States are experiencing a huge rise in the number of people without health insurance in the wake of mass layoffs resulting from the COVID-19 pandemic and are seeking strategies to protect them from high prescription drug prices. The uninsured are sometimes the only consumers left paying the full list price for a drug, while the insured benefit from drug discounts negotiated on their behalf.
The National Academy for State Health Policy’s new State Purchasing Pool Buy-in Model Legislation can give both individuals and small businesses access to the lower prices negotiated for state employees.
In January, before the pandemic began, NASHP released a model for a state purchasing pool buy-in for prescription drugs. This model legislation allows small business and individuals to buy into a state employee prescription drug benefit purchasing pool. It authorizes non-state public employers, self-insured private employers, and insurance carriers that cover small groups or individuals to purchase drugs for their beneficiaries under the state’s purchasing authority. By adding more lives to the purchasing pool, a state employee health plan (SEHP) can negotiate better prices for public employees and others who join the pool.
As state legislatures return for special remote sessions to take action on COVID-19, this model legislation could be enacted on an emergency basis to ensure access to more affordable drug prices for the newly unemployed and for struggling small businesses.
Uninsured individuals could be given a drug discount card that allows them to access the same discounted drug prices available to state employees and other members of the purchasing pool. While the state would give the uninsured access to the discounted prices it negotiates, it would not pay for the drugs purchased by the uninsured. Uninsured individuals using the discount card would pay for their own prescription drug costs, but they would benefit from the deep discounts the state was able to negotiate through the purchasing pool.
As state legislatures return for special remote sessions to take action on COVID-19, this model legislation could be enacted on an emergency basis to ensure access to more affordable drug prices for the newly unemployed and for small business struggling with the economic impact of social distancing. For more information about this approach, read:
- Q&A: A Model Act to Allow Buy-In into a State Purchasing Pool for Prescription Drugs
- NASHP White Paper: Proposal for a State Purchasing Pool for Prescription Drugs (A separate model discussed in this paper would give uninsured individuals access to Medicaid pricing.)
While legislation was originally envisioned as necessary to enable a state to implement a prescription drug buy-in program, it may be also possible to implement this approach outside of legislation during this time when states are taking a wide range of creative and flexible measures to adequately address the many challenges posed by the pandemic.