BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 961|
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THIRD READING
Bill No: SB 961
Author: Wright (D), et al
Amended: 4/27/10
Vote: 21
SENATE HEALTH COMMITTEE : 5-0, 4/21/10
AYES: Alquist, Leno, Negrete McLeod, Pavley, Romero
NO VOTE RECORDED: Strickland, Aanestad, Cedillo, Cox
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Health care coverage: cancer treatment
SOURCE : Author
DIGEST : This bill prohibits health care service plan
contracts and health insurance policies, which provide
coverage for oral cancer medications, from charging
co-payments for the medication in excess of 200 percent of
the lowest co-payment required by the plan or policy for
brand name medications. This bill exempts the Public
Employees' Retirement System plans.
ANALYSIS : Existing law provides for the regulation of
health care service plans by the Department of Managed
Health Care (DMHC) and regulation of disability insurers
who sell health insurance by the California Department of
Insurance (CDI).
Existing law requires health care service plan contracts
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and health insurance policies to provide coverage for all
generally medically accepted cancer screening tests and
requires those plans and policies to also provide coverage
for the treatment of breast cancer.
Existing law imposes various requirements on contracts and
policies that cover prescription drug benefits, such as a
requirement to cover "off-label" uses and a requirement to
cover previously prescribed drugs, as specified.
Existing law authorizes DMHC to regulate the provision of
medically necessary prescription drug benefits by a health
care service plan to the extent that the plan provides
coverage for those benefits. Existing regulation requires
health plans providing outpatient prescription drugs to
provide all medically necessary prescription drugs, except
as specified in that regulation.
This bill
1. Prohibits health care service plan contracts and health
insurance policies issued, amended as renewed on or
after January 1, 2011, which provide coverage for oral
cancer medications, from charging co-payments for oral
cancer medications above 200 percent of the lowest
co-payment required by the plan or policy for brand name
medications on the plan or policy's formulary.
2. Clarifies that it does not:
A. Prohibit a plan or policy from requiring prior
approval or authorization for the use of oral
cancer medications.
B. Require a plan or policy to provide coverage for
any additional medication than already required by
law. The bill specifies that nothing in this bill
shall prohibit a health care service plan from
providing differential cost-sharing between generic
and nongeneric orally administered cancer
medication.
3. Defines "co-payment" means a flat dollar amount an
enrollee pays, out-of-pocket, at the time of receiving a
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health care service or when paying for a prescription,
after any applicable deductible. The term shall not be
construed to include any other forms of cost-sharing.
4. Exempts the California Public Employees' Retirement
System plans or policies.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/7/10)
American Cancer Society
BayBio
California Communities United Institute
California Healthcare Institute
California Medical Association
Cancer Legal Resource Center
Carrie's Touch
Disability Rights Legal Center
International Myeloma Foundation
Leukemia & Lymphoma Society
Oncology Nursing Society
Susan G. Komen for the Cure
Central Valley
Inland Empire
Los Angeles County
Orange County
Sacramento Valley
San Diego
San Francisco Bay Area
OPPOSITION : (Verified 5/7/10)
Association of California Life and Health Insurance
Companies
Blue Shield of California
California Association of Health Plans
California Chamber of Commerce
Health Net
Medco Health Solutions, Inc.
ARGUMENTS IN SUPPORT : The American Cancer Society
supports this bill because patients using oral chemotherapy
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generally experience milder side effects. Many of these
oral chemotherapy treatments do not have intravenous
counterparts, making the need to ensure access to them
critical.
The California Healthcare Institute (CHI), an advocacy
organization of biotechnology companies and academic
research institutions, supports this bill, stating that CHI
member companies are at the heart of biomedical research
that has lead to discoveries to treat diabetic neuropathy
and other complications from diabetes. These treatments,
when administered after early detection, can prevent
amputations. CHI further points out that these treatments
are only effective when patients have access to them.
The California Medical Association (CMA) supports the bill,
stating that oral chemotherapy improves the quality of life
for cancer patients, such as producing milder side effects,
and avoiding the need for transportation back and forth
from chemotherapy appointments. CMA further states that,
because chemotherapy is administered in different ways and
the choice of delivery depends on many factors, this bill
would ease some of the difficult choices cancer patients
face by protecting patient choice when making treatment
decisions.
The Disability Rights Legal Center and the Susan G. Komen
Foundation both support the bill, stating that there is a
significant difference in the amount cancer patients must
pay out of pocket for an oral drug instead of an
intravenous drug. This is echoed by the International
Myeloma Foundation, which argues that insurance policies
discourage the use of oral drugs when they are medically
appropriate. The Oncology Nursing Society writes in
support, stating that many oral anti-cancer drugs have
fewer side effects than infused therapies.
ARGUMENTS IN OPPOSITION : Opponents argue that "SB 961
does not do anything to stem the increase of prescription
drugs. Rather it sets the rate for one class of drugs,
thereby creating an unequal benefit category that
artificially sets rates for oral chemotherapy medications
lower without requiring manufacturers to charge less for
these high cost drugs. Anthem Blue Cross further states
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that these costs must be borne somewhere, with the most
likely result being higher overall premium costs for
employers and consumers. This legislation could also set a
precedent to limit insurers' ability to manage care and
provide best value to members."
The Association of California Life and Health Insurance
Companies opposes this bill and points out that, with
health insurers poised to implement federal health reform,
one of the most expansive pieces of health care legislation
at the federal level, this bill is unnecessary and
untimely.
Blue Shield of California opposes the bill, arguing that
carving out one type of medication from the rest of a
health plan's pharmacy benefits is not good public policy.
If enacted, Blue Shield believes that pharmaceutical
companies will continue to pursue legislation that
guarantees government set retail rates for their most
expensive drugs.
RJG:do 5/7/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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