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House Appropriations reviews H.577 to set up Vermont prescription drug discount card; $50,000 implementation request
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Summary
The House Appropriations Committee walked through H.577, which would let the State Treasurer join a multi‑state prescription drug discount card program, require insurers/PBMs to credit cash purchases toward deductibles, and fund initial outreach with $50,000 in FY2027. No committee vote was taken; fiscal language will be finalized after Town Meeting.
The House Appropriations Committee on Feb. 24 reviewed H.577, an act to establish a Vermont Prescription Drug Discount Card Program that would let the State Treasurer cooperate with other states, territories and nongovernmental organizations to negotiate lower pharmacy counter prices.
Jen Carby of the Office of Legislative Counsel led a page‑by‑page walkthrough of the bill and described two committee amendments: a 'strike‑all' from the House Healthcare Committee and a Ways and Means amendment that removes a standalone special fund and directs any program monies into an existing Financial Literacy and Economic Empowerment Trust Fund. Carby said the Ways and Means amendment also removes prior draft language that would have allowed the treasurer to set participant fees.
The bill directs the Treasurer’s Office to administer a program—committee materials alternately transcribe the vendor name as 'AwayRx' or 'RareX'—that partners with a pharmacy benefit manager, identified in committee testimony as Navitus, to negotiate lower prices for consumers at the pharmacy counter. Peter Drummond, Clerk of Legislative Affairs in the Treasurer’s Office, told the committee that Navitus negotiates the consumer price and that the vendor arrangement has been used in other states, including Oregon.
A central consumer protection in the bill clarifies a 'copay‑accumulator' practice: if a Vermont resident pays a cash price using the discount card, the amount the individual paid would be required to be counted toward their deductible and out‑of‑pocket maximum under their health plan. The bill also requires insurers and pharmacy benefit managers to make a proof‑of‑payment form readily available on their websites and to notify covered individuals at least annually that consumers are responsible for submitting proof if they want that payment attributed to their insurance cost‑sharing totals.
During Q&A, members pressed presenters on mechanics and reach. Committee members asked whether Medicare beneficiaries could use the card; Carby and others said beneficiaries could use the card when it was cheaper but that the practical effects for Part D and Medicare Advantage enrollees could differ. Drummond and witnesses said the program’s uptake is sensitive to outreach: states that implemented the model without dedicated marketing saw lower participation, prompting the bill’s request for an initial appropriation.
Section 5 of the bill, as drafted for the committee, would appropriate $50,000 from the general fund in fiscal year 2027 to the Treasurer’s Office for developing and implementing the program. Joint Fiscal Office staff asked the committee to clarify whether that sum is intended as a one‑time appropriation or an ongoing base appropriation; committee members and staff said the fiscal note will reflect that determination.
Carby said the bill includes an implementation/reporting requirement: beginning in January (dates specified in the draft), the Treasurer’s Office must report to the General Assembly and the relevant health committees on program participation, participating pharmacies, estimated savings achieved and any recommendations for administration and funding. The Ways and Means amendment removes language that would have allowed the treasurer to set participant fees and instead authorizes deposits into the renamed trust fund from transfers, gifts, grants or cooperative arrangements to defray administrative costs.
The committee did not take a vote on H.577 on Feb. 24. Members recessed the review until after the Town Meeting break so they could consider the fiscal note, clarify whether the $50,000 is one‑time or base funding, and consult further with the Treasurer’s Office and JFO before voting.
Quotes from the hearing include the chair’s procedural note, 'We are not going to vote right now, but we'll do a walk through so that we understand the bill,' and Jen Carby’s summary, 'we are looking at H.577, an act relating to establishing the Vermont prescription drug discount card program.' Peter Drummond described the vendor arrangement as, 'a collaboration … that works with a pharmacy benefit manager called Navitus, to implement this program.'
Next steps: the committee will receive the fiscal note and return to H.577 after Town Meeting to consider funding options and any final technical edits before a vote.
