Friedman, Senate push transparency in pharmaceutical drug costs

Massachusetts has taken lots of steps to rein in runaway spending on healthcare, but one area has largely avoided state regulation: prescription drugs.

“If we’re really going to have a complete picture of what affects health care costs and we are committed, which we are, to our cost growth benchmarks, we have to look at pharmaceuticals and pharmacy benefit managers as part of that picture,” Sen. Cindy Friedman, Senate Chair of the Committee on Health Care Financing, said on this week’s Codcast.

The Massachusetts Senate on Thursday passed a bill aimed at slowing the growth in spending on prescription drugs and reducing costs for consumers. A similar bill passed the Senate last session, but not the House.

Friedman said the COVID pandemic derailed lots of bills last year, but she is hopeful the House will consider the prescription drug issue this time around. “There are certainly people from the House side that care a lot about this,” she said.

The most recent data from the Center for Health Information and Analysis pegged 2019 pharmacy spending in Massachusetts at $10.7 billion, an increase of 7.2 percent over the prior year. But counting the rebates that drug companies provide, spending on pharmaceuticals was up 3 percent. The pharmaceutical industry has pointed to the 3 percent figure to suggest that their spending is within the range that state officials want to see.

But Friedman said the discussion of rebates just highlights the larger problem: no one knows how drug prices get set. “While we require insurers and hospitals and providers to show us what their costs are and how money is spent, we don’t require that of the pharmaceutical companies. So we have no idea,” Friedman said.What are the rebates? What happens to the rebates? Why are there rebates? Show us what the true cost of the medication is.”

Friedman said she hears concerns that controlling drug prices will stifle innovation in new drugs, but there also needs to be a balance in making sure people can afford the cost of insurance – a cost that is influenced by the price of drugs.

The Senate bill, referred to as the PACT Act, which stands for An Act relative to Pharmaceutical Access, Cost, and Transparency, would create a process through the Health Policy Commission whereby drug companies would have to submit information about pricing. The commission would identify drug prices it deems too high and make recommendations. The commission would work with drugmakers, similar to how it now works with hospitals, to agree on steps to bring prices down.

The bill also caps copays for insulin at $25 for a 30-day supply. Insulin is a daily, life-saving medication taken by diabetics that has seen prices rise over the years because of market forces, even though it is not a new medication.

The bill would provide state oversight of pharmacy benefit managers, who act as middlemen between drug manufacturers and insurers, determining prices and formularies. PBMs are not currently subject to state regulation. “They’re setting not only the prices, but the access to those drugs, and that is a black hole,” Friedman said.

There are other provisions involving topics including mail-order pharmacies and specialty pharmacies.

Friedman said she believes the state has a responsibility to control overall health care costs and the costs to consumers. “I think more and more, it’s the role of the state to try to come up with measures and ways to control some of these costs based on real data and real information,” Friedman said.

SHIRA SCHOENBERG

 

FROM COMMONWEALTH

Meet the mayor: Katjana Ballantyne, the new mayor of Somerville, traces her origins to community activism and strongly believes in inclusive politics, which can often get messy. Read more.

“Unrealistic” deadlines: Gov. Charlie Baker signs a COVID-targeted supplemental spending bill, but vetoes a number of provisions dealing with deadlines that he called unrealistic. Read more.\

Driver’s license bill advances: A bill authorizing undocumented residents of Massachusetts to obtain driver’s licenses makes it out of the Transportation Committee and is now headed for a vote in the House. Supporters say the measure is focused on safety, not immigration, because many of the undocumented drive anyway. With licenses, they would be required to obtain insurance and receive driver training. Read more.

Pause on overpayments sought: A pair of lawmakers urge the Baker administration to stop pursuing unemployment benefit overpayments for the next five months to provide time to evaluate federal guidelines on waiving overpayments where the recipient was not at fault. Read more.

Fare-free survey: Most of the passengers interviewed on the MBTA’s Route 28 bus like the fact that fares have been eliminated, but some, including a driver, express concerns. Read more.

OPINION

Big step back: Deborah Ramirez of Northeastern School of Law and Sandra Susan Smith of the Harvard Kennedy School says the Supreme Judicial Court took a big step backward on racial justice with a recent decision on traffic stops. Read more.

A plug for research: UMass President Marty Meehan makes the case for why research universities are needed in Massachusetts, saying they drive innovation, spur change, and bolster the economy. Read more.

Call for MBTA planning department: Brian Kane of the MBTA Advisory Board says the T needs its own planning department and shouldn’t be relying on the planning department of the Massachusetts Department of Transportation. Read more.

Pharmacy bill misguided: William Smith of the Pioneer Institute calls the Senate’s pharmacy legislation misguided, since it seeks to address a problem that doesn’t exist – rising pharmaceutical prices. Read more.

 

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