Martin M. Looney

Senate President Pro Tempore

Martin M. Looney

An Advocate for Us

May 24, 2017

Senator Looney and Senator Fasano Applaud Passage of Legislation Enhancing Pharmaceutical Transparency and Consumer Protection

Today Senate President Pro Tempore Martin M. Looney (D-New Haven) and Senate Republican President Pro Tempore Len Fasano (R-North Haven) applauded the Senate’s bipartisan efforts to pass important patient-friendly legislation.

The health care bill passed by the Senate today with unanimous support will help increase transparency regarding pharmaceutical costs, prevent consumers from paying more for prescription drugs than the drug actually costs and ensure fair competition to benefit consumers.

Senate Bill 445 extends Sen. Looney and Sen. Fasano’s efforts over several years to implement significant health care reforms in the state of Connecticut.

A major portion of the bill addresses fairness in pharmacy benefit manager contracts. The bill eliminates restrictive “gag clauses” that prevent pharmacists from sharing price information with their patients, especially as it relates to lower cost options. It also bans “claw back” provisions which result in consumers paying more than a prescription actually costs.

For example, if a consumer goes to a pharmacy and pays a $20 co-pay, this co-pay is agreed to by the pharmacy benefits manager (PBM) and the insurers who hire the PBM. Pharmacists are reimbursed for the price of the drug (sometimes a small service fee) which could be just $5 and the PBM pockets the difference, in this case $15, as a secret claw back. In some cases, patients could actually receive their prescription drug for a lower price if they pay out of pocket and not through their insurance policy. Similar legislation has been adopted in other states including Louisiana, Arkansas, and Maine and has passed the Texas legislature.

“This bipartisan legislation outlaws anti-consumer practices that have contributed to rising prescription drug prices and led to Connecticut residents being price gauged at pharmacy counter,” said Senator Looney. “In addition, our bill ‘requires that facility fee notices include a telephone number that the patient can call to get more information including the estimated exact amount of the fee.’ Also, the legislation addresses surprise bills for service from clinical laboratories and requires patient consent in writing for out of network services.”

“This legislation is intended to protect consumers here in Connecticut,” said Senator Fasano. “Pharmacists should not be prohibited from disclosing relevant information about the cost of treatment options. At the end of the day this is about making healthcare more affordable for Connecticut residents and protecting our consumers,” said Sen. Fasano. “The profits that these companies make on claw backs is shocking, these profits should not be bank-rolled on the backs of our hard-working families, and this legislation protects against that practice.”

Another provision of the bill addresses fair competition for the benefit of Connecticut consumers, specifically in regard to anti-trust laws. Connecticut is one of only 12 states that had not clarified their anti-trust laws to protect consumers. The bill explains that a pharmaceutical or medical device manufacturer cannot avoid liability for price fixing or other anticompetitive behavior simply because the consumer was not a “direct purchaser” of a product. Specifically in the pharmaceutical and health care market consumers are almost never the “direct purchaser” of a product, often times a much needed drug. This will allow consumers and the state, if they have been injured by anticompetitive behavior that violates our antitrust laws to have their day in court.

The bill also clarifies the definition of facility fee, requires notice of a facility fee at the time of scheduling an appointment, and requires that facility fee written notices include telephone numbers so that patients can find out the exact amount a facility fee would cost them. This is intended to provide more cost information to patients early on so they can better plan for their medical care.

“Transparency is the greatest tool we have to combat unsustainable drug cost increases and help Connecticut residents make the best decisions regarding their health,” said Senator Terry Gerratana (D-New Britain) Co-Chair of the Public Health Committee. “We have heard far too many instances of skyrocketing prices keeping medicine out of the hands of the people who need it. Passing this bill will shed light on prescription drug pricing, reducing costs and making our health system work better for everyone.”

“It is our job as legislators to always protect our constituents,” said Senator Heather Somers (R-Groton), Co-Chair of the Public Health Committee. “This legislation is about taking proactive steps to ensure accountability for anti-competitive behavior and safeguarding consumers from non-transparent pricing.”