A win for Indiana patients: “Sharing the savings” legislation now law

Indiana just joined West Virginia and Arkansas in delivering an important win for Hoosiers who are struggling to afford their medicines. This week, Governor Holcomb signed into law Senate Bill 8 recently passed by the Indiana legislature. This new law will ensure that Indiana patients aren’t paying more for their medicines than their health insurance company or the middlemen known as pharmacy benefit managers (PBMs). 

This concept, known as “share the savings,” puts money back in patients’ pockets by requiring insurers and the PBMs they work with to share the rebates, discounts, and other price concessions they receive from manufacturers directly with patients at the pharmacy counter.

Negotiations between pharmaceutical companies, health insurers, PBMs and others result in significant rebates and discounts that totaled $236 billion in 2021. However, those savings aren’t always shared with patients, which means there are patients who end up paying more for their medicine than their insurer and PBM. This legislation requires 85% of the rebates health insurance companies receive from manufacturers be applied to lower drug costs for patients at the pharmacy counter in Indiana’s individual market and requires insurers to pass through 100% of rebates to plan sponsors (employers) in the fully insured group market, which employers can decide how to share with enrollees. This means lower out-of-pocket costs for Hoosiers, as well as an increased likelihood of better health outcomes as more people will take their medicine as prescribed.  

A recent 50-state poll conducted by Morning Consult on behalf of PhRMA found that strong majorities in every state, including Indiana, agree lowering out-of-pocket costs for health care should be a top policy priority. Specifically: 

•    80% of adults in Indiana support a law that would prevent patients from paying more for their prescription medicine than their insurance company or pharmacy benefit manager (PBM).

•    82% of respondents in Indiana agreed elected officials should ensure health insurance companies and middlemen are held accountable for their role in keeping patients from the medicines they need. 

Indiana patients should have access to affordable medicines, and this legislation is a significant step toward achieving that goal. 

To learn more, visit PhRMA.org/States.