BOSTON – The Massachusetts Senate passed pharmaceutical cost control legislation last week.
An Act relative to Pharmaceutical Access, Costs and Transparency aims to address the high, and increasing, costs of prescription drugs.
“Prescription drugs costs really remain a significant burden for residents on Cape Cod, on the Islands and across Massachusetts,” said Cape and Islands State Senator Julian Cyr (D-Truro).
Cyr said the bill would lower prices, increase access to medication and enhance transparency and oversight over the pharmaceutical industry.
“We apply many of the same transparency and oversight measures that we do successfully to rein in healthcare costs elsewhere in healthcare,” he said.
“We’re now applying that in the pharmaceutical area.”
The 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.
Cyr said there have been some gross excessive price hikes, including insulin.
Insulin is a life sustaining drug for the nearly 10 percent of residents living with diabetes.
Consumers have recently experienced a sharp spike in prices for insulin, which has resulted in out-of-pocket costs that can reach $1,000 or more per year for someone on a high-deductible plan or is uninsured.
“The cost of insulin has been astronomically increased,” Cyr said. “This is not a new medication, but it’s a lifesaving medication.”
The PACT Act limits the out-of-pocket spending by eliminating deductibles and coinsurance for insulin and capping co-pays at $25 per month.
“Some of these drugs do cost a significant amount of money to bring to market – tens of millions of dollars – and that may be fair,” Cyr said. “But in the case of drugs like insulin, that is not fair.”
The bill seeks to impose oversight to pharmacy benefit managers, who serve as brokers, or “middle-men,” in the drug transaction process. They play a large role in determining how drugs are tiered and priced on insurance plans.
The PBMs are current not subjected to oversight by the state. That makes it unclear if they are acting in the best interest of the consumer or health plans when negotiating drug prices with manufacturers.
The PACT Act authorizes the Division of Insurance to license and regulate PBMs and establish sanctions for individuals who 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.
This sometimes can cause consumers to 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.
The PACT Act also requires pharmaceutical companies to notify the state in advance of new drugs coming to market, and of significant price increases for existing drugs.
Senators say the state’s MassHealth program can better prepare for potential cost increases by exploring ways to mitigate the cost or negotiating improved prices with advanced notification.
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. The 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 helped to increase transparency and accountability for health care providers and insurers, and in helping the state to meet its annual health care cost growth benchmark.
Cyr said Massachusetts has a proud tradition of leading the way when it comes to healthcare reform in the United States.
The legislation will now head to the House of Representatives for consideration.
To track the progress of the bill, visit https://malegislature.gov/Bills/191/S2397.
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