Assembly Health Committee passes bills on Rx prices, substance abuse treatment, and nursing facilities

On Jan. 11, the California Assembly Health Committee had their first meeting of the 2022 session and discussed a number of bills, many of which moved out of the health committee and into Appropriations.

 

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Below are some highlights from the committee’s discussion on some of this legislation. 

Assembly Bill (AB) 933 was first introduced in Feb. 2021 by Asm. Tom Daly (D – Anaheim), which would work to improve prescription drug cost-sharing and transparency between health plans and consumers. The bill would require an insured consumer’s defined cost sharing for each prescription drug to be calculated at the point of sale based on a price that is reduced by an amount equal to 90% of all rebates receivedor to be receivedin connection with the dispensing or administration of the drug. 

The bill requires a health care service plan or health insurer to provide each of their enrollees a good faith estimate of their decrease in cost sharing at the point of sale and provide that information to the dispensing pharmacy. 

The Department of Health Care Services (DHCS) would be required to report on the impact of these provisions on drug prices and health care premium rates. The bill would repeal these provisions on Jan. 1, 2026.

Daly said this bill would be critical to lowering prescription drug costs for consumers.

“Manufactured drug rebates in California totaled approximately 1.4 billion dollars in 2020. That figure represents over 14% of the total amount spent on prescription drugs in our state. On average, drug rebates result in PBMs and insurers paying 40% less than the list price of the medication. Sadly, there is no evidence that these savings are shared with consumers.”

Dr. Le Ondra Clark Harvey spoke in support of the bill on behalf of the California Access Coalition, stating that AB 933 would save at least 836,000 Californians nearly $71,000,000 this year alone, “…by correcting a regulatory oversight that has allowed prescription drug rebates paid by pharmaceutical manufacturers to go to health insurers and pharmacy benefit managers profits rather than consumers for which they are intended to help. The savings to PBMs and insurers under the current rebate system are significant … in 2019 alone, PBMs in the U.S. negotiated $89.5 billion in rebates alone … While PBMs and insurers make billions, patients often end up paying more for the prescription than the PBM and the insurer paid for it.”

Nick Luizos spoke in opposition to the bill on behalf of the California Association of Health Plans, stating how the costs to employers, employees, and consumers would far outweigh the benefits.

“[The California Health Benefits Review program] concluded that this bill would increase premiums in the first year by $200 million for employers and individuals at Covered California. This cost is almost 3 times the purported $70 million benefit that will be experienced by some consumers. In other words, consumers will collectively pay more so that some might pay less, and we don’t believe that this pencils out … It leads to a prioritization of expensive brand-name drugs over lower cost alternatives like generics …”

The Committee ultimately voted to pass the bill (8-0) and move it on to the Appropriations Committee.

AB 1502, or the Skilled Nursing Facility Ownership and Management Reform Act of 2022, was also originally introduced in Feb. 2021 by Asms. Al Muratsuchi (D – Rolling Hills Estates) and Jim Wood (D – Santa Rosa).

The bill would prohibit a person, organization, or other governmental agency within the state from acquiring and operating a freestanding skilled nursing facility without first obtaining a license from the California Department of Public Health.

Muratsuchi referenced the rising number of California nursing home managers who are failing to properly care for their elderly individuals.

“… Nursing homes for too long … have operated with unlicensed owners and operators, and owners of the chains of nursing homes here in the state of California are allowed to purchase new facilities, new nursing homes despite their lengthy and well-documented history of violations.”

Asm. Kevin McCarty (D – Sacramento) and Cecilia Aguiar-Curry (D – Winters) both made comments in strong support of the bill while also calling for improved data on employees at nursing home facilities. 

Tony Chicato spoke in support of the bill on behalf of the California Advocates for Nursing Home Reform, stating:

“The system allows anyone to take over a nursing home … and provide care to thousands of vulnerable residents, all while the state approval is pending … [Nursing home squatters] have worse staffing, more deficiencies, and lower government ratings … Unsurprisingly, squatter facilities have had some of the worst COVID-19 outbreaks and the highest number of COVID deaths.”

Wood said CDPH has agreed to engage with them on this process as the bill moves forward. He expects to get technical support from the CDPH prior to the bill being heard in the Senate. The bill passed (9-0) and has moved back into the Appropriations Committee.

Another notable bill discussed in the meeting was Sen. Scott Wiener’s (D – San Francisco) Senate Bill (SB) 57, first introduced in Dec. 2020 and passed by the Senate in April 2021. The bill would establish overdose prevention programs, including safe consumption zones and sterile consumption supplies, in San Francisco, Los Angeles, and Oakland. 

Staff at these zones would closely monitor participants for potential overdoses and provide care as needed. These staff would also provide access to substance use disorder treatment services, infection prevention and testing, and overdose prevention education. 

Wiener noted that these safe consumption sites have been rigorously researched and studied and have been shown to reduce health and safety problems associated with drug use.

“California is in the midst of an unprecedented overdose crisis … and it has to be treated as a public health crisis. In the context of COVID-19, we know that in the last few years, overdoses and overdose deaths have gotten worse.”

Several stakeholders spoke in support of the bill, including Vitka Eisen, on behalf of HealthRIGHT 360 (one of the bill’s sponsors), emphasizing the need for addiction treatment to evolve beyond criminalization and incarceration. 

“From a treatment provider perspective, overdose prevention programs have two critical purposes: to reach those whom we have not reached, and to prevent people from dying before we can reach them … As a long-time treatment provider, we see these services as a missing element in the continuum of treatment services. Criminalization and incarceration are demonstrably failed policy responses to addiction, overflowing our prison populations, and disproportionately negatively impacting Black and brown communities.”

Many members of the public opposed the bill, including Tak Allen, president of International Faith-Based Coalition and President of the Congress on Racial Equality. She criticized the lack of requirement for safe consumption zone participants to engage in behavioral health treatment as a condition of participating.

“This bill … adds to and permits the perpetuation of problems communities of color struggle with while taking a surface-level approach to resourcing that sounds better in theory, but will have harmful byproducts and minimal mitigation in practice. True harm reduction is not as simple as making a safe space to utilize drugs … Unfortunately, this bill is not necessarily addressing the underlying behavioral causes that lead to substance abuse, but it’s also not requiring that each person that enters these centers utilizes proper treatment, counseling, rehabilitation services …”

The Committee passed the bill (10-0) and referred it to the Committee on Public Safety.