Blue Cross continues to focus on lowering drug costs

When the state’s Prescription Drug Task Force released a report on its findings at the end of last year, it incorporated several ideas shared by Blue Cross Blue Shield of Michigan. The bipartisan task force sought input from Blue Cross and other health policy experts and stakeholders on how to lower the rising costs of prescription drugs. Blue Cross’ Kristen Kangas-Kraft, director, State Relations, and Tim Antonelli, manager, Pharmacy Services, spoke with the task force late last year to offer a payers’ perspective on this pressing issue.

Prescription drug costs are the fastest-growing consumer health expense — exceeding the cost of in-patient hospital stays. Without action, the Office of the Actuary at the U.S. Centers for Medicare & Medicaid Services estimates that drug expenditures in the U.S. will increase from $359 billion today to $560 billion in the next eight years.

“One of our top priorities is ensuring our members have access to the right medicine at the right time at the best possible price,” said Kangas-Kraft. “Increasing drug costs remain one of our largest single expenditures and create significant access concerns for our customers.”

Antonelli explained that Blue Cross continues to see unexplained cost increases as well as new drugs coming onto the market with very high prices at the time of their introduction. He noted one encouraging trend: the expanded use of generics, which has played a significant role in helping reduce the overall prescription drug cost trends. Looking to the future, he predicted that biosimilars will play an equally important role in creating additional competition in the market.

However, some manufacturers have employed various strategies to protect their products from competition, such as securing numerous patents, suing generic drug manufacturers and raising frivolous, often questionable claims against the competition.

Blue Cross has already implemented many approaches to stem rising drug costs — many of which you’ve read about in this newsletter. These include working closely with Civica Rx to help address the issue of high-cost generics, providing members and their doctors with real-time drug pricing information and offering benefit plans that protect patients from high out-of-pocket costs.

Blue Cross also supports many of the recommendations of the governor’s task force, including, but not limited to:

Requiring drug manufacturer transparency reports
Limiting the use of coupons when a lower-cost generic drug is available.
Penalizing unsupported price increases
Supporting the concept of a prescription drug emergency fund
Supporting the concept of prescription drug tax credits

“Broadly, we support items that will help bend the cost curve on prescription drug prices, and transparency is our top priority, as we think that will give us insight into additional policy solutions,” said Kangas-Kraft.

Kangas-Kraft is hopeful that the task force’s policy suggestions, such as transparency measures, will be considered when a new legislative package is reintroduced and deliberated on during the 2021-22 legislative session.

“We appreciate the governor and legislature’s continued commitment to addressing prescription drug costs and supporting the work of this task force,” Antonelli added.

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