House Insurance and Commerce Committee

February 15, 2023

Rep Maddox: First bill we’re going to hear today is SB192. Representative Achor, would you like to come to the table? If you would, just introduce yourself and you may proceed with your presentation.

Rep Achor: Thank you, Mr. Chairman. I’m Representative Achor. I’m the lead House sponsor on Senate Bill 192, along with fellow pharmacist, Senator Justin Boyd. So I am excited to present a bill that is essentially clean-up language that allows for an increase in definitions in the current Step Therapy Act. It’s a small amendment to that act that will create a massive cost-saving impact for patients.

Essentially, what we’re trying to do here is recognize a new definition of drugs, which is biosimilars. So for all intents and purposes, biosimilars you can think of as generics as far as how they’re considered. So their safety profile, their efficacy, everything that has to go into how they are effective. So their potency, are all registered with the FDA as being cleared products. So my best analogy is in the current state when it comes to step therapy, insurance companies will often list a singular product that a patient has to fail therapy with before they’ll advance to a more costly or newer product.

So in an analogy when it comes to vehicles before an insurance company will pay for a semi-truck, they will list that you must fail therapy with a Ford pickup truck. Some patients will come to them and say I’ve been driving a Chevy pickup truck for the last 5 years that has just failed its use. And no physician finds value in switching from a Chevy to a Ford. And this will allow the insurance company to recognize those years of therapy in the Chevy truck to allow them to move forward with therapy. And with that, I welcome questions concerning these products.

Rep Maddox: Thank you, for your presentation, Representative. Do I have any questions by the Committee?

Rep Brown: I do.

Rep Maddox: Vice-Chair, Brown, you’re recognized for a question.

Rep Brown: Thank you, Mr. Chair. Representative Achor, when you’re comparing Ford and Chevy, are you referring to one is like the name brand and the other is the generic?

Rep Achor: No ma’am. Those would be considered generics in this analogy. So with biosimilars, the reason that the definition of generics cannot be applied to them currently is because biosimilar products, such as insulin or immunotherapy treatments, are very complex in size and they’re actually grown out of bacteria or live living cells. Whereas generic drugs by definition are synthesized in a lab similar to like mixing ingredients together. So that’s why the definition of generic conceptually applies here but literally doesn’t if that makes sense.

Rep Brown: Well, can I rephrase my question? So are you saying that if you’ve got two drugs that are biosimilar, and one of them is not working, then you move to the name brand?

Rep Achor: You would move to–

Rep Brown: The more expensive one, the new drug?

Rep Achor: Not necessarily the name brand because the name brand in that analogy would be equivalent to what they’ve already failed. This would be they’re able to move to a new product altogether that is more expensive, or for whatever purposes, the insurance company has deemed a step three.

Rep Brown: So it’s a different formulation?

Rep Achor: Correct. So patients who have failed therapy with the Ford truck and they want to move on to the semi-truck, the insurance company will list Ford. Those patients who have failed Ford immediately move forward to the next level. Patients who have been driving other pickup trucks that are agreed are biosimilar to Ford are not automatically viewed as Ford. This would allow the insurance company to view those other failed therapies that are biosimilar to Ford as a failure of Ford therapy if that makes sense.

Rep Brown: Thank you. I appreciate that. Thank you.

Rep Maddox: Thank you. Representative Ladyman, you’re recognized for a question.

Rep Ladyman: Thank you, Mr. Chairman. So biosimilar, that’s a fairly new term, isn’t it?

Rep Achor: It is so–

Rep Ladyman: Can you give us some kind of history on, they haven’t been around long or at least the term hasn’t? So where’d it come from, how long has it been around? And then are these things being developed now in the presentation process?

Rep Achor: Yes, sir. So there are multiple biosimilars out in the marketplace right now. The term biosimilar is relatively new because there hasn’t been a requirement to have something that is in reference to an existing product. So you had original biologics, which is, for example, Lantus insulin is a very common one that’s dispensed today. That is a biologic that went through the process of approval. After that got through the process of approval other people in the market went to try and formulate generic alternatives to that. However, the term generic can’t apply to a molecule that is as complex as insulin. So they invented the term biosimilar because these products, while they do show the same efficacy, potency, and end result as the reference product, they cannot be synthesized identically at the same terms that apply to generic.

So to answer your question, it is a relatively new term. And the amount of products are relatively small compared to drug therapies overall. But this does incentivize companies to invest in developing those products that result in lower cost at the point of sale for the patient.

Rep Ladyman: Thank you.

Rep Maddox: Representative Flowers, you’re recognized for a question.

Rep Flowers: Thank you. Just so I’m clear, about your analogy– and thank you for the analogy. I love analogies. Is what you’re saying that there’s sort of a lateral? When you’re talking about the biosimilar drugs and you’re making the analogy of the Chevy and the Ford, there’s sort of a lateral sort of schedule of drugs. And this will allow the insurance companies to pay for the next level or to pay for those lateral schedules of drugs?

Rep Achor: It would be both essentially but the issue that it’s addressing is it will allow insurance companies to recognize all of those lateral ones in one group. So right now the term biosimilar isn’t in the current legislation, so even though the insurance company wants to recognize Chevy, they don’t have the freedom to do so. Whereas this would allow them to recognize that.

Rep Flowers: And so that’s where– and when your bill talks about promoting savings, it would allow if it made sense for the patient, to explore some of those biosimilar drugs and not have to go up to the next rung to the semi?

Rep Achor: Correct. It would allow those to happen but more importantly, it would not force the patient to make a lateral move after they’ve invested so much time in therapy in this level. It would be very disheartening to a patient to explain to them that you have to go try this product that you’ve already technically been on for 5 or 6 years that has failed to meet your needs and efficacy. And so now you’re starting a similar product, paying out of pocket for a product you know doesn’t have the potential to help you, just to meet a statute requirement.

Rep Flowers: And nothing in this mandates that a physician or insurance company go in any direction, just recognizing the other lateral drugs that could provide more efficacy or if it doesn’t, allowing the patient to be able to go to the next level.

Rep Achor: Correct, this does not infringe on any sort of prescriptive authority in any way. It just allows insurance companies to recognize a patient’s current therapy by the time it comes to assess them for the next step.

Rep Flowers: Great. Thank you. Thank you for bringing this bill.

Rep Achor: Yes, ma’am.

Rep Maddox: Representative Allen, you’re recognized for a question.

Rep Allen: Thank you, Mr. Chairman. Thank you for bringing this bill. I worked in pharmaceutical sales for 3 and a half years. So with your biosimilar drugs, do you all have any specialty drugs like for TPN, heart palpitations, fat emulsions or those kind of things? Are these just local drugs?

Rep Achor: So biosimilars as a term can enter into that market. So the market that’s seen the most investment into it is going to be oncology, that’s where you see a lot of–

Rep Allen: Cancer drugs?

Rep Achor: Yes, sir. Cancer drugs for this. But then you also see rheumatoid arthritis, Crohn’s disease, a lot of these psoriasis medications that biosimilar products. Again this allows the insurance company to recognize the work that those have done to prove that they are just as safe, just as effective, and just as potent as the reference product or the original product.

Rep Allen: Follow-up.

Rep Achor: Yes, sir.

Rep Allen: So with the biosimilar drugs the costs will be less than the regular drugs?

Rep Achor: That is the idea.

Rep Allen: That’s the concept then?

Rep Achor: Yes, sir. The concept is to incentivize and to remove barriers that biosimilar investments currently have to allow that competition to flourish. And so that you have greater competition in a market that honestly, represents about 2% of all prescriptions written but constitutes over 40% of all drug costs. So this allows an induction of competition into an extremely expensive market.

Rep Allen: Thank you. I like the concept.

Rep Achor: Yes, sir. Thank you.

Rep Maddox: Representative Lundstrum, you’re recognized for a question.

Rep Lundstrum: Thank you. I just want to reiterate and make sure we’re not interfering with a doctor’s ability to prescribe any type of medication. We’re actually opening a doctor’s ability to prescribe?

Rep Achor: Yes, ma’am. That is correct.

Rep Lundstrum: Okay.

Rep Maddox: Representative Wooten, you are recognized.

Rep Wooten: Thank you. Representative Achor, I recently had a situation where my insurance company denied use of a particular insulin product – I’m sorry, of an iron product infusion. But the insurance company permitted the addition of a new iron product. Is this a similar action that you’re asking for here?

Rep Achor: So this is in regards to step therapy.

Rep Wooten: Right, but what I meant, this will permit the insurance companies to be able to move into another?

Rep Achor: This prevents the insurance companies from being solely focused on a singular product to require you to move to the next level.

Rep Wooten: Okay. All right. Thank you.

Rep Maddox: Okay, I see no further questions by the Committee. There’s no one signed up but is there anyone in the audience who’d like to speak for or against this bill? Seeing no one, would you like to close for your bill?

Rep Achor: Yes, sir. I’m closed for the bill. Do I make a motion to do pass myself or is that for the Committee?

Rep Maddox: That is not for you. [laughter]

Rep Achor: Not for me. Well, I’d appreciate a motion for do pass for whoever decides to do that.

Rep Maddox: Representative Ladyman, you’re recognized.

Rep Ladyman: Motion do pass.

Rep Maddox: Okay, we have a motion do pass by Representative Ladyman. That’s a proper motion. Is there any discussion on that motion? Okay, seeing none, all in favor of the motion do pass say aye. Any opposed no. Congratulations, Representative Achor, you’ve passed your bill.

Rep Achor: Thank you very much.

Rep Maddox: Representative Eubanks, would you like to present 1242?

Rep Eubanks: I’m going to try. Thank you, Mr. Chair. Representative Wardlaw is in another committee presenting a bill. He asked me to present HB1242. This was something that the Legislative Council thought they had addressed back before the session began. This is to reinstate the opportunity for a pharmacy benefit for teacher retirees that are Medicare-eligible. He said it was a great bill.

Rep Maddox: I don’t know if I would have said that.

Rep Eubanks: Well, I know, I understand.

Rep Maddox: Just kidding. Any further testimony, Representative Eubanks?

Rep Eubanks: No, I don’t have any.

Rep Maddox: Okay. Any questions by the Committee? Representative Eaves, you’re recognized for a question.

Rep Eaves: Your opening statement that we thought we took care of that in ALC, what exactly are you referring to?

Rep Eubanks: This population, this group of people that were left out because this applies to the folks that didn’t take the United Advantage plan.

Rep Eaves: Thank you.

Rep Maddox: Thank you for that question, Representative Eaves. Any further questions by the Committee?

Rep Lundstrum: This is just a correction and we’re mopping up this correction? Okay, that’s good.

Rep Maddox: Yes, that’s my understanding. Any further questions? Okay, and there’s no one signed up. Would anyone like to speak for or against this bill in the audience? Okay, seeing no one, Representative Eubanks, would you like–?

Rep Eubanks: I’m closed and I’ll make a motion do pass.

Rep Maddox: Okay, so we have a motion do pass by Representative Eubanks, a proper motion. Is there discussion on the motion? Okay, Representative Ladyman, you’re recognized for discussion on the motion do pass.

Rep Ladyman: There seems to be some confusion, I just want to make sure. I was Vice-Chair of the EBD Committee, and this was something that we thought was included in the overall program. And we didn’t feel like very many people were going to opt out of this but quite a few did. So it was just an oversight that we thought was fixed but we found out later that it was not.

Rep Maddox: Thank you for that clarification, Represent Ladyman. Any further discussion on the motion? Okay, seeing none, all in favor of the motion do pass say aye. Any opposed no. Congratulations, Representative Eubanks, you’ve passed your bill.

Committee members, I believe that is all the bills that we have. I was contacted by Representative Hudson, McGrew, and they want to do it next week. I do anticipate trying to commence HB 1370 next week, but I’ll try to keep you informed of what all we’re going to hear. Representative Allen, you’re recognized.

Rep Allen: Thank you, Mr. Chairman. I filed a bill about 3 weeks ago, maybe a month now. And we’re still waiting on the financial impact statement. Do you have an idea when we will be receiving those results?

Rep Maddox: That’s a great question. I can certainly tell you that it varies based on the bill. We’ve gotten some reports that some are going to take much, much longer than others. I met with them about that. Maybe lets you and I talk about that offline, if we can.

Rep Allen: Is my bill one of those?

Rep Maddox: Let’s talk about that offline okay? [laughter] We’re adjourned.