State lawmakers call for more transparency from prescription drug companies

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Ashley McCallum
Thursday, October 12, 2017

MADISON -- Pharmaceutical companies would be required to inform the state of prescription drug increases before they happen, based on a bill introduced Thursday.

The bill, among three introduced by Rep. Debra Kolste, D-Janesville, aims to urge more transparency from pharmaceutical companies regarding costs and prices of medication, according to a news release.

Pharmaceutical companies currently hold the power to increase prices for medications without revealing the cost to produce them, Kolste said.

“In today's healthcare system, consumers have been given little or no insight into the actual costs that everyone says is driving consumer healthcare pricing,” Kolste said. “They're constantly barraged by higher pricing with no transparency.”

If passed, the bill would require companies to submit to the Wisconsin Department of Health Services justification for price increases, Kolste said. She hopes the justification would prompt negotiation between the state and the companies.

The state has a vested interest in medication prices, Kolste said. Increasing prices drive higher costs for Medicaid and Medicare services.

The state would need to be informed of possible increases 30 days in advance, according to a release from Rep. Mark Spreitzer, D-Beloit. Companies also would be required to submit an annual report to the state, outlining market value of assistance for Wisconsin residents.

Kolste understands rising medication costs personally, she said. The medication she has taken for 25 years to prevent migraines was recently changed from tier one, the lowest level for medication costs, to tier three, the second most expensive.

That's an experience she does not want Wisconsin residents to face, she said.

The second of three bills would prevent insurance companies from removing prescription drugs from their coverage while a consumer has a contract in place, according to the release.

Prescription costs increase too often without notice or reason, Kolste said.

The third bill would require third-party administrators for prescription drug plans to register with the state's Office of Commissioner of Insurance, according to the release. Other states already require pharmacy benefit managers to register.

Insurance companies are required to register with the state to operate, and that's something Kolste believes pharmacy benefit managers should do, too.

The Gazette was unable to reach a representative from the Pharmacy Society of Wisconsin for comment.

Robert Kraig, executive director of Citizen Action of Wisconsin, said healthcare costs will continue to spiral out of control if state government does nothing to prevent drug companies from collecting “windfall profits” from prescription medications.

Drugs like Naloxone, or Narcan, which reverses the effects of drug overdoses, have seen price increases over time as a result of increased demand, Kraig said. But there is not evidence to say cost to manufacture has increased.

Officer Chad Woodman from the Janesville Police Department said he has heard prices for Narcan have increased over time but is not sure how much because the department receives Narcan from area hospitals and from the fire department.

Kolste and Spreitzer said constituents of all political views want to see their prescription prices remain consistent.

Some opposition toward the bill claims that requiring drug companies to be transparent interferes with private industry, Kolste said.

The bills are not meant to be a punishment for businesses, Kolste said. She believes not enough people have been asking drug companies why prices increase.

“It's just asking for transparency,” she said. “We're not saying (companies are) doing something wrong, it's just that (we should ask) why.”

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