Weekly Policy Update: CBSA Testifies on Local Impact of Drug Pricing Bill
By: Colorado BioScience Association Date: 03/19/2021
This week CBSA testified in opposition to Senate Bill 175 in the Senate Health & Human Services Committee. The bill would create a prescription drug review board in Colorado that’s charged with reviewing prescription drug prices and if they determine a drug is unaffordable to Coloradans, the board would have the authority to set upper payment limits on all payments and reimbursement for the drug in the state.
While we commend the bill sponsors on their goal to improve the affordability of medicines, CBSA is concerned this bill will make it harder for the companies in our ecosystem to raise the capital they need to support the research, development and commercialization of new therapies.
We also fear that patients may not have access to medicines that have a state-mandated upper payment limit. For instance, if a hospital purchases drugs from outside the state, the purchase price would remain the same, but their reimbursement could be greatly reduced by a state upper payment limit set the board. The hospital would lose money and be faced with a decision of whether to absorb that loss, find alternative treatments that may not be as effective or stop offering the therapy to their patients. Another scenario: if a payer cannot successfully negotiate to obtain a therapy at the state-mandated rate, the drug may not be included on the formulary. There are many likely situations that would make it harder for Colorado patients to get the medicines they need.
During the committee hearing, witnesses from every part of the drug supply chain raised objections to the board’s authority to set upper payment limits, including hospitals, pharmacists, wholesalers, specialty physicians, insurers, and pharmacy benefit managers. Local chambers weighed in with concerns about price setting in the private market, and rare disease patients shared their fears that price controls could discourage the development of new, innovative therapies. Despite the strong and compelling testimony in opposition to the bill, Senate bill 175 passed the Health & Human Services Committee on a party line vote (4-3).
While we are disappointed that the bill advanced, the CBSA team appreciates the support and engagement of our ecosystem. Many members of our life sciences community participated in legislator meetings, sent letters, and testified in committee to convey their strong concerns about how this bill could impact life sciences in Colorado.
This is only the first hearing. CBSA will continue to work with our members and partner organizations to mitigate Senate Bill 175 as it moves through the legislature.