not only employers but for consumers."

The amendments, passed without opposition in the committee, include language with the goal of driving down health care costs for employers and consumers and bringing more transparency to the relationships between pharmacy benefit managers (PBMs) and their clients.

The bill will now be considered by the Ways and Means Committee of the Indiana House.

Austin's amendment provides a guarantee that a PBM would work fairly when dealing with both the retail pharmacy and employer side of any services contract.

She said PBMs are key players in the complex prescription drug supply chain. They act as middlemen, responsible for developing and maintaining the list of drugs to be covered by insurance plans and other clinical management programs, negotiating reimbursement contracts with pharmacies, purchasing agreements that include rebates with pharmaceutical manufacturers and processing prescription drug claims for insurance companies and corporations.

"PBMs have an obligation to act in the best interest of their clients," Austin said. "We've seen complaints arise when PBMs work on both ends of the supply chain — when they leverage their purchasing power with drug manufacturers to purchase at significant discounts yet reimburse local pharmacies at below cost levels, pocketing the sizable profit instead of passing it on to the consumer or the employer group."

She is urging that the process would be open about this conflict of interest and to hold them accountable.

The second amendment would take contracting language for reverse auctions already in state statute.

Austin said The reverse auction procurement model requires all participating PBMs to offer the same contract terms and to compete on price only.

It also would allow self-funded employer groups to utilize this model when contracting for their employees' drug benefit package.

"Several states are already doing this and saving millions of dollars," Austin said. "It promotes more competition among the pharmacy benefit manager companies and it can be a great tool to give states a little more control when it comes to prescription pricing. It's fair to those submitting the bids and it would also increase price transparency by making the bids and responses to bids public."

Follow Ken de la Bastide on Twitter @KendelaBastide, or call 765-640-4863.

___

(c)2021 The Herald Bulletin (Anderson, Ind.)

Visit The Herald Bulletin (Anderson, Ind.) at www.theheraldbulletin.com

Distributed by Tribune Content Agency, LLC.