Thank you for attending! We will begin shortly.

Thank you for attending!We will begin shortly.

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Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs

January 12, 2021

Opening Remarks

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January 12, 2021

Lt. Governor Dianne Primavera, Director of the Office of Saving People Money on Health Care

D.J. Wilson, President and CEO, State of Reform

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Jill Hunsaker Ryan, Executive Director & Scott Bookman, Incident Commander: COVID19, CDPHE

Meet our Other Presenters & Facilitators

Commissioner Michael Conway, DOI

Lt. Governor Dianne Primavera, Director of the Office of Saving People Money on Health Care

Dr. Robert Werthwein, Director Office of Behavioral Health, CDHS

John Bartholomew CFO, HCPF

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Today’s Summit Sessions● 8:00-8:15am Opening Remarks ● 8:15-8:45am Affordability Priorities with Special Focus on the Rx

Report ● 8:50-9:30am State Opportunities to Reduce Prescription Drug Costs ● 9:35-10:05am Federal Opportunities to Better Control Prescription

Drug Costs ● 10:10-10:30am Colorado’s Behavioral Health Task Force Priorities

and Next Steps ● 10:35-11:15am Helping Rural Hospitals and Communities Thrive ● 11:20-11:50am Helping Employers Control Health Care Costs ● 11:55-12:15pm COVID19 Public Health Response ● 12:15- 12:30pm Closing Comments

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Special Guests & State Leadership• Dr. Sami Diab, M.D., President, Colorado Medical Society and Associate Chair,

US Oncology Breast Research Program• Michelle Mills, CEO, Colorado Rural Health Center• Will Cook, President & CEO, Vail Health• Senator Michael Bennet• Senator John Hickenlooper• Marissa Schlaifer, VP, Policy & Regulatory Affairs, OptumRx • Dr. Gerard Anderson, Director, Johns Hopkins Center for Hospital Finance &

Management • Dick Monfort, Owner/Chairman and CEO, Colorado Rockies• Robert J. Smith, Executive Director, Colorado Business Group on Health

Additional State Leadership• Carrie Paykoç, Director, Office of eHealth Innovation, • Tom Leahey, Director, HCPF Pharmacy Office• Nancy Dolson, Special Financing Division Director (HTP), HCPF• Cristen Bates, Sr. Advisor, HCPF Affordability Partnerships• Caitlin Westerson, Sr. Health Policy Advisor, Office of SPMHC

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Battling COVID, Data to 1/11/2021THANK YOU Hospitals & Healthcare Workers!

United States:22.5M total cases374,029 deaths

Colorado:

Cases: 361,148

Deaths due to COVID: 4,107

Deaths Among Cases: 5,208

(1) Colorado Department of Public Health & Environment. https://covid19.colorado.gov

Priorities: Continue to Drive Messaging 1. Socially distance. Wear your mask. Wash hands. 2. Limit gatherings. Stay discipline. 3. Vaccine Distribution4. Get Coloradans vaccinated

– Diversity, trusted-partner messengers

Vaccines Dispensed

1st Dose: 183,323

2nd Dose: 33,878

CO Contagious: 1 in 105

The Health Care StrangleholdBefore the recession: #1 issue for small employers 10 yr running. #1 issue for Coloradans. Largest part state budget

Recession Impact• 20% of Coloradans worry about feeding their family• 22% of Coloradans are worried about losing their home• 18% report being unable to pay for basic necessities (1)

• 672k received Unemployment Insurance March-Dec 2020, 22% of 2019 workforce - now at 250k

• Rising uninsured rate – Coloradans can’t afford coverage

State: Health care represents 36% of state general funds HCPF, CDPHE, CDHS = $4.2B GF

(1) Colorado Health Foundation, Pulse Survey, Sept 9 2020

Pandemic’s Impact on Health Insurance Landscape672k Coloradans Received Unemployment Insurance March-Oct (22% of

2019 workforce); Now = 253,333 on Unemployment Insurance

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CO Unemployment Rate

(1) Colorado Department of Labor and Employment. (2) Office of State Planning and Budget, November 2020.

Feb: 2.5%Mar: 5.2%Apr: 12.2%May: 10.2%Jun: 10.6%Jul: 7.4%Aug: 6.7%Sep: 6.4%Oct: 6.4%Nov: 6.4%

Dec US Job Loss: 140,000Source: Bureau of Labor Statistics

Adults & Expansion Adults 61% of growth.

Children

30% of growth.

2nd fastest state for seniors

growth.

9(1) Colorado Department of Health Care Policy & Financing 2020 data.

Medicaid/CHP Rising enrollment continuesPHE extended by HHS from 1/21/21 for 90 days

If you are currently uninsured, or anticipate being uninsured, do you plan to:

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July 31(5,000+ respondents)

Nov 9(857 respondents)

Purchase coverage thru Connect for Health 8.92% 8.89%Purchase coverage directly from a health insurance company 2.70% .81%

Apply for coverage w/ CO Medicaid 20.0% 35.85%Apply for coverage w/Child Health Plan Plus .99% 1.08%Get covered thru my spouse's health insurance 1.71% .27%

Under 26, get covered through my parent’s health insurance 0.09% .27%

Get covered, but not through any of the above 4.95% 4.04%Other 14.50% 8.36%Go without health insurance coverage 46.13% 40.43%

Connect Coloradans to affordable coverage!

• I can’t afford the monthly premiums: 82.63%

• I can’t afford the copayments, coinsurance or other out-of-pocket costs: 40.12%

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Why are you planning to go without coverage?

• I don’t think I will be out of work – and therefore without health care coverage – for that long: 3.56%

• I do not think I need health insurance: 4.79%

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1. Reduce pharmacy costs

2. Reduce large employer insurance costs

3. Behavioral Health Task Force recommendations

Lt. Gov Primavera, Office of SPMHC & Health Cabinet Goals

Colorado – We Lead!

• System Reform: Behavioral Health Task Force� Improve access, quality, efficiency, navigation� New Behavioral Health Administration (BHA) addresses a

fragmented system, merging 75 non-Medicaid programs� Stimulus to centralize BH eligibility, claims payment,

reporting, etc. HCPF will continue to take an active role in this work!

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Improving Behavioral Health Outcomes

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Focus on Major Drivers: Hospital, Rx

(1) Health Care Cost Institute, 2020

Price and Utilization

Total Spending

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2018: #1 for Hospital Total Margin/Profit. #8 for Hospital Operating Expenses per Adjusted Discharge (Cost of Living Adjusted)

Source: Medicare Cost Reports

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Evolving Hospital Transparency to Frame New Affordability Policy

Two statutory reports due from the Dept, Jan. 15, 2021: ● Hospital Expenditure Report, Transparency (HB 19-1001).

○ Hospitals’ net patient revenue increased 33.7% from 2014 to 2019■ $4.0B, averaging 6% growth a year

○ Charity care decreased 10.8%

● Hospital Community Benefit Accountability (HB 19-1320). ○ Requires nonprofit tax-exempt general hospitals, Denver Health and

University to complete a Community Health Needs Assessment every three years and an annual community benefit implementation plan every year.

○ Overall investments reported from 2019 totaled $1,874,994,604. ■ Free, reduced-cost health care services: $1,040,851,796■ Health behavior, risks, social determinants programs:

$834,142,808.

• Hospital – Community – HCPF collaboration

• Value-based payments for transformation $1B+ annually

• Improves affordability & outcomes

• Rural Support Fund: $12 million x 5 years = $60 million

Hospital Transformation

through Value-Based Payments

Solution: State & Community Hospital Transformation Collaboration

Hospital Transformation Program (HTP)

• Closing down or repurposing standalone ERs (HTP reward)

• Getting physicians better tools (HTP rewards)

• Alternative payment methodologies that better reward providers for cost and quality

• Telemedicine: • Access: Specialty care, rural areas, older adults,

people with disabilities• Behavioral health (battles stigma)• Appropriate rates

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Pursuing “A New Normal in Health Care”

Supreme Court ACA Hearing • As California’s AG, Xavier Becerra lead defense of ACA• $2B+ for CO Medicaid expansion up to 138% FPL, covering 500+k • Exchanges subsidies up to 400% FPL, 119k of 173k Coloradans• We are cautiously optimistic on final May/June decision

On Healthcare Affordability, June 2020: “We are in the midst of a global pandemic, so it is more important than ever that we make healthcare more accessible and affordable for patients who need it.”

On Rx, Leader in Opioid Settlements: “Our office has worked aggressively with our coalition partners to hold accountable bad actors who fueled this public health crisis.”

On Hospitals: Settlement addressed Sutter Health’s anticompetitive practices. Acquisitions & mergers lead to market domination/monopoly, reduced competition,increased prices through market domination and market price setting

Transparency, Affordability Actions & Community Investment19

New HHS Appointee: Xavier Becerra

How Coloradans Are Getting Covered

• Dec 2020, 1.42M (24.2%) of Coloradans in Medicaid, CHP+ (2)

• Sept 2020, Medicare covers 16.1%, 941k+. • Public Plans > 40%.• Rising uninsured rate. Less certainty in employer coverage. • Affordability issue is NOT with public programs. • Support for the General Assembly’s pursuit of a state-based,

insurance option (1) Colorado Health Institute, February 2020 (2) Official HCPF data, October 2020

(1)

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“Hispanic residents are about 20% more likely than white residents to die of treatable

conditions. There’s no one explanation for the disparity in deaths, experts say.”

-Denver Post, Oct 4, 2020 (1)

Health Equity and Health Care DisparitiesSeeking CDC Funding, State Stimulus $$, Partnerships,

Culturally Sensitive Care Delivery

In Colorado: • Hispanic people are 22% of the pop and 38%

of COVID cases and hospitalizations. • Black people are almost 5% of the pop,

nearly 10% of COVID hosp., 7% of deaths.

• White people are 68% of the population but only 38% of COVID cases. (2)

(1) Wingerter, Denver Post, October 2020 (2) CDPHE data, 2020 (3) March of Dimes, Peristats, 2020

(3)

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Reducing Rx Costs in Colorado – Cost Drivers and Strategies to Address Them

2nd Edition released 1/11/21

Prescription drugs are the fastest growing consumer health care expense

Prescriptions, Expenditures by Drug Type

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Drug Type % prescribed % of expenditures

Generic 84% 13%

Brand Name 14% 39%

Speciality Drug 1% 48%

Medicaid 2020

Colorado All Payers 2018

Drug Type % prescribed % of expenditures

Generic 85% 19.6% ($759m)

Brand Name 15% 39% ($1.5b)

Specialty Drug 1% 42% ($1.6b)

Source: Internal analysis, CIVHC analysis 2020

Increase transparency. Federal or state intervention to influence price during patent protection period.

Complex pricing structures and no competition during patent protection to drive appropriate pricing.

Drug importation Canada & other countries. Affordability Board. Learn from Medicaid policy. Reform patent and exclusivity policies, expedite generic approvals.

U.S. pays more for the same drugs than almost any other country

MAJOR COST DRIVERS SOLUTIONS

Limit direct to consumer marketing, physician marketing and detailing. Rebate sharing. Prescriber Tool.

Overutilization of higher cost drugs.

Create a state Affordability Board to address high drug costs. Evolve federal pricing influence, i.e.: Medicare & new drugs.

Drug prices are affected by multiple levers. Split fed oversight. No statewide accountability to protect consumers.

Value-based contracts. Re-evaluate federal production incentives. Fed intervention in launch prices.

# of new drugs each year increasingly high-cost, specialty drugs.

Rebate pass through to reduce costs to employers and consumers.

Use of rebates, which impact prices and are often kept by middlemen.

Coalition-led negotiations to improve discounts, rebates, other pricing. Learn from Medicaid best practices and policies.

Disparities in best practices and prices between small & large employers.

MAJOR COST DRIVERS SOLUTIONS

CO Net Medicaid Rx Spend PMPM is Flat

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Health First Colorado Pharmacy and Physician Administered Drug Expenditures and Rebates, Per Member Per Month (PMPM) 2014 - 2019

Calendar Year

Total Rx Expenditure

Amount

Total Rx Spend, After Rebates

Total Drug Rebate Amount

Rebate Percentage of

Total Expenditures

Total Rx Expenditure

Amount, PMPM

Total Rx Spend, After

Rebates, PMPM

2014 $641,250,900 $401,444,356 $239,806,544 37.40% $51.17 $32.04

2015 $841,710,698 $436,615,378 $405,095,320 48.13% $56.47 $29.29

2016 $1,011,463,513 $523,133,928 $488,329,585 48.28% $63.42 $32.80

2017 $1,093,440,876 $504,738,484 $588,702,391 53.84% $67.60 $31.21

2018 $1,122,993,942 $445,861,992 $677,131,950 60.30% $72.73 $28.88

2019 $1,146,383,302 $385,240,394 $761,142,908 66.40% $77.78 $26.14

CY 2017-2019 Drug Rebates are adjusted for an overcollection of drug rebates that occurred in CY 2017. The Department has been paying back the overcollection to drug manufacturers, and has adjusted the figures based on the approximate reimbursement by calendar year.

Learning from Medicaid Fed Protections

Medicaid Flat Trend After Rebates - Why?

• Medicaid Drug Rebate Program requires manufacturers to offer their “best price”

• Medicaid rebates increased when prices increase faster than inflation

• Full rebates pass-through to Medicaid/CMS

• Supplemental rebates negotiated in exchange for preferred formulary status

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Drug Importation Savings – Canada & Other Countries

28Source: Colorado Department of Health Care Policy & Financing internal analysis, 2020

HCPF 50 drug analysis: employers & consumers savings avg.:● From Canada: 63% ● From Australia: 78% ● From France: 84%

14 biologics analysis savings avg.:● From Canada:71% ● From France: 77% ● From Australia: 78%

Prescriber ToolPhase I• Drives prescribing based on Rx cost & quality• Ease of admin with payer formularies, prices, copays, prior auth rules. • Opioid addiction risk module, alerting docs before they prescribe

Phase II• Carrier/payer programs so docs can prescribe programs, not just pills• Sets up more effective prescriber value based payment rewards • Social Determinants of Health – Next General Approach

Status: • Opioid module implemented – provider rollout now• 5000 fee licenses available• HTP includes incentives to Hospitals to connect/use• Need carriers to engage – provide access to info• CO Medical Society and others will test• CORHIO/QHN: help to connect via EHRs• OeHI: help on connectivity (part of Roadmap)

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● Commercial Rebates = 18% of Specialty Rx spend, 22% of Brand Rx spend

● Commercial payers received $179M in rebates, or 16% of 2018 spend ($1.18 B), up 50% from 11.2% in 2016. (ins only)

● Since 2016, rebates for Specialty Rx increased by 67% (1)

Rebate Pass Through Value

Source: (Kirzinger, KFF Health Tracking Poll, 2019), CIVHC Analysis 2020

Employer Rx Discounts & Rebate Negotiations through The Colorado Purchasing Alliance (TCPA)

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Members Overall Specialty Discount*

Retail Rebates** Mail Order Rebates**

Specialty Pharmacy Rebates**

<10k AWP- 13.5% to 20% $70 to $180/brand claim

$250 to $575/brand claim


10k to 100k

AWP-17% to 22% $75 to $180/brand claim



>100k AWP- 20% to 22% $120 to $180/brand claim


$1320 to 2300/brand claim

Members Retail Brand Discount

Retail Generic Discount

Mail Order Brand

Mail Order Generic

<10k AWP-16 to 19% AWP-72 to 76% AWP-20 to 25% AWP-76 to 87%

10k to 100k AWP-18 to 21% AWP-74 to 84% AWP-24 to 26% AWP-78 to 89%

>100k AWP-18 to 22% AWP-83 to 85% AWP-24 to 27% AWP-85 to 89%

Consolidation of PBMs Drives Increasing Profits – Calls to Transparency: Pricing and Rebates

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Other State Rx Legislation (passed)

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Established Affordability Boards Maryland, Maine, and New Hampshire

Importation from Canada Colorado, Florida, Maine, New Hampshire and New Mexico Vermont

Transparency and Cost Control Minnesota, New Hampshire, Utah, West Virginia, Washington, Colorado, Texas, Oregon, Vermont, and Maine

Pharmacy Benefit Managers Georgia, Indiana, and Maine

Rebates Iowa, New Hampshire, Virginia, Georgia, Colorado

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Thank you!

Next up: State Opportunities to Reduce Prescription Drug Costs, hosted by DOI Commissioner Mike Conway

We appreciate collaborative partnerships and accountability to improve health care affordability and outcomes.

Next Panel: State Opportunities to Reduce Prescription Drug Costs 8:50 am-9:30 am

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Panelists Tom Leahey, Pharmacy Office Director, Colorado Department of Health Care Policy & FinancingCaitlin Westerson, Senior Health Policy Advisor, Office of Saving People Money on Health CareDr. Sami Diab, MD, Colorado Medical Society and Associate Chair, US Oncology Breast Research Program

ModeratorCommissioner Michael Conway, Division of Insurance


January 12, 2021

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Panel: State Opportunities to Reduce Prescription Drug Costs

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● Creating an Affordability Board to study and impact prescription drug costs

● Transparency in prices, profits and rebates● Passing along rebates and related savings to employers and

consumers● Providing prescribers access to patient specific affordability

information and evidence-based guidance● Increasing value-based contracts and payments● Preparing state laws to parallel federal laws that would enable

drug importation beyond Canada and include biologics


January 12, 2021

Next Panel: Federal Opportunities to Better Control Prescription Drug Costs9:35 am-10:05 am

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Panelists Senator John HickenlooperSenator Michael BennetMarissa Schlaifer, VP of Policy and Regulatory Affairs, OptumRx (United)Dr. Gerard Anderson, PhD, Director of the Johns Hopkins Center for Hospital Finance and Management and Professor at Johns Hopkins Bloomberg School of Public Health and Johns Hopkins University School of Medicine


January 12, 2021

ModeratorKim Bimestefer, Executive Director, Colorado Department of Health Care Policy & Financing

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Panel: Federal Opportunities to Better Control Prescription Drug Costs

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● Expanding drug importation to include other countries beyond Canada and the importation of biologics

● Reforming patent and exclusivity laws and regulations that prevent competition while expediting approvals for generic drugs to enter the market

● Looking to international drug pricing models and connecting U.S. prices to other countries

● Adding price and cost consideration to the FDA approval process

● Limiting direct-to-consumer advertising


January 12, 2021

Next Session: Colorado’s Behavioral Health Task Force Priorities and Next Steps10:10 am-10:30 am

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PresentersLt. Governor Dianne Primavera, Director of the Office of Saving People Money on Health Care

Dr. Robert Werthwein, PhD, Director, Office of Behavioral Health, Colorado Department of Human Services


January 12, 2021

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Behavioral Health in Colorado: Putting People First

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The 6 pillars represent the foundation for a strong behavioral health system in Colorado

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Priority Action Items for Phase 1

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Key Items for Phase 2

Implement Care Coordination

Implement the 19 prioritized

recommendations

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Phase 3 will focus on additional implementation

The BHA will review the remaining

recommendations to determine the next set of recommendations to be

implemented.

The Blueprint will serve as a guide to reform

Colorado’s behavioral health system in future

years.

Next Panel: Helping Rural Hospitals and Communities Thrive10:35 am-11:15 am

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Panelists Will Cook, President and CEO, Vail HealthCarrie Paykoç, Director, Office of eHealth Innovation Michelle Mills, CEO, Colorado Rural Health Center Nancy Dolson, Special Financing Division Director, Colorado Department of Health Care Policy & Financing

ModeratorJohn Bartholomew, CFO, Colorado Department of Health Care Policy & Financing


January 12, 2021

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Panel: Helping Rural Hospitals and Communities Thrive

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● Rural hospitals are integral to their communities● Rural hospitals need support to help transform and evolve● HTP and the Rural Support Fund

https://www.colorado.gov/pacific/hcpf/colorado-hospital-transformation-program

● Hospitals invest in their communities ● Expanding broadband and technology infrastructure is

essential to address inequity: OeHI oehi.colorado.gov/


January 12, 2021



https://oehi.colorado.gov/

Next Panel: Helping Employers Control Health Care Costs11:20 am-11:50 am

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PanelistsRobert J. Smith, Executive Director, Colorado Business Group on HealthDick Monfort, Owner/Chairman and CEO, Colorado Rockies Cristen Bates, Senior Advisor on Affordability Partnerships, Colorado Department of Health Care Policy & Financing

ModeratorMichael Conway, Colorado Commissioner of Insurance, Division of Insurance


January 12, 2021

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Panel: Helping Employers Control Health Care Costs

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Prescription drugs are a significant percentage of employer health care costs

● Affordability Toolkit from HCPF www.colorado.gov/hcpf/affordability

● Reducing Costs of Prescription Drugs in Colorado, 2nd Ed. including an employer best practices section www.colorado.gov/hcpf/publications

● Colorado Purchasing Alliance: Contact Bob Smith [email protected]


January 12, 2021

http://www.colorado.gov/hcpf/affordability

http://www.colorado.gov/hcpf/affordability

https://www.colorado.gov/hcpf/publications

mailto:[email protected]

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Panel: Helping Employers Control Health Care Costs

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● Creating an Affordability Board to study and impact prescription drug costs

● Transparency in prices, profits and rebates● Passing along rebates and related savings to employers and

consumers● Providing prescribers access to patient specific affordability

information and evidence-based guidance● Increasing value-based contracts and payments● Preparing state laws to parallel federal laws that would enable

drug importation beyond Canada and include biologics


January 12, 2021

Thank you for attending! We will begin shortly.

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