Gov. Whitmer Signs Bills to Lower Drug Costs for Michiganders, Hold Greedy Companies Accountable

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By Keya Vakil

February 23, 2022

“This legislation is a step towards a Michigan where no family will have to choose between filling a prescription or putting food on the table,” said Detroit-area senior Nancy Courtney.


Need to Know

  • The bills will lower the cost of medications, increase transparency into drug prices, and ensure that pharmacists can provide honest information about pricing options.
  • They also increase regulations on pharmacy benefit managers and prevent them from driving up prices for consumers.
  • 32% of Michiganders ages 19-64 stopped taking their medication as prescribed due to cost in 2017. In January, the price of 804 drugs rose by an average of 5%, according to goodRx.

MICHIGAN—Michiganders will soon pay less for prescription drugs, thanks to a package of new bills signed into law by Democratic Gov. Gretchen Whitmer on Wednesday.

Appearing inside a Lansing-area Meijer store, Whitmer signed House Bills 4348, 4351, and 4352, which lower the cost of medications, increase transparency into drug prices, and ensure that pharmacists can provide honest information about pricing options. The bills also increase regulations on pharmacy benefit managers (PBMs)—companies that manage prescription drug benefits on behalf of health insurers, Medicare drug plans, large employers, unions, and other payers—and prevent them from driving up prices like they have in the past. 

PBMs serve as the middlemen between insurance companies, pharmacies, and drug manufacturers. In theory, PBMs are supposed to negotiate with drug makers and pharmacies to lower drug costs for insurers and insurance companies, with savings being passed onto consumers. In reality, PBMs have often passed them onto insurance companies or found creative ways to keep them for themselves. 

“For too long, unlicensed pharmacy benefit managers have been able to engage in practices that drive up costs for Michiganders whose lives and health depend on critical prescription drugs like insulin,” Gov. Whitmer said in a statement. “This bill brings much-needed transparency to our healthcare system and is a testament to what we can do when we put Michiganders first.”

Prescription drug prices have risen dramatically in recent years, far outpacing inflation as drug companies and PBMs recorded massive profits

The average cost of prescription drugs increased by nearly 60% between 2012 and 2017, while Michiganders’ incomes increased only 11%, according to a report from Whitmer’s Prescription Drug Task Force. The price increases were so devastating for Michiganders, that among residents ages 19-64, 32% stopped taking their medication as prescribed due to cost in 2017. In January, the price of 804 drugs rose by an average of 5%, according to goodRx, with many rising by substantially more. 

RELATED: Michigan Leaders Want to Lower Insulin Prices by 80%. Here’s How.

The bills, which cleared the House and Senate on a bipartisan basis, are based on recommendations from Whitmer’s task force. The suite of bills was praised by Nancy Courtney, a Detroit-area senior. 

“As a senior and in my volunteer work with Detroit Area Agency on Aging and St. Frances Cabrini Clinic in Detroit, I personally know the impact of prescription drug costs,” Courtney said. “This legislation is a step towards a Michigan where no family will have to choose between filling a prescription or putting food on the table.”

Here’s what each of the bills do to make drugs more affordable for Michigan families:

  • HB 4348 requires PBMs to get a state license in Michigan, bans them from driving up drug costs, prevents them from requiring pharmacists to talk to patients only about certain drugs, and requires them to file transparency reports with the Michigan Department of Insurance and Financial Services.
  • HB 4351 prevents PBMs from charging patients a co-pay that is higher than the cost of a drug, bans PBMs from discriminating against pharmacies solely because the PBM doesn’t have a vested interest in the pharmacy.
  • HB 4352 allows pharmacists to inform patients about the price differences between generic and brand name drugs and bans them from entering into contracts that limit their ability to discuss drug prices. 

Meijer President and CEO Rich Keyes championed the changes. 

“Meijer cares about the communities we serve and are proud to support this legislation, which will help lower the costs of quality medications for our 2.2 million Michigan pharmacy customers,” Keyes said in a statement. “This bill makes pricing practices fairer, increases transparency, and helps our customers afford the medications they need to live healthy lives.”

Author

  • Keya Vakil

    Keya Vakil is the deputy political editor at COURIER. He previously worked as a researcher in the film industry and dabbled in the political world.

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