Businesses, insurers say prescribing new drugs faster too costly

Step therapy requires patients to use one or more drugs that are often older, generic versions and have been tested and studied before the patient can use newer treatments they would prefer or their doctors suggest, unless a doctor seeks an exception. Step therapy legislation across the United States has been a response to rising costs and widespread commercial advertisements for prescription drugs.

Nathan Babcock, political director for the North Carolina Chamber, told members of the House Insurance Committee, that North Carolina has 57 insurance coverage mandates already, such as requiring coverage for autism treatment, which he said is the second-highest number for the Southeast.

"This adds to an already volatile and quickly growing cost for employers," Babcock said.

Chris Evans, a lobbyist for Blue Cross Blue Shield of North Carolina, said it's "not unreasonable" for the insurer to ask people to try proven therapies first before moving to more expensive treatments that might not work any better. Eliminating step therapy could add $7,000 to $15,000 to the annual premiums for a business with 25 employees because of the higher drug costs, she said.

Evans and Babcock also criticized the fact that the State Health Plan would be exempted under the bill, meaning only private employers would have to pay extra to go without step therapy.

"We don't believe the General Assembly should impose an extensive mandate on small business that the state isn't willing to accept itself," Evans said.

Lawmakers passed three mandates on insurers last year, according to Rep. Gary Pendleton, R-Wake, who said piling demands on the industry needs to stop.

"This is worse than Obamacare," Pendleton said, noting that the mandates are over and above any requirements imposed by the federal Affordable Care Act.

Other lawmakers questioned a provision in the bill that would make it easier for doctors to prescribe "abuse-deterrent" opioids, such as a new OxyContin formula that can’t be easily broken up and then snorted or injected.

Rep. Susi Hamilton, D-New Hanover, said she fears the bill's intent to "increase access" to such drugs, with insurance companies picking up the tab, would only aggravate a growing opioid abuse problem.

Rep. Greg Murphy, R-Pitt, the bill's sponsor, said the increased access would allow doctors to prescribe it as a substitute for other painkillers without having to jump through administrative hoops.

Abby Stoddard, a lobbyist for pharmaceutical benefits manager Prime Therapeutics, also cautioned against believing such drugs would cut down on opioid abuse. She recounted for lawmakers how, when she was a pharmacist in rural Minnesota, addicts were quickly able to find a way to crush a new formulation of a painkiller that was supposedly unbreakable.

The bill remains before the House Insurance Committee.