Senate grafts costly prescription drug amendment to House pharmacy bill

A late-breaking addition to a House bill to help independent pharmacies in Vermont would grant UVM Health Network an effective regional monopoly on cancer drugs and other specialty drugs. Insurers say the amendment could dramatically increase the cost of these lifesaving drugs. Photo via Pexels

A House bill to help Vermont’s independent pharmacies would now also benefit Vermont’s largest hospital operator after a last-minute amendment in the Senate on Friday.

H.353 began as a bill to make drugs more affordable by regulating drug benefit managers, third-party companies that negotiate drug coverage plans for consumers with private insurers.

Then on Friday morning, the Senate Health and Welfare Committee inserted language from S.242, a bill that died earlier in the session. The revisions would virtually guarantee that prescriptions for specialty drugs given to patients in health care facilities — including expensive drugs to treat cancer — would be filled at UVM Health Network’s pharmacy in Burlington, rather than in cheaper mail-order pharmacies preferred by insurers.

The Senate committee voted unanimously in favor of the amended bill.

Specialty prescriptions — a broad category that includes everything from Botox to biologics — are a relatively new addition to a doctor’s arsenal. Patients usually get these drugs at a clinic or other health care facility through a monthly infusion or injection. Because these drugs cost hundreds and thousands of dollars for a dose, insurers dispense them sparingly and only after patients and their doctors have exhausted all other options.

After insurers approve the drug for a particular patient, a mail-order pharmacy ships the prescription to the patient’s home or doctor’s office.

Sen. Ginny Lyons, D-Chittenden, who sponsored the amendment, argued that the practice can risk patients not receiving their medications, especially if shipments are not handled properly.

“It’s probably not a bad idea that both the patient and the provider can make sure the medicine isn’t left somewhere or stuck on a truck or porch,” she added.

Insurers argue the amendment would require them to pay for expensive drugs at the state’s only specialty commercial pharmacy, the University of Vermont Health Network facility in Burlington. But network pharmacists told lawmakers it was difficult to manage and account for shipments from mail-order pharmacies.

The amendment would be a financial boon to UVM Health Network. A single dose of Herceptin, a biologic drug to treat esophageal and breast cancers, for example, costs more than $10,000 when dispensed from a hospital pharmacy, according to national insurers group AHIP. The same drug costs about $6,500 at a doctor’s office and $4,600 at a stand-alone pharmacy.

Private insurers countered that the amendment would require them to pay for more drugs to be dispensed at the state’s only specialty commercial pharmacy, the University of Vermont Health Network Pharmacy in Burlington.

Significantly, the bill would allow the state’s Medicaid program to procure and ship specialty drugs by mail through Rutland Regional Medical Center, the only specialty pharmacy that works with that public insurer.

Sen. Ann Cummings, D-Washington, acknowledged during Friday’s discussion that the amendment is a compromise between patient safety and affordability for an expensive drug class.

“These costs are reflected in our rates,” she said. “…We have this conflict because part of our job – what we’ve told everyone to do – is to cut costs.”

The Senate version of H.353 also makes substantial revisions to the provisions of the bill governing pharmacy benefit managers. The original bill, which passed the House last month, focused primarily on transparency. For example, drug benefit managers would have had to submit profit margin reports to state regulators. It would also have limited sudden changes in drug prices.

The Senate version retained most of the provisions put in place by the House Health Care Committee, but the additional language on specialty drugs would likely make prescription coverage more expensive for Vermonters with private insurance. This goes against the original intention of the House.

Rep. Mari Cordes, D/P-Lincoln, who sponsored the bill in the House, said Monday that while she agrees with most parts of the bill, she would like to amend the part of the bill that gives the UVM health network an advantage in specialty drugs.

Cordes, who is also a cardiac nurse at UVM Medical Center, said the bill is a step in the right direction, even with the amendment.

If the full Senate approves the amended bill, then House lawmakers will pass the amendments.

“It’s a work in progress,” Lyons said. “And it’s not just one organization or one institution. We’re trying to ensure patient access and safety and, of course, cost savings, and that’s across the spectrum of the healthcare world.

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