Feds reject Baker bid to rein in pharmacy costs

State sought to restrict access to some MassHealth drugs

THE FEDERAL GOVERNMENT on Wednesday rejected a bid by the Baker administration to rein in pharmacy spending by restricting which drugs would be covered under its MassHealth program.

“While it is disappointing that our request to more effectively control rising pharmacy costs was not approved at this time, we remain committed to finding more innovative state-based solutions to reduce the growth in drug spending while maintaining access to necessary medications,” said a Baker administration spokeswoman in a statement.

Pharmacy spending is a growing concern with MassHealth, the state’s Medicaid program. In just the last five years, pharmacy spending has doubled from $1.1 billion to $2.2 billion. Officials say a significant part of the spending growth is driven by a relatively small number of drugs with little or no competition.

The Baker administration sought a waiver from the Center for Medicare and Medicaid Services to establish its own policies about which drugs would be covered.  Normally, Medicaid drug programs cover all medications with only minor restrictions. Analysts say the Massachusetts request was the first of its kind in the nation.

Tim Hill, the acting director of the Center for Medicare and Medicaid Services, said in a letter to state officials that the agency would be willing to consider such an arrangement but only if it was a pilot or demonstration project and the state agreed to withdraw from a federal drug rebate program.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Baker administration officials declined to go along with those conditions. They said the federal drug rebate program is effective in controlling the cost of all but about 1 percent of the drugs on the market. That 1 percent, however, consists of high-cost drugs that are new to the market and have little or no competition.

Officials said 30 top drugs currently account for $600 million in MassHealth pharmacy costs. The officials said another 19 medications that have either recently been approved or nearing approval are expected to increase costs more than $80 million annually.