Across the country, state legislative sessions have begun. The ACR is already hard at work with our partners, ensuring the voice of the rheumatology community is heard as legislators are considering healthcare legislation. Here is a look at some of the bills we are already monitoring and the trends we expect to play out over the 2024 legislative calendar.
Copay Accumulator Bans
State copay accumulator legislation will continue to be a key component of our state legislative priorities in 2024, and we expect to see a flurry of activity around this issue. These laws prevent payers and pharmacy benefit managers (PBMs) from excluding manufacturer copay assistance from counting towards patients’ annual deductibles or out-of-pocket maximums. Without this legislation, patients may face unexpected financial burdens, hindering their ability to afford essential medications.
We expect accumulator ban legislation to be considered in at least 16 states this year. So far, 20 states and Puerto Rico have enacted bans. Most of the legislative activity will be in states that have previously considered bans but have not enacted them for a variety of reasons. These states include Wisconsin, Missouri, Ohio, Michigan and Florida. If history serves as a guide, we can expect to see wins in a couple of states by the end of the legislative session. However, that is not guaranteed, and the rate of adoption is slower than we would like to see on this issue.
In 2024, we are noting the continuation of a recent trend: More states are addressing PBMs on an issue-by-issue basis, rather than taking up larger PBM reform packages. Some of this is because a lot of progress has been made at the state level on PBM reforms already. The prevailing trend we see early on is that there again seems to be a lot of rebate pass-through legislation.
Rebate pass-through legislation requires a certain percentage of rebates collected by PBMs to be passed back to the consumer or the health plan. The current bills that we are tracking are consumer-focused and require the consumer’s cost-sharing to be reduced at the pharmacy counter. Most require 80% of rebates that a PBM is expecting to receive to be passed through to the patient at the pharmacy counter, but the amount will vary from state to state. In Georgia, for example, HB 343 only requires 50% of the rebate to be passed through to the patient at the pharmacy counter. The ACR will continue to work with our partners to support rebate pass-through legislation across the country so that patients can more easily afford and access the medications they need.
Last year, Florida passed one of the larger PBM and drug-pricing reform packages in recent memory. The legislation was a priority of Gov. Ron DeSantis and included anti-steering provisions, bans on spread pricing and clawbacks, and other licensing regulations. It also included reporting requirements for manufacturers to justify annual price increases and to give advance notice of price increases. One thing to watch moving forward is whether other states adopt this novel approach.
Prescription Drug Affordability Review Boards
A recent strategy by states to tackle rising drug costs involves the establishment of prescription drug affordability review boards (PDABs). These boards, usually instituted at the state level, serve as regulatory entities entrusted with evaluating the pricing of select prescription drugs. Their principal goal is to scrutinize whether the expenses linked to specific medications are rational and defensible, considering factors such as research and development, production and overall healthcare outcomes. Through comprehensive reviews, these boards aim to pinpoint instances of exorbitant pricing and introduce measures to mitigate such practices.
PDABs are relatively new, and Colorado is currently initiating its inaugural affordability review involving a few rheumatology drugs. However, the ongoing process has been characterized by a lack of clear definition, leading to concerns about transparency. If hasty evaluation of affordability leads to price caps being imposed without meticulous consideration, there is the potential for creating access challenges for patients who are stable on their medications. This approach may exacerbate existing inequities within the healthcare system. The ACR takes a nuanced stance on PDABs, neither endorsing nor opposing them, but rather offering insights to caution against unintended consequences. We will adjust that position if needed and will continue to closely monitor PDAB legislation and the PDAB process in states that establish them.
Other Issues to Watch
We are also monitoring utilization management issues once again. There has been quite a bit of success on these issues over the last five years and there are fewer remaining states to actively target for prior authorization and step therapy wins. We continue to closely monitor a few states where legislation could move this year, but this is a time of transition for utilization management issues. We are seeing the focus shift to new policy innovations, such as the prior authorization “gold card” legislation that has recently passed in Texas and Arkansas.
Artificial intelligence (AI) is another emerging topic of concern that we are closely monitoring. State regulators are becoming increasingly interested in AI and the potential for this innovative technology to be used in ways that could compromise patient safety and data security. We are monitoring these discussions and weighing in where appropriate. The ACR recently released its first ever AI position statement and will continue to build out that statement as AI and the issues around it evolves.
This state legislative session seems different than the previous ones I have been a part of at the ACR. There is a lot of opportunity for wins on our issues, but it lacks the clear themes of previous sessions. Even legislation that is generally popular, such as copay accumulator bans, can get caught up in the trappings of election-year politics. Although that makes writing articles like this one particularly challenging, it does make the session even more exciting. Usually, we have a good sense of what is likely to happen prior to the start of the legislative calendar. 2024 may hold more surprises than usual, even if it lacks a clear theme.
Joseph Cantrell, JD, is the director of state affairs and community relations for the ACR.