HOUSE CONCURRENT RESOLUTION 135

(By Delegate Hill and Delegate Pack)

[Introduced February 29, 2020]

Requesting a study of prescription drug transparency laws, including reports on data submitted by health insurers, manufacturers, and pharmacy benefit managers.

Whereas, five states (California, Nevada, Maine, Oregon, and Vermont) have published reports identifying specific drugs that are high cost, for which costs are rising fasts, and and/or that are most frequently prescribed; and

Whereas, California, Vermont, and Oregon have reported impacts of retail prescription drug costs on insurance premiums, averaging 13 percent in California (before accounting for manufacturer rebates, which averaged 10.1 percent of insurers’ retail drug costs) in 2017, 15.67 percent of premiums in Vermont in 2018 (before accounting for rebates), and up to 18 percent of premiums in Oregon (after accounting for rebates) in 2018; and

Whereas, requiring both manufacturers and PBMs to report allows states to track drug pricing along the supply chain; and

Whereas, production costs accounted for 29 percent of manufacturers’ estimated average revenue in 2018 for essential diabetes drugs after rebates. Administrative costs and profit each accounted for 25 percent. On average, manufacturers earned $42 in profits for every $100 spent on production and administrative cost for these drugs; and

Whereas, financial assistance to consumers accounted for 14 percent of the manufacturers’ estimated total revenues after rebates, although most manufacturers reported offering no financial assistance; and

Whereas, West Virginia shares concerns about the affordability of many of the same drugs; and

Whereas, understanding pricing across the entire supply chain, from the manufacturer to the consumer, is critical. Reporting that uses consistent concepts and measures can foster mutual understanding of facts among policymakers and stakeholders in a complex system; therefore, be it

Resolved by the Legislature of West Virginia:

That the Joint Committee on Government and Finance is hereby requested to conduct a study to understand drug pricing across the entire supply chain, from the manufacturer to the consumer, for drugs that drive increases in health insurance premiums and consumer costs; and, be it

Further Resolved, that the Joint Committee on Government and Finance report to the Legislature, on the first day of the regular session, 2021, on its findings, conclusions and recommendations together with drafts of any legislation to effectuate its recommendations; and, be it

Further Resolved, that the expenses necessary to conduct this study, to prepare a report and to draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance.