Lawmakers heard testimony Monday on a bill that would capitalize on Medicare’s new authority to negotiate prescription drug prices with manufacturers by applying any of those price caps to private insurers in Maine.

The Inflation Reduction Act, approved by Congress and signed into law by President Biden last year, allows Medicare to negotiate prescription drug prices, a long-sought reform. The local bill, sponsored by Sen. Cameron Reny, D-Bristol, seeks to piggyback on that by prohibiting private insurance companies from charging patients more than the negotiated Medicare rates for those prescription drugs.

“By setting the price negotiated by Medicare as the maximum price that state-regulated insurers can pay, we extend the benefits of federal negotiations to our state, ensuring that our citizens are not left behind in the pursuit of affordable healthcare,” Reny said in testimony before the Health Coverage, Insurance and Financial Services committee. “Prescription drug costs have been a persistent issue for many Mainers, particularly our older Mainers, those with disabilities, people with chronic illness, and lower-income families.”

Reny said Maine people have been “shouldering an immense burden due to the high cost of prescription medications.”

“This burden often forces them to make difficult choices: whether to adhere to a prescribed regimen or cut pills in half to save money, whether to pay for food or medicine, or whether to risk their health due to financial constraints,” he said.

But Leslie Wood, regional vice president of state policy for the Pharmaceutical Research and Manufacturers of America, said in a statement that if the Maine law is approved, some medications would be removed from the Maine market.

“Enacting price controls could restrict patients’ access to medicines and reduce the availability of life-saving therapies in Maine,” Wood said. “Specifically, if a pharmacy or provider cannot obtain a medicine at the government price, the medicine will not be available to Maine residents.”

The federal law won’t be implemented until September 2024, and will begin with a list of 10 expensive drugs up for price negotiation. The new rates would go into effect by 2026. In future years, Medicare will negotiate prices for 50 or more of the most-expensive medications.

Kate Ende, public policy director for Consumers for Affordable Health Care, said that while the list of drugs Medicare will initially negotiate is unknown, the Maine Health Data Organization’s 25 most-expensive drugs cost $757 million in the fiscal year ending in June 2022.

The three costliest drugs, according to Maine Health Data, cost $15,000 or more per prescription. Those medications – Stelara, Trikafta and Imbruvica – treat Crohn’s disease and ulcerative colitis, cystic fibrosis, and leukemia and other cancers.

Ende said another drug, Eliquis, which treats and prevents blood clots, costs $824 per prescription. Because it is in such wide use, it is projected to be one of the first drugs regulated by Medicare. Eliquis, in one year, racked up $93 million in prescription costs in Maine.

The cost borne by patients for expensive medications depends on their health insurance plan. But if a patient has a high-deductible plan, or one with less generous prescription coverage, they can be on the hook for thousands of dollars per prescription.

In addition to drug manufacturers, insurance industry officials and the Maine Bureau of Insurance testified against the bill.

Benjamin Yardley, senior attorney for the Maine Bureau of Insurance, opposed the legislation for several logistical reasons, including enforcement of $1,000 fines against insurance companies that don’t adhere to the negotiated rate.

“Applying the reference (negotiated rate) pricing requirement only to the purchasers of drugs, not to the sellers, raises the question whether penalizing purchasers is fair, particularly if the referenced drug is needed for a plan to meet the needs of plan members,” Yardley said.

He also said the bill “could result in a situation where no one is willing to sell the drug at a price the carrier or state agency is permitted to pay.”

Under the proposal, drug manufacturers would be prohibited from removing medications from the market to avoid paying the Medicare rate, but Yardley questioned whether that part of the bill is legal. The bill would also apply only to state-regulated plans, so some employers who offer self-insured plans not regulated by the Maine Bureau of Insurance would be exempt.

Lawmakers will discuss the bill at a future work session ahead of any votes.

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