November 14 2019

Bill Tackling Costs of Prescription Medication Passed in State Senate


The Massachusetts State Senate, joined by Sen. Cindy Friedman who’s district includes Burlington, has taken a step to address the rising costs of prescription drugs. 


On Thursday, the Senate passed An Act relative to Pharmaceutical Access, Costs and Transparency (PACT Act), comprehensive pharmaceutical cost control legislation aimed at addressing the high and rapidly increasing costs of prescription drugs, a release from Friedman’s office states. 


“This bill will bring us one step closer toward addressing rising costs within our healthcare system that continually impact patients’ ability to access the care they need,” Senator Friedman, co-chair of the Joint Committee on Health Care Financing, said. “By reining in prescription drug costs and increasing transparency and oversight within the pharmaceutical industry, we can drive down costs and improve patient outcomes. I want to thank Senate President Spilka and Chair Rodrigues for their hard work and collaboration throughout this process. I look forward to advocating for this important initiative throughout the remainder of this session.”


High drug prices act as barriers to patients, who often cannot access the medications they need due to prohibitive costs, the release states. The PACT Act contains enhanced accountability tools to address these barriers. Currently, Massachusetts cannot effectively identify high-cost drugs that substantially impact patient access, resulting in fiscal challenges and public health risks for consumers who cannot afford the rapidly rising costs of prescription drugs. This legislation directs the Health Policy Commission (HPC), in consultation with stakeholders, to establish a process for identifying drug price thresholds that pose a public health risk. It allows the HPC to determine a proposed value for those drugs and engage with pharmaceutical manufacturers in an Access Improvement Plan process to increase patient access to necessary medications. 


The legislation offers immediate price relief for insulin - a life sustaining drug for the one in 10 Massachusetts residents living with diabetes who must take it daily or else face substantial health risks and complications. Consumers have recently been experiencing sharp insulin price increases, resulting in out-of-pocket costs that can easily reach $1,000 or more per year for someone who is in a high-deductible plan or underinsured. 


“This financial burden often forces a person to engage in the dangerous practice of severely limiting or forgoing altogether the use of insulin,” the release states. “To address this problem, the PACT Act limits out-of-pocket spending by eliminating deductibles and coinsurance for insulin and capping co-pays at $25 per month.” 


The bill seeks to bring oversight to pharmacy benefit managers (PBMs), who serve as brokers or “middle-men” in the drug transaction process and play a major role in how drugs are tiered and priced on insurance plans, the release states. PBMs are not currently subjected to rigorous oversight by the state, making it unclear if PBMs act in the best interest of the consumer or health plans when they negotiate with pharmaceutical manufacturers on drug prices. The PACT Act authorizes the Division of Insurance to license and regulate PBMs and establish sanctions for PBMs that fail to meet certain standards. 


Under current law, pharmacists are not required to disclose to consumers when a lower price is available for a prescription drug. As a result, consumers sometimes pay more using their insurance plan than they would if they paid the pharmacy’s retail price for a prescription. The PACT Act addresses this by requiring pharmacists to notify patients if the retail cost of a medication is less than their cost-sharing amount, such as the co-pay, deductible or other amount required through an insurance plan, thereby increasing transparency and immediately impacting consumers by allowing them to access medications at a lower price. 


The PACT Act requires pharmaceutical companies to notify the state in advance of new drugs coming to market, and of significant price increases for existing drugs. With advanced notification, the state’s MassHealth program can better prepare for potential cost increases by exploring ways to mitigate the cost or negotiating improved prices. In addition, advance notification will enable the HPC to focus on these cost drivers at their annual Cost Trends Hearings. 


This bill also empowers the Center for Health Information and Analysis (CHIA) to collect a range of drug cost information from pharmaceutical manufacturers and PBMs and include its findings as part of its annual health care cost report. The report does not currently include comprehensive data on drug costs. Collecting this data will allow policymakers and consumers to better understand the role of pharmaceutical companies in driving costs moving forward. 


Under the PACT Act, pharmaceutical manufacturing companies and PBMs will be included in the HPC annual Health Care Cost Trends hearing process, which has been instrumental in increasing transparency and accountability for health care providers and insurers, and in helping the state to meet its annual health care cost growth benchmark. By participating in this process, the pharmaceutical industry—both manufacturers and PBMs—will testify publicly on the factors that influence drug costs and provide supporting documents. The HPC will use this information to analyze how pharmaceutical costs impact the state’s health care market. 


This bill requires the HPC to create an academic detailing program to educate prescribers and other medical professionals on best practices to improve patient outcomes and reduce costs through better prescribing practices. Academic detailing programs have a long history of success in using ongoing prescriber education to ensure that treatment plans for costly conditions align with the most up-to-date impartial, evidence-based research. 


The legislation now moves to the House of Representatives for consideration.


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