Frozen Formulary Legislation Could Raise Rx Costs in Connecticut

(Washington, D.C.) — A new report, prepared by the research firm Milliman for the Pharmaceutical Care Management Association (PCMA), analyzed the financial impact of broad “Frozen Formulary” legislation in the fully insured commercial market on a nationwide basis. This study found that “Frozen Formulary” legislation, which would limit midyear formulary changes, could increase nationwide prescription drug costs for employers and plan sponsors by approximately $4.3 billion to $7.1 billion over the next five years. If these results were used to estimate the proportional impact for Connecticut, broad “Frozen Formulary” legislation in that state could increase employer and plan sponsor prescription drug costs in the fully insured commercial market by approximately $10 million in 2021 and $70 million over the next five years.

The Milliman report, “Estimated Cost of Potential ‘Frozen Formulary’ Legislation,” is significant as Connecticut legislators consider several “Frozen Formulary” bills, HB 5119, HB 5346, SB 24, and SB 200, that would prevent coverage changes to existing prescription drugs even when equally effective, more affordable alternatives become available. This type of legislation could result in higher premiums and cost-sharing for Connecticut patients and higher spending on medications for Connecticut employers and others providing coverage for patients in the fully insured commercial health insurance market. The Milliman report did not estimate the cost impact of the bills specifically and did not study Connecticut in particular.

“Pharmacy benefit managers (PBMs) and health plan sponsors need the flexibility to cover new drugs that become available in the marketplace,” said PCMA President and CEO, JC Scott. “Implementing a mandate for health plan sponsors would grant drug manufacturers the ability to charge any price with no incentive to provide price concessions on their drugs to make them more affordable for Connecticut patients. Market forces that help drive down the cost of drugs will be eliminated.”


PCMA is the national association representing America’s pharmacy benefit managers (PBMs).  PBMs administer prescription drug plans for more than 266 million Americans who have health insurance from a variety of sponsors including:  commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, Medicaid plans, and others.