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Unprecedented Drug Shortages Demand Legislative Attention
The pharmaceutical sector in the United States faced considerable tribulations in the first quarter of 2024, marked by an unprecedented drug shortage that reached a historical zenith with 323 individual drug shortages, as cataloged by the American Society of Health-System Pharmacists and the University of Utah Drug Information Services. The scarcities span a wide spectrum of medications, ranging from the labor-inducing hormone oxytocin to ADHD medications and crucial chemotherapy drugs. Notably, Ozempic, a drug typically associated with weight management, has emerged as one of the most difficult to procure, complicating treatment regimens for those reliant on its dual benefits for weight reduction and managing blood pressure.
States like Connecticut and Indiana have been proactive in addressing these issues. Connecticut is undertaking an academic study to better understand and manage drug shortages—especially those drugs used by anesthesiologists. Indiana, meanwhile, has temporarily approved the use of brand-name drugs to alleviate the impact on those covered by its insurance programs, a significant decision that could greatly increase costs for the state.
The California State Board of Pharmacy offered tips on how to avoid shortages, including a recommendation that centrally held inventories are better able to withstand drug requests
Disparate State Coverage of Ozempic Exacerbates Health Inequities
The coverage of anti-obesity drugs such as Ozempic has become a contentious issue, with only 16 states offering insurance coverage that includes these medications without out-of-pocket costs. This patchwork coverage is creating health inequities, particularly highlighted by the situations in North Carolina and Delaware where employees face significant expenses. This ongoing issue affects over 750,000 workers, emphasizing the need for a unified approach to health care coverage.
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Clampdown on Pharmacy Benefit Managers: A Growing Priority for States
As the healthcare landscape continues to evolve, one of the critical focal points for state legislatures across the United States is the regulation of Pharmacy Benefit Managers (PBMs). These companies play a pivotal role in the healthcare system by managing prescription drug benefits for insurance companies, large employers, and Medicare. They negotiate fees and discounts with pharmaceutical companies, determine the availability and cost of drugs to individuals, and collect fees and rebates based on sales volumes. Yet, the opaque nature of their operations has prompted calls for greater transparency.
According to data from the National Community Pharmacist Associations, nearly every state—excluding Arkansas, Connecticut, Delaware, and Washington D.C.—currently has legislation pending that would require PBMs to offer more transparency or share the rebates they receive. This legislative push reflects a broad consensus on the need for greater clarity in how PBMs operate, amid conflicting studies about their impact on drug pricing. While some research suggests that PBMs help lower costs for the government and consumers through rebates, other studies indicate that drug prices have increased disproportionately to these rebates.
The call for tighter regulation has been echoed in recent state government meetings, with an astounding 314 discussions taking place over the last 90 days. Key discussions include:
Missouri State Legislature: Lawmakers have emphasized the need for additional transparency from PBMs, underlining a widespread desire to better understand and potentially regulate these entities more effectively.
Nebraska Banking and Commerce Committee: In Nebraska, there is a significant push to hold PBMs accountable, especially those that circumvent state oversight when dealing with state matters. The committee has advocated for more stringent regulations to ensure that PBMs cannot operate without proper scrutiny.
California State Assembly: California is also seeking increased transparency from PBMs. The State Assembly is pushing for regulations that would peel back the layers of PBM operations to ensure fairer pricing and accessibility of drugs to consumers. .
This widespread state action underscores a significant shift towards greater regulatory oversight of PBMs, aiming to ensure that the benefits of negotiations and rebates are passed on to consumers and not just absorbed by the complexities of the healthcare system. As these discussions continue to unfold, they represent a critical step toward achieving more equitable healthcare outcomes and maintaining the integrity of drug pricing and distribution in the United States.
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