NCGA Has Real Opportunity to Act on Rx Costs, Transparency

Two bills introduced at the North Carolina General Assembly give lawmakers a real opportunity to significantly tackle prescription drug costs and make pricing more transparent.

The first is Senate Bill 479. The bill, called the SCRPIT Act, will lower cost, increase transparency into PBMs and the supply chain, and provide much-needed support to independent pharmacies.

The bill does a lot of positive things for North Carolinians.

• It allows pharmacies in rural counties or pharmacy deserts to be reimbursed at higher amounts. Without this legislation, if you wanted to reimburse small or independent pharmacies more, you would have to provide those same increased amounts to national chain pharmacies.
• It increases transparency into PSAOs, PBMs, and pharmaceutical manufacturer pricing.  
• It prohibits PSAOs from requiring independent pharmacies to purchase more expensive drugs from certain wholesales who may have a financial interest in the PSAO.
• It allows independent pharmacies to decline to fill a prescription if they would take a loss, so long as the pharmacy directs consumers to where they can obtain the drug.
• It requires that consumers receive prescription drug rebates at the point-of-sale.

If this bill is passed into law, no state in the country will have greater transparency into the prescription drug supply chain, or have more consumer-friendly policies to support independent pharmacies, than North Carolina.

The second bill is Senate Bill 517. There is perhaps no other legislation that would have a more significant impact on drug cost then this bill.

Senate Bill 517 deals with something called the federal “340b” program.

The 340b program was created by the federal government to help uninsured and low-income patients get medicine at an affordable cost.

Under the program, drug manufacturers are required to sell their products at a steep discount to select “340b covered entity” hospital systems so those savings can be passed on to the patient.

But that isn’t happening.

Instead, reports show hospital systems are charging more than 500 percent over the discounted price they paid to get the drug.  

More than 50 hospitals in North Carolina qualify for these mandated discounts, including many of the biggest: Atrium Health, Novant, Vidant, Duke, UNC and WakeMed.

National pharmacy chains are also winning big on the markups. In 2010, a policy change allowed covered entities like these hospital systems to contract with an unlimited number of for-profit retail pharmacies to dispense medicine.

One study found that over half of the 340b profits retained by contract pharmacies are concentrated in just four chains – Walgreens, Walmart, CVS Health and Cigna's Accredo specialty pharmacy.

Senate Bill 517 would put a stop to markups and ensure federal discounts are passed onto the consumer as intended.

If the North Carolina General Assembly passes these two bills, they will have done as much, or more than, any legislative body in the country to bring down drug costs and increase transparency across the supply chain.