Drugmakers Turn Heat on Insurers by Backing Copay Limits

Drugmakers Turn Heat on Insurers by Backing Copay Limits

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(Bloomberg) — The battle over soaring U.S. drug prices is heading for the states.

With the price of some treatments topping $100,000, patient groups are pushing for state laws to make sure insurers cover most of the costs. Their campaign is backed by an important ally: the drug industry.

Rules adopted in four states since last year cap what insurers can charge patients out-of-pocket for expensive medicines — typically, to $150 a month. Similar legislation is under consideration in at least nine other states, according to the insurance industry, driven in some cases by patient-advocacy groups supported by companies like Pfizer Inc. under a campaign called Cap the Copay.

If successful, the lobbying may short-circuit health insurers’ attempts to persuade drug companies to moderate their prices. By limiting copayments, drugmakers effectively insulate Americans with health insurance from the full cost of their products, relieving public pressure for lower prices. Without the flexibility to charge higher copayments for expensive medicines, insurers say the prices trickle down to all consumers in the form of higher monthly premiums.

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