BILL ANALYSIS
AB 1826
Page 1
ASSEMBLY THIRD READING
AB 1826 (Huffman and Feuer)
As Amended May 28, 2010
Majority vote
HEALTH 11-6 APPROPRIATIONS 12-0
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|Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Ammiano, |
| |Caballero, Eng, Hayashi, | |Bradford, |
| |Jones, Bonnie Lowenthal, | |Charles Calderon, Coto, |
| |Nava, | |Davis, Monning, Ruskin, |
| |V. Manuel Perez, Salas | |Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Fletcher, Conway, | | |
| |Emmerson, Gaines, Smyth, | | |
| |Audra Strickland | | |
| | | | |
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SUMMARY : Requires a health plan or health insurer that covers
outpatient prescription drug benefits to provide coverage for a
drug that has been prescribed for the treatment of pain and
prohibits the health plan or health insurer from requiring the
subscriber or enrollee to first use an alternative prescription
drug or over-the-counter drug, as specified. Specifically, this
bill :
1)Requires a health plan or health insurer that covers
outpatient prescription drug benefits to provide coverage for
a drug that has been prescribed by a participating licensed
health care provider for the treatment of pain.
2)Prohibits the health plan or health insurer pursuant to 1
above from requiring the subscriber or enrollee to first use
an alternative prescription drug or over-the-counter drug but
allows the health plan or health insurer to require the
subscriber or enrollee to first use a generically equivalent
drug.
3)Defines, for purposes of this bill, "generically equivalent
drug" to mean drug products with the same active chemical
ingredients of the same strength, quantity, and dosage form,
AB 1826
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and of the same generic drug name, as determined by the United
States Adopted Names Council and accepted by the federal Food
and Drug Administration, as those drug products having the
same chemical ingredients.
4)Provides that nothing in this bill prohibits a health plan or
health insurer from charging co-payments or deductibles for
prescription drug benefits or imposing limitations on maximum
coverage of prescription drug benefits, as specified.
5)Exempts a health plan or health insurance policy purchased by
the California Public Employees' Retirement System (CalPERS)
from the requirements of this bill.
6)Prohibits this bill from being construed to require coverage
of prescription drugs not in a health plan's or health
insurer's drug formulary or to prohibit generically equivalent
drugs or generic drug substitutions, as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, unknown increased costs to Medi-Cal and the Healthy
Families Program in the range of $5 million (50% General Fund
(GF) and 33% GF, respectively). Although recent amendments
address brand name drug cost pressures, drugs that remain under
patent do not have generic versions available. Unknown
increased costs in the private insurance market in the range of
$5 million to the extent this bill increases drug expenditures
by reducing patient access problems related to specified
medications.
COMMENTS : The author states that p ain is a growing national
public health crisis that affects an estimated 76 million people
and has serious economic ramifications. Chronic pain affects
more Americans than diabetes, heart disease, and cancer
combined. A ccording to the author, a troubling and dangerous
trend occurring with health plans is frequent denial of coverage
to policyholders for proven and effective pain treatments. Used
as a cost-saving measure, many health plans utilize step therapy
or "fail first" policies which require a pain patient to try an
alternative medication, which in some cases include
over-the-counter medications, before the medication recommended
by the physician is approved. The author points out that s ome
patients are required to try up to five different medicines
before receiving the one prescribed by their physician, and ,
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more often than not, the alternative drugs have a completely
different molecular structure that can harm patients. The
author asserts that n ot only is this policy extremely dangerous
to patient health, step therapy can actually increase the direct
cost of healthcare in the long run due to increased emergency
room visits, unplanned doctor's visits, and other health
complications. Indirect costs include lost wages and
productivity of both people with pain and their caregivers. The
author believes that it is essential that pain patients receive
the drug treatment prescribed by their physicians and do not
suffer the needless consequences caused by step therapy.
In its analysis of this bill, CHBRP noted that, throughout its
report, it uses the phrase "fail-first protocols" to reference
the group of utilization management techniques that would be
prohibited by this bill for pain medications. CHBRP reported
that in the use of fail-first protocols as methods of
utilization management for coverage of pain medications through
outpatient pharmacy benefits, there appears to be no pattern
among health plans regulated by the Department of Managed Health
Care and health insurers regulated by the California Department
of Insurance. CHBRP also found no medical effectiveness
literature addressing the direct effects of fail-first protocols
on resolving or controlling pain. Additionally, CHBRP found
insufficient evidence to characterize the medical effectiveness
of fail-first protocols for pain medications. Therefore, CHBRP
concluded that the impact of this bill on the medical
effectiveness of pain treatment is unknown and the lack of
evidence for the effectiveness of fail-first protocols is not
evidence that these protocols produce either positive or
negative health outcomes.
According to CHBRP, of the 97.2% who have outpatient pharmacy
benefit coverage, about 8.3 million enrollees (45.5%) have
benefit coverage subject to fail-first protocols for one or more
pain medications; about nine million enrollees (49.3%) have
benefit coverage that is not subject to fail-first protocols and
not affected by this bill; 417,000 enrollees (2.2%) have
generic-only outpatient pharmacy benefit coverage and would not
be affected by this bill since generic medications are not
generally present on fail-first protocol lists; and, 521,000
enrollees (2.8%) do not have outpatient pharmacy benefit
coverage and would not be affected by this bill. CHBRP
confirmed that a portion of beneficiaries of Medi-Cal, the
AB 1826
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Healthy Families Program, Access for Infants and Mothers
Program, and the Major Risk Medical Insurance Program have
outpatient pharmacy benefits for pain medication subject to some
fail-first protocols. However, as was found to be the case for
privately funded health insurance, the presence of fail-first
protocols and the lists varied by plan. CHBRP reports that this
bill is expected to affect the percentage make up of filled pain
prescriptions in terms of generic versus brand name medications.
Additionally, CHBRP reports that, although there is some
evidence that fail-first protocols can lead to lower levels of
patient satisfaction, delays in receiving medications, and
higher rates of unfulfilled prescriptions, this research is not
generalizable to populations outside of those studied.
Therefore, the public health impact of this bill is unknown.
Chronic pain advocacy groups, health care professionals,
community groups, and labor organizations support this bill
because it will ensure that patient have access to the right
treatment at the right time. The sponsor of this bill, For
Grace, writes that this bill highlights the inadequacies of step
therapy because a pain patient can tell immediately whether or
not a pain medication is working and should not be forced to
stay on medicine that does not relieve their pain. The American
Chronic Pain Association asserts that treatment decisions should
rely on the physician's clinical expertise, patient's health
history, and the best scientific evidence available, rather than
driven by cost. The Community Life Improvement Program adds
that applying step therapy protocols rigidly to a pain patient
is not in the patient's best interest especially when women are
more likely than men to be undertreated for their pain and
minorities receive even less quality of care. The Association
of Northern California Oncologists and California Medical
Association support this bill because it will remove roadblocks
and obstacles that prevent patients with pain from receiving the
medically necessary, reasonable, and most appropriate pain
management and treatment options prescribed by their physicians,
who best understand their patients' health needs. Labor groups
point out in support that it is fundamentally unfair to permit
patients to suffer unnecessary pain in the hopes that a cheaper
drug will be as effective as the medication their physicians
actually prescribe and they argue that, in the long run, there
is no convincing evidence that step therapy actually even saves
money.
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Health plans, health insurers, and pharmacy benefit managers
(PBMs) object to this bill. America's Health Insurance Plans
argues that this bill not only fails to further advance the
goals of patient safety and quality of care, but threatens the
ability of health plans to ensure their enrollees are prescribed
the correct course of treatment in clinically appropriate
amounts. The California Association of Health Plans writes in
opposition that requiring coverage for any prescribed pill or
other medication for pain is highly questionable, particularly
when the ability of a plan to encourage safe alternatives is
also eliminated. Molina Healthcare of California, a managed
care plan serving beneficiaries in Medi-Cal and Healthy
Families, notes in opposition that by requiring coverage of any
prescribed pain drug despite cheaper alternatives, this bill
would increase costs to health plans that serve government
programs without any evidence that care would be improved.
PBMs, including Medco Health Solutions, Inc., and Express
Scripts, Inc., maintain that implementation of a well-designed
step therapy program ensures that patients receive appropriate
medications in a cost effective manner, while reducing waste,
error and unnecessary drug use. PBMs contend that prohibiting
the use of this key drug management tool for pain medications
will make it more difficult to manage the costs of prescription
drugs and increase premium and co-payment costs for all
patients. The California Association of Joint Powers
Authorities objects to the exemption provided to CalPERS from
complying with this bill because it ignores that all local
public entities will be forced to absorb the prescription
coverage cost increases resulting from this bill.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097
FN: 0004642