Massachusetts Senate passes prescription drug bill

By Katie Lannan

FEB. 10, 2022…..A bill tackling prescription drug costs and access easily cleared the Senate on Thursday, though it now faces an uncertain path as it moves to the House.

The bill would require pharmaceutical companies to notify the state before bringing new drugs to market or significantly hiking prices for existing drugs. It would pull drug manufacturers and pharmacy benefit managers into state agencies’ reviews of health costs, cap out-of-pocket insulin spending at $25 a month, and create a trust fund to help cover costs of prescription drugs for certain chronic conditions.

“If we’re going to continue to make progress in reducing the cost of health care, we must take meaningful action to reduce the cost of drugs,” said Sen. Cindy Friedman, the Senate chair of the Health Care Financing Committee.

The bill, which passed on a 39-1 vote with Sutton Republican Sen. Ryan Fattman in opposition, builds on similar legislation the Senate unanimously passed in 2019. That bill eventually died in the House.

While Speaker Ron Mariano has championed a bill that would step up oversight of certain hospital expansions, House leaders this session have not identified the pharmaceutical side of health care as a legislative priority, and the two branches for several years have largely pursued different approaches to health policy.

Senators seemed to allude to the bill’s murky future while debating a drug coupon amendment from Minority Leader Bruce Tarr, which failed on a 7-31 vote.

Friedman and Senate Ways and Means Chair Michael Rodrigues said extending the authorization for prescription drug coupons is typically done through a state budget rider. One reason to put it in the annual spending bill is because “we know that that vehicle will eventually get done and get to the governor’s desk,” Rodrigues said.

Tarr replied that he was optimistic the Senate’s drug bill “will have viability in the legislative process.”

“I’m not ready to say that this is not a viable bill,” the Gloucester Republican said.

The Massachusetts Prescription Drug Affordability Coalition, which includes Health Care for All, the Massachusetts Medical Society, AARP Massachusetts and other groups, said its members hope “the full Legislature will take swift, decisive action to support consumers by reining in rising drug costs and lowering out-of-pocket costs for chronic disease treatments.”

The coalition said the bill “takes a targeted approach to addressing excessive and increasing prescription drug prices and would bring needed financial relief to consumers for certain chronic condition medications, while also maintaining the vital resources needed for investments in innovation.”

Cheered by consumer advocates as a step toward lessening the burden that medication costs place on family budgets, the bill (S 2615) is opposed by pharmaceutical industry groups that argue the Senate is taking the wrong tack.

Meanwhile, the Massachusetts Association of Health Plans offered a mixed review, saying the bill proposes “vital steps to understanding the true costs of prescription drugs and holding manufacturers accountable for excessive price increases” while raising concerns with some other sections.

Total health care spending in Massachusetts rose to $64.1 billion in 2019, according to the Center for Health Information and Analysis. Gross pharmacy spending totaled $10.7 billion, up 7.2 percent from 2018. Factoring in prescription drug rebates brings the pharmacy spending total down to $8.3 billion, or an increase of 3 percent from the previous year.

In their criticisms of the bill, the Pharmaceutical Research and Manufacturers of America and Massachusetts Biotechnology Council both point to the fact that net of rebates, pharmacy growth landed below the state’s annual cost-control target for health care, while other categories, like hospital outpatient spending, exceeded that benchmark.

PhRMA officials said in a statement that the Senate bill “ignores” that spending data and that it “will not provide patients immediate relief at the pharmacy counter.”

Zach Stanley, MassBio’s chief of corporate affairs, suggested that policymakers look at other areas, like mandating that insurers share prescription drug rebates with patients.

“Cost should never be a barrier to patients accessing the care they need,” Stanley said. “Unfortunately, in seeking to solve the challenges people face paying for their prescription drugs, the Senate has misdiagnosed the problem: patients’ out-of-pocket costs for prescription drugs are set by insurance companies, not biopharma companies.”

MassBio has new leadership since the last time the Senate sought to tackle drug costs. The industry group’s new CEO, Joe Boncore, was one of the 40 senators to vote in favor of the body’s last pharmaceutical bill in 2019.

Friedman has described measures in this year’s bill as efforts to “level the playing field,” saying it seeks to hold drug companies to the same accountability and transparency standards already in place for hospitals and insurers.

Under the bill, drug manufacturers and pharmacy benefit managers would be included in the Health Policy Commission’s annual cost trend hearings, where they would provide public testimony, and another state agency, the Center for Health Information and Analysis, would be empowered to collect information from manufacturers and PBMs and analyze that material as part of its annual health care cost reports.

The bill also calls for PBMs to be licensed and regulated by the Division of Insurance.

Sen. Jamie Eldridge called it “outrageous” that PBMs currently operate without licensing and oversight in Massachusetts and said the bill includes measures supporting independent pharmacies, businesses he described as critical to their communities and able to give customers more personal attention than larger chains.

Senators said the bill would allow independent pharmacists to become licensed to dispense specialty drugs and contract with insurance carriers to provide specialty medications to patients. It would also allow any network pharmacy to contract with carriers to provide mail-order prescriptions, a change from what senators described as a current situation where carriers determine what pharmacies are available to patients seeking to fill their prescriptions by mail.

Lora Pellegrini of the Massachusetts Association of Health Plans said her group is “deeply concerned” with provisions in the bill that “would remove health plans’ ability to negotiate the lowest prices for their members and ensure access to safe, high-quality prescription drugs through specialty pharmacies and mail-order delivery.”

“Allowing small retail pharmacies to act as specialty pharmacies and requiring health plans to include them in existing networks will threaten patient safety and lead to loss of savings from specialty pharmacies where volume is provided in exchange for lower price,” Pellegrini said. “Likewise, we have serious concerns that the any willing mail order provisions in the bill will require Massachusetts consumers to pay more for their existing prescriptions from their mail order pharmacy without any improvements in quality since the bill requires health plans to equalize cost-sharing between mail-order pharmacies and community retail pharmacies.”