Senate trying public-shaming approach on drug pricing

TO DEAL WITH the rising cost of pharmaceutical drugs, the Massachusetts Senate is considering two approaches, one that involves public shaming of drug manufacturers and another that tells insurers to eat the cost.

Both approaches draw on what other states are doing as they try to rein in rising drug prices. So far this year, 33 states have enacted more than 50 laws dealing with drug pricing, affordability, and access.

Colorado, Florida, Maine, and Vermont passed laws creating programs to import cheaper drugs from abroad, primarily from Canada. Other states are requiring manufacturers to publicly disclose pricing information or setting up affordability boards to review prices and take action against those companies who price their products above agreed upon thresholds. The Massachusetts Legislature approved a drug pricing initiative earlier this year, but that measure is focused primarily on containing pharmaceutical costs in the state’s Medicaid program.

The Senate bill (S. 2397) draws on many of these approaches, but its focus is the commercial health insurance market. It grants authority to the Health Policy Commission to evaluate the price of any drug costing more than $50,000 a year or any “essential drug” that either costs more than $25,000 a year or is experiencing a rapid runup in price.

If the commission determines the drug is overpriced, the bill directs the agency to privately negotiate an Access Improvement Plan with the manufacturer. The implication is that a lower price is the best way to improve access. If the negotiations are successful, no information gathered by the commission is released to the public.

Public shaming comes in to play if the manufacturer refuses to develop an Access Improvement Plan. If that happens, according to the bill, the commission can post its proposed value for the drug on its website and hold a public hearing. The drug manufacturer is required to testify at the hearing and, presumably, take a public relations beating.

The Senate bill’s other approach targets only insulin and is much more immediate and direct. Insulin costs have spiked dramatically over the last 14 years, to the point where some patients say they are paying out more than $1,000 per month for the drug. “That is unconscionable,” said Sen. Cindy Friedman, the co-chair of the Legislature’s Committee on Health Care Financing.

The Senate bill, which has many similarities to legislation approved in Colorado, would establish a four-year pilot program requiring health insurers to provide coverage for insulin with no deductibles, no co-insurance, and copays of no more than $25 a month.

While pharmaceutical officials are decrying government meddling in their industry, most health care advocates are praising the Senate bill. But not everyone is convinced it will work wonders.

Bonny Gilbert of the Greater Boston Interfaith Organization told the Boston Globe she would like to see lawmakers go beyond shaming strategies. “We are not convinced that public shaming is really going to bring costs down for patients,” she said. “Without being forced to make a little bit less, [drug companies] will be driven to find ways to increase profits.”

And Lora Pellegrini, the president and CEO of the Massachusetts Association of Health Plans, said the insulin pilot program yields savings for consumers but the costs don’t go away — they just get rolled into the insurance premiums of all customers.

“To begin addressing the underlying costs, we strongly support the transparency and oversight provisions that will hold pharmaceutical manufacturers accountable for the prices charged.”