Senate Will Press For Prescription Drug Cost Relief

Licensing Of Pharmaceutical Benefit Managers Also Called For In Bill

STATE HOUSE, BOSTON, NOV. 9, 2023…..Patients would pay no more than $25 for certain name-brand medications to treat some chronic illnesses and face no costs whatsoever for similar generic options under the latest prescription drug legislation set to emerge in the Senate.

Senate Democrats plan on Thursday to release a revived version of a drug pricing reform bill they have approved in two straight lawmaking sessions without securing passage in the House, the News Service has learned.

This time around, the legislation will feature new language aimed at reducing or eliminating cost burdens for Bay Staters with conditions like heart disease, asthma and diabetes, a push Senate President Karen Spilka forecast when she signaled plans to bring the bill to the floor before Thanksgiving.

Sen. Cindy Friedman, the architect of the bill, said the latest addition would cap out-of-pocket costs for some widely used medications at $25 for name-brand versions and at $0 for generic alternatives.

“We don’t know the specific drug because we’re not going to pick a drug and say, ‘You have to provide this one.’ It’s really drugs that meet certain criteria, like they are widely used, they are widely effective. It requires that you look at equity, like what drugs are beneficial for people across the diverse spectrum,” the Arlington Democrat said in an interview.

The proposal would effectively require insurers to cover the full cost of generic medications that fall under that umbrella and the full cost minus $25 for name-brand options. It would also extend to caps on what patients pay for “delivery mechanisms” to manage chronic illnesses, like needles, inhalers and monitors, Friedman said.

Friedman, who in her time as Health Care Financing Committee co-chair has called on industry power players to embrace reforms, said she does not “assume that these are going to be greater costs for the insurers” by limiting cost-sharing for chronic illness treatments.

She suggested that Senate Democrats are not too concerned with finding a compromise that works simultaneously for insurers, drug manufacturers, providers and the middlemen known as pharmacy benefit managers — some of whom blame other pieces of the industry for rising costs.

Instead, Friedman said her focus is on consumers who “cannot afford their drugs.”

“What we’re looking at is: what is the ultimate cost of the system to the person who was using it? Sometimes, what we try and do is we try and solve every individual stakeholder’s problem, which will not be successful,” Friedman said. “It has to be a holistic solution.”

Friedman described “two levers” policymakers can pull: requiring health care, services and medications to be more accessible and affordable to patients, and keeping total costs within benchmark goals set by the state’s Health Policy Commission.

“There’s momentum in the Legislature and certainly in the Senate to make sure that those two guardrails are well in place, and then the industry, the industry players, have to figure out how to work within that framework,” she said. “I would argue that there is so much money in this system that no one’s going to go home hungry if they have to start being part of the solution to reduce the costs.”

Regulators have warned in recent months that health care spending is “moving in the wrong direction” despite a 2012 cost-containment law, putting more pressure on patients and businesses. From 2019 to 2021, total health care expenditures per capita increased at an annualized rate of 3.2 percent, a notch above the benchmark goal.

Friedman said the bill is “pharmaceutical and PBM-heavy because currently, those are the two players that aren’t part of the discussion” or subject to the same kind of scrutiny from the HPC as insurers and providers, though she said other facets of the industry would still be affected.

Many other pieces of the bill the Senate will release Thursday mirror versions from prior sessions, such as launching a new trust fund to assist with prescription drug costs and empowering the HPC to more forcefully require changes when regulators deem a drug unaffordable, Friedman said.

It would also create a licensure process for pharmacy benefit managers, who have come under increasing scrutiny for the role they play brokering drug transactions.

Prescription drug costs and the role of pharmacy benefit managers emerged as a theme during the annual health care cost trends hearing the HPC hosted Wednesday.

During the hearing, HPC Executive Director David Seltz asked Amy Rosenthal of the group Health Care for All to name one priority for legislative action this session. Rosenthal replied, “Prescription drugs.”

“I think that there’s a lot of positive conversations that are happening right now. I think bringing PBMs and manufacturers into this process is something that is achievable and something that we should be thinking about,” she said.

Lora Pellegrini, who leads the Mass. Association of Health Plans that represents insurers, told the News Service she is “not sure that the Legislature has an appetite to do everything they can to the maximum extent possible on the pharmaceutical industry.”

“I’m also not sure there’s an appetite for capping the highest-paid providers, but for this to work and to be successful, that’s what we need to do,” she said about efforts to rein in care costs. “We’ve sat here now for 10 years listening to the same stuff, so if you’ve been around long enough, you’re hearing the same stuff over and over again. Why hasn’t anything changed? There needs to be a legislative appetite to get serious about this, and I think today the HPC did an excellent job really presenting the moral case of why this is needed.”

In each of the past two lawmaking terms, the Senate approved prescription drug pricing legislation but it never received a vote in the House, where Democrats have instead set their sights on trying to overhaul the process for reviewing hospital expansions.

Asked why the public should expect a different outcome the third time around, Friedman replied, “Actions speak louder than words.”

“I appreciate people’s skepticism and, you know, there’s probably a fair argument, but what happened in the past does not necessarily define the future. And remember, mental health took a while,” she said, referencing mental health parity legislation that crossed the finish line last session after years of support in the Senate and inaction in the House.

Friedman — who once engaged in a high-profile feud with a previous House counterpart — said her relationship with current Health Care Financing Committee Co-chair Rep. John Lawn is “excellent.” While she said she could not “presume” the likelihood of House action on the bill, Friedman said she and Lawn are “working together on the same page.”

In the closing stretch of the last term, negotiators suddenly found consensus on both a House-priority sports betting legalization bill and the Senate-priority mental health reform bill. Asked about the process of a this-for-that deal for the prescription drug pricing bill this time around, Friedman did not rule it out.

“I know they are very interested in [determination of need] and HPC reform, and I am right there with them,” she said. “So maybe they might have a different focus on which aspect to look at, but right now — again, I can’t predict the future — right now, we sort of have an understanding of what the major issues are that we need to look at. They may have a different focus than we do, but it is around health care.”

“Is there a swap? You could call it a swap, you could call it a, ‘Oh, great, you’re doing this, I’m doing that,’ you could call it whatever you want,” Friedman added. “When you do this long enough, you kind of coalesce around the same issues.”