The EACH/PIC Coalition submitted written testimony to the Maryland Senate Committee on Finance ahead of consideration of S.B. 357. The letter urged the committee to oppose the bill that would expand the upper payment limit authority of the Maryland PDAB.
The letter addressed issues raised during the hearing on the bill:
“Because of their market power, insurers and PBMs can extract huge rebates from manufacturers to include drugs on their formularies. As several witnesses testified at the Finance Committee hearing for S.B. 357, when these rebates are lowered by UPLs an insurer/PBM can respond simply by excluding the UPL drug from the formulary in favor of drugs with higher rebates and/or shifting the UPL drug to a higher cost-sharing tier, which forces patients to incur higher cost-sharing obligations.
“Proponents of S.B. 357 insisted at the hearing that insurers/PBMs will lower OOP costs for drugs with UPLs because “[Insurance Commissioner] Marie Grant will make them do it.” However, Commissioner Grant herself acknowledged at the hearing that this was an overstatement. She explained that theMaryland Insurance Administration can only reject or modify premium increases by insurers and has little authority to alter a health plan’s cost-sharing design (i.e copays, coinsurance, deductibles) apart from asking plans to explain how they will accommodate new UPLs for selected drugs in their annual rate filings.”