PCMA: New Washington State Mandate Will Raise Prescription Drug Costs for State Programs, Employers, Unions

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S.B. 5857 Could Increase Rx Costs for Medicaid, State Employee Plan by up to $113 Million Annually

A bill (S.B. 5857) in the Washington legislature would force employers, unions, taxpayers, and public programs to pay drugstores more for prescription drugs, the Pharmaceutical Care Management Association (PCMA) said today.

A fiscal analysis by the Office of Financial Management asserts that just one provision of the bill could increase costs to Medicaid, the Public Employees Benefits delivery system and consumers by up to $113 million annually. The analysis did not factor in the additional costs the mandate would impose on local employers and unions that offer prescription drug benefits.

S.B. 5857 requires public programs, employers and unions to pay top dollar for prescription drugs even when more affordable alternatives are available. The fiscal analysis states that the bill could “significantly” increase costs, make plans “less effective at controlling costs” and “reduce the incentive for pharmacists to purchase the least expensive pharmaceutical available.”

“Considering how much this raises costs for state programs one can only imagine the impact it will have on local employers that offer benefits,” said PCMA President and CEO Mark Merritt. “Despite its costs, the bill offers no clear upside for consumers, either.”

Specifically, S.B. 5857 would:

  • Force employers, unions, consumers and public programs to pay drugstores more for prescription drugs.
  • Reduce the incentive for pharmacists to purchase the least expensive pharmaceutical available.
  • Grant unprecedented legal authority empowering the Office of the State Insurance Commissioner to undermine contract agreements between plans and drugstores.

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