Massachusetts Medical Society: Testimony in Support of An Act to Ensure Prescription Drug Cost Transparency and Affordability

Testimony in Support of An Act to Ensure Prescription Drug Cost Transparency and Affordability

The Massachusetts Medical Society wishes to be recorded in strong support of Senate bill 760 and House bill 133 which would offer a comprehensive and meaningful approach to the high and rising costs of prescription drugs that at times impede the ability to provide the best quality of medical care possible to the residents of Massachusetts.

Prescription drug costs are a major impediment to patients’ access to medically indicated care, and a high priority for the Medical Society. The Health Policy Commission’s 2018 Cost Trends Report showed that, while the state’s Total Health Care Expenditure growth came in at 1.6%, well under the 3.6% rate set by the Commission, the growth of spending on prescription drugs remained high, at a 4.1% increase.[1] Prescription drug costs are one of the major remaining areas of health care spending in the state that have not yet been curtailed. 

This proposed legislation would address those problems, through several mechanisms. This bill offers the most comprehensive collection of provisions aimed at increasing transparency of pharmaceutical manufacturers and pharmacy benefit managers (PBMs) to shine light on areas of history data opacity in the pharmaceutical manufacturing and sales continuum such as drug rebates, research and development and marketing costs, and various rebates and fees in the PBM market. Massachusetts has benefited from unprecedented levels of transparency for health insurers, hospitals and physician organizations through many aspects of Chapter 224. This bill would provide analogous levels of transparency to the one areas of the market that been driving the most significant cost increases over the past several years. 

MMS also supports authorizing the HPC to set upper payment limits that insurers can pay for drugs that have been deemed by the state after an extensive process to be “unreasonably high-priced” and without justification. Drug costs need serious action, and this proposal created a balanced, meaningful intervention for the most concerning cases. 

The MassHealth program needs real tools to combat its rising pharmacy costs. MassHealth prescription drug spending has nearly doubled from ~$1.1B to ~$1.9B since 2012, twice the growth vs. other MassHealth spending. New York state’s Medicaid program saw significant savings from a program similar to the one proposed in this legislation to allow for negotiation of supplemental rebates. This proposal could help further constrain spending for the MassHealth program, which accounts for 40% of the state budget. Cost savings could allow the state to further expand access to health care, or to fund other proposals such as education or transportation.

The MMS has strong policy in support of this proposed legislation. MMS policy states, “The MMS supports efforts to decrease the costs of medications for our patients. Our policy is particularly strong on transparency of drug costs with respect to direct-to-consumer advertising:

“The MMS in its effort to reduce unnecessary medication costs for patients will advocate that all direct-to-consumer advertising expenses by pharmaceutical companies be reported publicly based on uniform accounting procedures, and advocate that such costs shall not be passed on to the public, thereby eliminating increased pricing to the consumer.”

“The MMS will collaborate with other state and national medical societies to request that all relevant government agencies require reporting for all direct-to-consumer advertising expenses, and review the pharmaceutical companies' drug development costs and advocate that the direct-to-consumer advertising expenditures are not included in the pricing structure of any pharmaceuticals.”

The MMS urges the Joint Committee on Health Care Financing to support the above referenced legislation, to ensure that citizens of the Commonwealth receive continued access to the prescription drugs required to maintain their health and safety.


[1] https://www.mass.gov/files/documents/2019/02/20/2018%20Cost%20Trends%20Report.pdf

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