CONCORD — A bill signed by Gov. Chris Sununu will cap the price of insulin for patients at one of the lowest rates in the country.
The bipartisan effort offers a suite of health care reforms, including a limit of $30 on copayments for each 30-day supply of insulin and a provision that requires insurance companies to cover epinephrine auto-injectors, often known by the brand name EpiPen, which are used in the case of an allergic reaction.
This change follows several states that have passed similar measures in the last few months, such as New York, Maine and Washington. However, New Hampshire’s cap is one of the lowest in the country, rivaled only by Utah, which also has a $30 cap.
Critics of the law worry that increased restrictions on insurance companies will ultimately cause premiums to rise, as companies look for ways to recuperate their lost revenue.
“There’s no free lunch in economics,” said Andrew Cline, the president of the Josiah Bartlett Center for Public Policy. “You cap a price for one thing, the insurer makes up for it somewhere else.”
The bill also changes the way pharmacy benefit managers, or PBMs, will operate in the state. PBMs serve as middlemen between pharmaceutical companies and insurance providers. One of their primary responsibilities is to negotiate with drugmakers to set prices of medications.
Typically, the state sends out a request for proposals, asking PBMs to submit what kind of price they can offer the state. However, the proposals are often extremely complicated and difficult to compare, which can cause the state to choose a PBM that isn’t in its own best interest.
The new “reverse auction,” as proposed by this bill, reverses the bidding process from many sellers and one buyer to one seller and many buyers. Instead of asking each PBM to submit its own proposal, the state will present a benefit design and have PBMs make their best offer.
Then, on the next rounds of bidding, each PBM proposal is made public to the other bidders, in hopes that the transparency will let them undercut each other and generate lower prices.
In a study funded by the Josiah Bartlett Center for Public Policy, economists predict the new bidding method could save the state $22.2 million dollars on prescription drugs.
New Jersey implemented a similar system in 2018, and has since reported saving 25% on PBM costs, or about $1.6 billion. New Hampshire is the second state to implement a program like this.
New Hampshire is in its second year of a three-year contract with Express Scripts, a PBM based in Missouri. Cline said given the difficult financial situation right now, the state should try to renegotiate the current deal. If successful, the state could save millions of dollars.
“That’s a lot of staff that don’t have to get furloughed, a lot of services that don’t have to get cut,” he said.