Lawmakers look for ways to reduce prescription drug prices

The morning before heading into negotiations over Minnesota's health and human services budget, Michelle Benson heard a news story about a new wonder drug that could potentially cure spinal muscular atrophy — a crippling and often fatal disease in babies.

The only problem? It could cost $2 million a dose.

"These are the debates that we end up having as policy makers: Who pays for that?" said Benson, a Republican state senator from Ham Lake, Minn., and chair of the Health and Human Services Finance Committee. "The miracles that are created in the pharmaceutical industry, we celebrate, but they also need to treat consumers fairly."

It's not just the miracle drugs. The price of brand-name oral prescription drugs already on the market rose more than 9 percent a year between 2008 and 2016, according to a recent report in the Journal on Health Affairs, while the annual cost of injectable drugs rose more than 15 percent. The price of insulin doubled between 2012 and 2016, according to the Health Care Cost Institute.

This session, Minnesota lawmakers are trying to get their hands around skyrocketing drug prices and the complex pharmaceutical industry that sets the prices. Bills have been introduced to tackle the problem, from anti-price gouging efforts to new reporting requirements for drug companies when prices suddenly spike.

Even in a divided Legislature, nearly all those bills are tucked into House and Senate budget bills and are heading into the final negotiations of the 2019 session.

"This is something that impacts all Minnesotans at one time or another, and it's really driving the increases of the cost of health care," said DFL Rep. Tina Liebling of Rochester, Minn., who chairs the House health and human services budget committee.

The bipartisan push has been fueled by horror stories from Minnesotans. Nicole Smith-Holt has become a regular around the Capitol talking about her son Alec Smith, a Type 1 diabetic who died at age 26 because he was rationing insulin that he couldn't afford. Legislators keep his photo in their wallets and on their desks.

"It's an honor, it feels good," she said. "It feels like Alec is motivating these people to do good for other Type 1 [diabetes]."

The House budget includes a bill that would create a new registration fee for insulin manufacturers to help pay for emergency insulin supplies. At the last minute, Benson added language to the Senate health and human services budget that would create an emergency insulin assistance program in the state Department of Human Services.

Both the House and Senate bills also create a new requirement that drug makers provide notice to the state when drug prices are being increased substantially. But while supporters say these bills will increase drug pricing transparency, some argue they won't actually change drug prices for Minnesotans.

Rep. John Lesch, DFL-St. Paul, introduced a bill that allows the attorney general to investigate a drug company when the price of a drug spikes by 50 percent or more. But he said that bill is not going anywhere in the Senate.

"People are dying, and unfortunately for the Republicans, it will take a few more people dying before they wake up and see, 'No, we actually need some remedial measures on drug company profits and helping people out,'" he said.

There are also bills moving through the Capitol this year to regulate pharmacy benefit managers. They negotiate with drug manufacturers on behalf of the government and insurers, and the deals they strike determine the availability and prices of prescription drugs for more than 266 million Americans.

But they do this out of view of the public and regulators, which leads to confusion about how drug prices are set.

The Senate has already passed a bill to make the pharmacy benefit manager process more transparent, including a licensing requirement, and the House could take it up as early as this week.

"We have to look at every piece of the supply chain and look at what we can do," said Sen. Scott Jensen, R-Chaska, the bill author and one of a handful of physicians in the Legislature.

If lawmakers don't act quickly enough on drug prices, Jensen said, voters will likely increase pressure on them in the next election.

"This place operates so slowly and sometimes things have to happen incrementally when I think, 'gee whiz, it's as plain as the nose on your face, let's just get it done,'" he said. "It drives me crazy."