Pa. insurance commissioner supports drug pricing legislation

Pennsylvania Insurance Commissioner Teresa Miller testified before state legislators in support of pharmaceutical price transparency bill.

The following is a statement from the Pennsylvania Insurance Department announcing her testimony:

Pennsylvania Insurance Commissioner Testifies in Support of Pharmaceutical Price Transparency Bill to Help Control Health Insurance Costs

Insurance Commissioner Teresa Miller testified before the House Insurance Committee in favor of House Bill 161 (HB 161), sponsored by House Insurance Committee Democratic Chairman Tony DeLuca, which would require drug manufacturers to disclose to the Insurance Department the cost of certain drugs with higher wholesale costs and those drugs with wholesale prices that have increased rapidly.

Teresa Miller

“Rising prescription drug prices are a major reason premiums in the individual health insurance market rose significantly last year. In the individual market pharmaceutical drugs rose from 13.6 percent of per enrollee health care claims in 2014 to 21.4 percent in 2015, a 57 percent increase,” Commissioner Miller told the committee. “Per enrollee pharmaceutical costs for plans sold to our small employers and their employees rose 33 percent over the same period. In order to make health insurance more affordable, we need to make the care health insurance pays for more affordable, and prescription drug prices are a huge part of that.”

The National Business Group on Health, a non-profit association of 425 large employers, also cited in 2016, for the first time, specialty drugs as the highest driver of health costs. Nearly one-third, 31 percent, of respondents to the Large Employers’ 2017 Health Plan Design Survey said specialty drug costs were the top driver of health costs.

HB 161 would require a prescription drug manufacturer to disclose to the Insurance Department the costs of production for drugs with average wholesale prices greater than $5,000 annually, or throughout the course of treatment. The bill would also require disclosure of production costs for drugs whose wholesale price has increased 50 percent or more over the past five years, or 25 percent or more over the past twelve months. Commissioner Miller applauded House Insurance Committee Chairs DeLuca and Tina Pickett for holding the hearing and increasing awareness of this important issue.

“The Insurance Department has no direct regulatory authority over prescription drug costs,” Commissioner Miller testified. “We do have some authority to ensure drugs consumers need are covered and covered fairly, but there is currently no mechanism to look at the issue of cost.  This legislation would be an important first step in that direction.”

Commissioner Miller said many issues involving the pharmaceutical industry can only be dealt with at the federal level. However, she noted the Insurance Department has taken a number of steps to increase transparency in the insurance industry, including posting health insurance rate review information on its website, and holding public hearings on health and long term care insurance rates and surprise balance billing. Commissioner Miller believes strongly that transparency is the first step to improving many aspects of our health care system and that understanding the cost drivers behind health insurance premium increases, like rising prescription drug costs, is the first step to making health insurance more affordable.

Consumers with questions or concerns about health insurance should contact the Insurance Department’s Bureau of Consumer Services, visit www.insurance.pa.gov or call 1-877-881-6388.