Bill To Help Regulate Prices Of Some Medications

The Government will be tabling amendments “to bring about important and overdue changes to the high cost of medications,” Minister of Health Kim Wilson said in the House of Assembly today [Feb 19].

“The largest out of pocket health spending for members in our community is on medication. Just looking at insurance claims, more than 1 in every 5 claims is for a prescription medication,” Minister Wilson said.

“While insurance covers 80% of the cost of the majority of medications that we use, some medications cost tens of thousands of dollars, and for those with chronic conditions, having to pay that 20% of every single medication that you need, really adds up.

“Investigations undertaken by the Health Council, including extensive stakeholder consultation with public and private insurers, pharmaceutical wholesalers, pharmacy owners, the Pharmacy Council, physician representatives and others, identified the introduction of a national drug formulary as an appropriate means by which drug affordability could be pursued.

“Under section 5[h] of the Bermuda Health Council Act 2004, the Health Council has authority ‘to regulate the price at which drugs are sold to the public”. This was established at its inception to be part of its mandate. Until now, the Council has not exercised this authority because it had not yet developed the necessary regulatory regime and the Regulations did not exist.

“The purpose of the Bermuda Health Council Amendment Act 2021 being tabled today is to support the function of the Council in regulating the price at which drugs are sold to the public by establishing in law the Bermuda Health Council [Drug Formulary] Regulations 2021.

“The purpose is not to control the price of every medication sold in Bermuda. Rather, the Bermuda Drug Formulary will comprise the list of common essential medications such as Metformin [used for type 2 diabetes] and Prednisone [used in the treatment of arthritis, blood disorders, cancer and eye problems], along with associated products and devices used in medical treatments, which are intended to be medically appropriate, cost-effective and sold at a regulated price.”

The Minister’s full statement follows below:

Mr Speaker and Honourable Members,

I am pleased to highlight for this Honourable House and the public that today the Government will be tabling amendments to the Bermuda Health Council Act 2004 to bring about important and overdue changes to the high cost of medications faced by many Bermudians.

Our high cost of healthcare, an ageing population and an increasing incidence of chronic diseases such as diabetes all contribute to the burden felt by many in the community. Even though we can appreciate that science continues to give us new medications and treatments for managing our health, it has been clear for at least the last 10 years that our people are concerned about the price they have to pay for these medicines. For example, in the Health Council’s 2017 Health Services Survey, residents clearly said that “medicine was too expensive” and that they “needed more help getting medicines for the elderly.”

Mr Speaker, the Progressive Labour Party heard the cry of residents, and today we are taking steps to address this.

Mr Speaker, the largest out of pocket health spending for members in our community is on medication. Just looking at insurance claims, more than 1 in every 5 claims is for a prescription medication. The only claim higher is for people getting services at the hospital. According to the most recent National Health Accounts Report, medications accounted for at least 5.7% of total healthcare spending in financial year 2017-18. The Council indicates that it is “at least” that amount because there are large pockets of spending and use of prescription medications that are not part of the collected data. The system right now just is not set up to properly track how many medications we buy, sell or use.

While insurance covers 80% of the cost of the majority of medications that we use, some medications cost tens of thousands of dollars, and for those with chronic conditions, having to pay that 20% of every single medication that you need, really adds up. For seniors on FutureCare, the coverage for medication comes with a cap of $2,000 a year. While Financial Assistance pays for its clients to receive prescription medications, those not on financial assistance but with the Health Insurance Plan must pay for all medications out of pocket. This has been highlighted during the current coronavirus pandemic as more and more companies are moving their employees to HIP and leaving them without equitable access to medication.

Mr Speaker, in an age where access to medications is not equitable, or even promised – medications that can keep people out of the hospital or away from life changing complications – we need to have more regulation to combat their costs. Right now, cost controls, price setting, cost regulation, cost limits and additional fees for medications are privately set by private companies without government control or intervention. While all pharmaceuticals must be purchased abroad and are imported duty free, there is a lack of clarity around the pricing structure of drugs at the final point of sale to the public.

Investigations undertaken by the Health Council, including extensive stakeholder consultation with public and private insurers, pharmaceutical wholesalers, pharmacy owners, the Pharmacy Council, physician representatives and others, identified the introduction of a national drug formulary as an appropriate means by which drug affordability could be pursued. This was not an original Council concept, but part of recommendations that had been made over time in multiple expert reports such as the Oughton Report, Arthur Andersen Report, and the Todd report.

Mr Speaker, Honourable Members may be aware that under section 5[h] of the Bermuda Health Council Act 2004, the Health Council has authority “to regulate the price at which drugs are sold to the public”. This was established at its inception to be part of its mandate. Until now, the Council has not exercised this authority because it had not yet developed the necessary regulatory regime and the Regulations did not exist.

Mr Speaker, the purpose of the Bermuda Health Council Amendment Act 2021 being tabled today is to support the function of the Council in regulating the price at which drugs are sold to the public by establishing in law the Bermuda Health Council [Drug Formulary] Regulations 2021.

To be clear, Mr Speaker, the purpose is not to control the price of every medication sold in Bermuda. Rather, the Bermuda Drug Formulary will comprise the list of common essential medications such as Metformin [used for type 2 diabetes] and Prednisone [used in the treatment of arthritis, blood disorders, cancer and eye problems], along with associated products and devices used in medical treatments, which are intended to be medically appropriate, cost-effective and sold at a regulated price.

Mr Speaker, this work of determining what is on this list will be carried out by a new Pharmacy and Therapeutics Committee appointed by the Minister of Health in consultation with the Health Council. The main function of the Committee is to advise the Council on the Bermuda Drug Formulary.

The Committee will be appropriately representative of the industry, including:

• a member from the Council’s board to be the chairperson and a member of the Council’s secretariat;

• a representative of the local pharmaceutical market nominated by the Pharmacy Council;

• a representative of the local health services market nominated by a registered health statutory board such as the Bermuda Medical Council;

• an international representative of the pharmaceutical market in the region;

• and, others representing relevant areas of health expertise as appropriate — such as cancer specialists, pharmacy owners, dieticians, senior patient advocate, GPs — as determined by the Minister and Council – up to a maximum of nine people at any given time.

Mr Speaker, the Pharmacy and Therapeutics Committee will have a key role in, among other matters, evaluating drug utilisation in Bermuda and assessing new drug classes and clinical indications. The Committee will determine how medical products will be added to, or deleted from, the Drug Formulary. The Committee will develop its recommendations on the list of medications for the Drug Formulary for final approval of the Bermuda Health Council.

To support understanding of the local use of medications and the conditions they can best treat, the Council will have the authority to require the submission of select data from insurers, pharmacies, medical practices, hospitals and or importers in respect of the medications being sold. Of course, all data required will be bound by the rules of patient confidential and privacy in accordance with privacy legislation and rules. Such data will also be used in the setting of regulated and fair pricing for members of the public through a transparent process.

Mr Speaker, the new Regulations will also provide the Council with the ability to participate as a negotiator on behalf of Bermuda in the procurement of medical products. The Council may partner with a local pharmacy or importer to assist in securing the best possible drug prices for the Bermuda public. It has been said in the past that Bermuda could do much better when it comes to negotiating improved prices out on the international prescription drug market.

Mr Speaker, pharmaceuticals are, clinically, medications which are the most effective non-behavioural intervention for non- communicable disease. Pharmaceutical intervention saves money and interrupts the costs and burden of disease progression, but doing so with efficiency requires cost control. As such, the implementation of Regulations that support the function of the Bermuda Health Council in regulating the price at which drugs are sold to the public will provide welcome benefit to the community.

Mr Speaker, the Progressive Labour Party promised Bermuda in the 2020 Party Platform that we would establish a National Drug Formulary that will set maximum pricing for common essential medications which reduce costs to consumers…promise made, promise delivered.

Thank you, Mr Speaker.

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