The Senate had a long debate last Thursday and Friday on SB-175, the Prescription Drug Affordability Review Board bill. No doubt the sponsors' hearts are in the right place, but…
In a nutshell, the bill creates a board of appointed officials with no accountability to the citizens to review prescription drug prices and cap those prices that they believe are too high. This board's decision carries the weight of law, each violation results in a $1,000 fine.
Despite the best of intentions, this bill has the potential to make critical drugs completely unavailable to the Coloradans at any price. There is much more to the retail price of drugs than the cost of the ingredients and the bowl to mix them. Drug companies hire some of the best and brightest to do research and development, spending 10s of millions of dollars to bring a promising drug to the market. It takes years of testing and reviewing real world trials to obtain Federal Drug Administration approval. A portion of all of those up-front costs has to be included in every dose sold. (If you are thinking of the speed that the Covid-19 vaccines reached the market, just know Covid-19 was deemed enough of a threat that it was fast tracked or given a short cut.)
Bottom line, if a pharmaceutical company cannot make a profit, they won't be in business to bring forward the next innovation or cure the next disease or continue research on the hundreds of diseases that have defied a cure for generations. And don't think that just because Colorado, with its 1.67 percent of the national market, engages in price fixing that pharma will immediately fall into line encouraging the other 98. 33 percent of the market to do the same thing.
There is one notable exception to the price ceiling on drugs and that would be the Department of Corrections. Thanks to a lawsuit and a judicial decision if a drug is available, regardless of the cost, to treat inmates the Dept. of Corrections must (and should) make that treatment available to the inmates.
Affordability is in the title so who saves money? It won't be anyone with insurance that relies on a copay. If you have a set copay for generic drugs, a larger copay for brand name and a deductible that must be satisfied for other medical care, you're in that group. Your insurance company may see a saving and perhaps pass some of that on to you. If your policy is one of the rare coinsurance policies, this would be one where you pay a percentage of every service and not a set copay, you might actually see a decrease in your health care costs, assuming the drug is available in Colorado.
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