Of more than 100 health care-related bills currently working their way through the Maine Legislature, few are as concerning to Maine businesses as LD 1053, An Act to Ensure That Rebates from Prescription Drug Manufacturers Are Passed on to Patients at Pharmacies.

In a nutshell, the bill does exactly what the title suggests: It requires insurance companies and pharmacy benefit managers to apply drug rebates at the pharmacy counter to offset consumer cost sharing. While helping patients to access needed medications is certainly a laudable goal, the ultimate impact will be higher costs for commercially insured people and a significant boost in the utilization of high-cost drugs.

For context, Maine already has a law that requires carriers to use drug rebates either to defray member costs at the point of sale or to reduce premiums for all plan members. Wisely, the vast majority of plans opt to defray costs for everyone on their plan.

This is for a few reasons. First, applying rebates to individual member cost sharing creates significant inequalities based on individuals’ health conditions.

For instance, a person with hypertension is likely taking a generic drug that does not have a rebate, and thus they would be subject to whatever copay or deductible is set by their plan. Their co-worker with IBD, however, is likely taking a specialty medication for which there is a rebate, and their copay or deductible would be covered thanks to LD 1053. This bill would create a system of winners and losers based solely on whether or not the drugs patients are prescribed generate rebates.

Second, because rebate dollars in excess of the member’s cost share would be returned to pharmaceutical manufacturers, the offsetting effect they would otherwise have had on premiums would be lost. Health plan actuaries estimate that this would increase premiums for every fully insured employer and commercially insured individual by 7-8% beyond what is already expected to be a difficult year for health care trend.

The bill may be amended, as it was in its prior incarnation as LD 1165 last year, to return excess rebate dollars to the plan, but the bill would still add 1-2% onto an already painful premium trend. Last year, premiums in the small group market increased by 9.4%, and a similar increase is expected for 2026.

Lastly, and perhaps most importantly, LD 1053 creates a powerful incentive for patients to opt for high-cost, rebatable drugs over lower-cost generics and biosimilars.

Take a patient with rheumatoid arthritis. Under this legislation, that patient would have the choice of taking Humira, which in our book of business costs an average of $8,304 per patient per month, for free, or they could pay a $100 copay to take a biosimilar that costs an average of $1,315. It doesn’t matter to the patient that their employer is on the hook for the excess cost of Humira ($7,204); understandably, the decision will come down to which drug they can get for free.

This issue is at the heart of why rebates exist in the first place. Manufacturers pay rebates to health plans, pharmacy benefit managers and employers to ensure their drugs are put on formulary — often in preferred positions (with lower member cost sharing) when less expensive, equivalent generic drugs or biosimilars come to market.

Actuaries have not accounted for the impact of increased high-cost drug utilization in their estimates, so I believe they understate the cost of this bill. And if patients move en masse from generics and biosimilars to brand drugs, I expect we will see Rx costs skyrocket. Those increased costs will be felt not only by employers who already struggle to afford health care benefits, but also by consumers in the form of higher copays, coinsurance and deductibles.

At a time when 38% of Mainers report that they are skipping or delaying going to the doctor when they were sick due to costs, and nearly one-third struggle to pay for basic necessities like food, heat, or housing due to medical bills, we cannot allow this well-intentioned but misguided bill to become law.