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.
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.