BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1826
                                                                  Page  1

          Date of Hearing:   May 19, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   AB 1826 (Huffman) - As Amended:  April 28, 2010 

          Policy Committee:                              Health Vote:11-6

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No 

           SUMMARY  

          This bill requires health plans and health insurers to provide  
          coverage for a medication prescribed for pain without first  
          requiring a patient to use an alternative prescription or  
          over-the-counter product. 

          By establishing this mandate, this bill prohibits the use of  
          "step therapy" or "fail-first" protocols. Step therapy is the  
          practice of beginning drug therapy with the most cost-effective  
          and safest drug therapy and progressing to other more costly or  
          risky medications, as necessary. Fail-first protocols require  
          proof a patient has tried other medications before the preferred  
          medication is approved. 

           FISCAL EFFECT  

          1)According to the California Health Benefits Review Program  
            (CHBRP) annual increased costs to Medi-Cal and the Healthy  
            Families Program, combined, of more than $10 million (50% GF  
            and 33% GF, respectively). The bill exempts CalPERS from the  
            requirements established by this bill. 

          2)Increased premium costs in the private insurance market of  
            more than $11 million. 

          3)Recent amendments were adopted to address cost concerns  
            related to the bill being construed as prohibiting generic  
            drug substitutions. According to a subsequent review by CHBRP  
            of the bill and amendments, the cost impacts remain unchanged.  


           COMMENTS  








                                                                  AB 1826
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           1)Rationale  . This bill is sponsored by For Grace, a group  
            focused on increasing awareness of the gender disparity women  
            experience in the assessment and treatment of pain.  According  
            to the author and sponsors, some patients are required to try  
            up to five medications prior to being prescribed a recommended  
            pain drug. The author indicates these treatment decisions  
            should be left up to provider and patient, not the health plan  
            or insurer. 

           2)Background  . Health plans and pharmacy benefit managers use  
            strategies such as step therapy and fail-first protocols to  
            balance cost, quality, and utilization concerns. Cost control  
            and clinical considerations include proof of medication  
            intolerance, prevention of unapproved use, and adherence to  
            clinical guidelines. Step therapy requires a patient to try a  
            specified medication, often a generic alternative, prior to  
            receiving coverage for a second-line medication. A fail-first  
            protocol may require a patient to confirm to a health plan  
            that alternate medications have been unsuccessfully tried by  
            the patient before the preferred medication is covered.  
            According to CHBRP, of the more than 200 prescription drugs  
            used to treat pain, 54 are subject to first-fail protocols for  
            a portion of insured patients.

           3)Focus on Pain Medication  . This bill singles out a cohort of  
            prescription medications, those used to treat pain. There are  
            several hundred different medications used to treat pain  
            associated with numerous medical conditions. Included in this  
            group of medications are potent, potentially addictive and  
            dangerous drugs, including narcotics. Narcotics are  
            increasingly associated with addiction and overdose.  
            Strategies such as step therapy and first-fail protocols  
            provide tools to ensure these kinds of medications are taken  
            safely and conservatively. This bill reduces methods available  
            to manage access to specified medications. 

           4)Concerns  . Health plans, insurers, and pharmacy benefit  
            managers (PBM) are opposed to this bill. Opponents indicate  
            requiring coverage for prescriptions without allowing for safe  
            management in the course of treatment is problematic. Insurers  
            indicate the use of step therapy and first-fail protocols help  
            manage medication management and adherence. Pharmacy benefit  
            managers maintain that implementation of a well-designed step  
            therapy program ensures that patients receive appropriate  








                                                                  AB 1826
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            medications in a cost effective manner, while reducing waste,  
            error and unnecessary drug use.  
           
          5)Other Health Mandates in the Current Session  . There are nine  
            health mandates under legislative consideration this year,  
            including AB 1826. Other proposed health mandates include: 

             a)   AB 1600 (Beall): mental health parity 
             b)   AB 1825 (De La Torre): maternity services 
             c)   AB 1904 (Villines): out-of-state carriers
             d)   AB 2587 (Berryhill): benefit mandates
             e)   SB 220 (Yee): tobacco cessation services
             f)   SB 890 (Alquist): basic health treatment services
             g)   SB 961 (Wright): cancer treatment
             h)   SB 1104 (Cedillo): diabetes related treatment

           6)Related Legislation  . AB 1104 (Price) in 2009 required health  
            plans and health insurers to submit written reports about step  
            therapy each year to the California Department of Managed  
            Health Care (DMHC) and the California Department of Insurance  
            (CDI).  AB 1104 was held on the Suspense File of this  
            committee. 
           
          Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081