for the time the patient are on the drug what happens it leads to adverse selection among health plan those that covers medications for favorable will have more people on the plans that gets to the sustainability of plans over time as supervisor wiener mentioned that is a invading issue this is a recent study where affordable housing letter health looked at the study california was included with the federal health change population so public california and california those states represent 60 percent of the total population enrolled in health care and it is relative to the as supervisor wiener said it's to the limited to the health plan in the health

insurance plan. >> this is important one conversation we were having in the community there are people that opt for the high digestible plans and find the dedublt are noted manageable we're ask them to go to a silver plan we're talking about spll silver plans having drugs that are effectively unaffordable for people that's a real problem. >> absolutely and i didn't mention when i was talking about the unexpected nature of the health costs brauj plans you pay a lower amount but the minute you need health care it is far more expensive 2, 3, 4 a baggage plan the cost sharing for

speciality plans can be 40 percent of the cost for drugs so what that table shows the proportion of the plans for all the drugs in a specified class into the tier for hiv medications they looked at medications broken covering medications for example 29 percent of the plans for all probable cause terrors and 60 percent of plans put the cancer medications into a stoplight column it is nationwide issue a study was done in speciality medications in 11 health care plans this is a chart from that

report that looktsdz the formulas so the dark blue colors show when messages for hiv may appear in tiers 1, 2, 3 and the other is for tier 4 there are 4 plans that have more than 70 percent of mayor medications for hiv in the highest cost tier it is important to point out here i think that the plans that tend to place those medications in the highest one were smaller carries and represent about 5 percent of the overall enrollment in california and also note those plans include one out listeners listener and the health care has been in contact with the health care to address the issue and have shown

a willingness to make changes. >> what's the other 3. >> i don't know. i think that sharp and valley is one - >> (inaudible). >> solly think - southern california. >> here's a true cost example with using the hiv medication it is about $15,000 announcing and the amount that the patient pays to get this to a health plan on covered california varies on the level that the person purposes as mentioned the brauj plan seem more effective when you buy and have to pay every month but they

could be more expensive you have to pay more when you access a health care service 40 percent of 42 percent of san franciscans incomes higher than that choose the bronze plan and platinum has the highest premiums but on a bronze plan a participants might take 40 percent of speciality medications but on a platinum plan 40 percent looking at the difference between platinum and browns plan the platinum a person access the medication and the plan on the preferred tier that cost is one hundred and 80 there's a year for that one medication if the

speciality tier the cost is one thousand $500 a year compared to the browns plan if the medication were put on the preferred brand that's tier 35 thousand dollars plus a year and tier out-of-pocket maximum a plan can't charge a patient more than $6,350 a year that hits the $6,000 cap only on one medication there are efforts to address this issue since they've been identified in may 2014 a complaint in the federal health and human services in a statement in response to that

allegation they said if an issue replaces most or all drugs that treat the plan it discriminates or discourages enrollment that is a clear practice and the federal budget proposal currently before congress allows the skeet of health and him services allows the high cost preparation drugs the affordable health care act eliminated the ability of the government to negotiate drug pricing there are also is statewide effort to address the tiering last year, it was sb passed that covered the california covered plan the sub stabilize that program that helps patient to

look at the medications they need just recently earlier 24 year covered california encompassed additional requirements for implementation the addition to those all the time by sb 52 we wanted it earlier and created a standardized definition and for conditions treated with speciality medication hasn't at least one medication must be on tier 1, 2, 3 and physical evidence looking at the future for the ability to access the caps or spreading of maximums throughout the year a person who wouldn't spend 0 more than a certain amount in one year or shift the burden there are two bills pending before the state legislation ab 39 prevents the copies from a

tier and assemblyman bill requires the companies to report medications that costs more $10,000 just to conclude it is clear it matters in san francisco but that helps to put a finer point on this is a chart showing element san franciscans living with hiv we don't have good numbers for multiply scleras and other disease but necessary need access to treatment that is why it is an important issue here in san francisco thank you very much priscilla so mr. chairman i'd like to ask as mentioned our assemblyman david

chiu is sponsored legislation around this and aaron's office is here i want to ask him to come up and speak on the assembly man's behalf. >> thank you very much as the supervisor said i'm here i'm aaron on behalf of dude for the most part thank you, supervisor wiener for this important topic so through the affordable health care act millions of californians now have comprehensive plans and this is on affordability high-priced drugs and speciality drugs taken place to derail the coverage and the co-pay who have 6 price tags are struggling with the chronic

and complex disease as mentioned far too many patients living with hiv and aids and cancer and as well as hepatitis c and having to my for their childcare food over and over in san francisco their housing spending on the speciality drugs is expected to quadruple to $400 billion if 0 noticing nothing is done to address those those are impacting the drug governor jerry brown state budget is looking at the hepatitis c 2r5e789s and that if be a tremendous breakthrough more than one thousand dollars per pill those are a burden on the health care system and

unsustainable in the long term from the package of proposition d david chiu worked on this it is clear with the san franciscans stand at the state level we're working to aid this with two patrol officers proposals we have seen ab and assembly member chow talked about the high-priced drugs specifically to report data to the state of california for the policymakers with insights into the costs of drugs and will vooblth for ever treatment above $10 the pharmacy companies must disclosure the costs and martha advertising and materials and

manufacturing and government substantive grant and the costs attributable to that drug with the mind of the drugs no genetic alternatives highlight the need for scrutiny how drugs are priced and the rationale behind charging the government and patient prices beyond the sustainability of our health care system ab 43 provides that scrutiny and shiendz the light on this and we must have the ability to help all folks thank you very much. >> next i'd like to call up alison from blue shield of california director or - director of pharmacy network.

>> good afternoon. thank you for inviting us here i'll start off by saying unemployed is is a nonprofit health plan we serve cervical in addition to nonprofit we have a net cap to 2 percent of our revenue we have the largest foundation in california and one of the first plans to support of universal coverage. >> so blue shield tier drugs are based on the cost not the condition for which is used four tiers of the drugs to treat hiv are not on the highest tier we're one of the plans that on the grid that has a blue and

orange bars to the left side of the chart we occasionally make exception to our guidelines when we cover a more expensive drug at the lower cost tier the drug tiering is only one of the plans for the health be affordability it's the increase of drugs that's out paigdz our efforts as mentioned in the presentation before me those costs of drugs are set by manufacturers upon drugs launched to the market once drugs o are on the market those prices set the prices for payers and manufacturers increase the price annually. >> prices increases for and speciality drugs on the market

are seen at 11 to 13 percent annually compared to the cost of living index of 1230 percent speciality drugs as mentioned are increasing at 20 to thirty percent announcing and more than 50 percent of the drugs are speciality drugs many of the drugs require long term and it is okay to place lower drugs. >> could you speak directly into the microphone. >> towards you. >> one example of the newer drug used to treat high cholesterol is a drug inhibit our their expended to cost $150 billion a year and to be the highest drugs in history estimated $270 billion in drugs

expected to spend on drug in 2015 the cost per patient is 10 and $15,000 and it is not a one-time drug a drug you'll take for the rest of your life so in addition to the increases in drug prices there's increases in drug use that are driving drug costs use of high cost drugs expected to drugs previously used to treat new conditions no low cost drug alternative and patient and subscriber are driving the drug use and eventually drawing costs there in drug costs is a problem as. >> make it affordable the true

costs of drugs prices is for controlling the drug price increases and the policymakers should demand the long term pricing has on those drugs that those drugs have on health care go affordability those include holding hearings on drug pricing supporting trablts will legislation such ab 463 that i dude it forces the manufacturers to jif those prices thank you was that the end of your first of all, thank you blue shield we invited a number of insurance health plans and blue shield was the only carries that agreed to come we appreciate it is not necessarily

the easiest meeting to come to so i example in terms of speciality drugs someone informed we they take into account blue shield pricing drugs and informed me with all of the drugs to cure fbi roads and multiple sclerosis are on the speciality list for blue shield so i am appreciative of the hiv drugs are on the speciality tier for blue shield can you speak to that i don't know if you have the list and i mentioned we basis most of our drug tiering on costs

it could be for regardless of what the condition is that is being treated. >> so if you're a blue shield member let's say a middle-class person and you have cystic fibrosis and ms not optional drugs what would a person be expected to do so you're being told to pay a thousand dollars a month under the affordable health care act i guess the cap is 60350 a year with you that's still a lot what's should a person do showing should they people means they can't take their will medication because it is not a genetic alternative and

can't pay 5 hundred or one thousand dollars a month what is that person to do. >> we have some exceptions you're right for those classes the drugs on tier had the highest tier we need to address this affordability crisis as an industry i don't have an immediate answer for that person but we need help to make the cost of drugs a public expose to the public and . >> people buy insurance to be covered to have access they pay presumes or the employer pays the premiums for the access is blue shield position that that have someone no pay 5 hundred a

or one thousand dollars a month for the necessary drugs that come applies with the affordable health care act if it effectively means a person with a disease is screened out coverage that's like a preexisting inclusion it seems to me to say blue shield's position having the extreme level of co-pay consistent point affordable health care act. >> there are maximum as you maximum out-of-pocket as mandated by the affordable health care blue shield's mission to insure all californians have access to the affordable price that's not something we can necessarily change over night something we're in for the long hall and the long term affordability we need to expose manufacturers and

hold them accountable. >> but drug prices have also been high there's ice popping prices but not like their - they've been expensive especially the new drugs i don't know in the reclassification is a new thing but sledder the health plans have a new tool to try to pass along costs and even with the 63 hundred and $50 cap for a lot of people that means not taking the drug and so i want to say i understand the industries point about the pharmaceutical and the cost of drugs not only on one sector to

solve but we're seeing the insurance industry doing it's a problem in and of itself and there's a solid argument in my view is violates the affordable health care act if you have a disease that i listed no way to get them through please line up on the screen side of the room. >> i am with the blue shield of california would it be okay if i answered. >> absolutely. >> the copayment and stent of coverage is described in the affordable health care act in you'll our products and internal decision completely follows the law but covered california as prescribed and what the law prescribes. >> okay. i would expect it blue shield will stack that

position but there are differing points of view i'm not expecting blue shield to say we're violating the evicting but it is not only about blue shield there are a lot of insurance companies it's an industrywide issue one last next thing any hiv drugs the blue shield describes and specialities. >> we don't have a speciality by the way hiv across all four tiers. >> and tier 4 so the difference between that and the speciality. >> well, we define our tiers based on cost and tier 4 is the highest co-pay and two strict gold and tipping la that are on the tier.

>> i only know of one. >> who. >> tipping lesson. >> i thought there maybe two more. >> okay. >> thank you. >> okay. i'll now ask donald are you guys together or separate? separate okay >> thank you, very much. and holding this pour hearing one pointed of clarification we did an analysis felt covered california plans the blue shield plan only was one drug on speciality level and let's see if i can get to the right slides before we started i want to thank you my technical assistant before we start i want to clarify one thing to the affordable health care act we're going to have to look to the state of california

to clarify those although the government has said they last sector as colleen said did say we may have discrimination of all drugs placed on the highest tiers but they kind of not mitigated it but they added to this in a way that wasn't helpful in saying the plans could also use another factor to see why the drugs are tiered at the highest level not showing a factor that is discriminatory so what i was going to do into into depth at the state level to make changes i pointed out i started with this as a presentation because of the lack of understanding of the speciality

drugs i put speciality drug in quotations this may be based on costs the important point i want to make awhile making progress in california if we enact all the things in our tool dheft we'll not make a difference until the pharmaceutical companies come to the table they're not there yet and extremely high-priced drugs make it difficult for insurance companies to make them affordable and the reason for that the plans are negotiators would the companies about the cost of those drugs so they need to have a type of mechanism like a tiering mechanism in order to bring the companies to the table to lower their prices this is unfortunate because the consumer

losses so when we had extreme expensive drugs there shs cost sharing because of the necessity to negotiate and that at least a lot of assess and discrimination against people the first effort i want to talk about the cover california that is a groundbreaking effort and they brought together the advocates and the plans and the regulators and the project is part of the workshop we've done action by the board to include the transparent and access this is really important even though it is not the speciality tiering it was a huge roadblock no real way to compare it prior to this action when we tried to analyze

that it took tour analysts hours to get through what was on the form and not a single time to find a person to clarify questions we had so for a year 2016 plans will have to have this increases the access going to have to have an opted issue and provide an estimate of the range of costs for specific drugs, the formulas will include all the covered drugs to treat hiv/aids and rheumatoid arthritis and lupus what was happening before people couldn't look at the preliminaries and have to have the exception process written on the formula that is a process that's not covered by the plan and they're going to this is a big win