Massachusetts Medical Society: MMS, Mass. Prescription Drug Affordability Coalition testify on drug cost bill

MMS, Mass. Prescription Drug Affordability Coalition testify on drug cost bill

(Boston, MA) April 11, 2019 – Today Health Care For All and the Massachusetts Prescription Drug Affordability Coalition provided testimony in support of An Act to ensure prescription drug cost transparency and affordability (H.1133/ S.706). This comprehensive legislation aims to make prescription drugs affordable and available to consumers, ensure pharmaceutical costs are more transparent, and contain costs for MassHealth, employers and the entire health care system.

“The price of prescription drugs continues to rise exponentially, increasing the cost of health insurance and placing a considerable burden on families and employers, as well as the state’s budget,” said Senator Jason Lewis, who is the lead sponsor alongside Representative Christine Barber. He added, “As policymakers, we have the responsibility to protect consumers and rein in runaway drug prices by opening the black box of prescription drug pricing.”

The Health Policy Commission’s (HPC) 2018 Cost Trends report showed that Massachusetts drug spending increased more than twice as much as overall health care spending last year – 4 percent compared to just 1.6 percent for all health care spending. In addition, we know that drug spending in MassHealth has doubled from $1.1B to $2.2B over the past five years, twice the rate of growth for other MassHealth spending.

“I hear often from constituents about the burden of prescription drug prices on the budgets of families and small businesses. The goal of our bill is to make prescriptions affordable and available for people in Massachusetts by increasing transparency on pricing and making the pharmaceutical industry accountable,” said House Representative Christine Barber.

Between 2006 and 2014, nationally, the price of prescription drugs rose by an average of 57 percent, and price for drugs with no generic substitutes rose by 142 percent. In just one example, the price of Humira, a common arthritis medication, rose from $19,000 a year per patient seven years ago to more than $38,000 today – a 100 percent increase. In another example, the price of the bladder infection drug Nitrofurantoin increased 400 percent just last year. The cost of the most common types of insulin have tripled in the last 10 years, with the average price at $450 per month in 2016, which has caused out of pocket costs to double.

“The prescription drug market place is clearly broken,” said Deirdre Cummings, Legislative Director for MASSPIRG. "In our recent survey of prescription drug prices, we found that prices varied by nearly 900 percent across the country for the exact same medicines."  

Evidence shows that high cost-sharing for prescription drugs leads patients to not take the drugs their doctors prescribe.

“The rising cost of pharmaceutical drugs increases the cost of health care for our patients and can often result in patients forgoing important medications prescribed to improve and save their lives. It’s time for real reform, and this bill does just that. It provides necessary transparency and real protections for the most egregious cost increases,” said Dr. Alain A. Chaoui, President of the Massachusetts Medical Society. “This bill holds all players accountable, saves the system money and improves the health of our patients, which should be the foremost objective of all legislation aimed at controlling drug prices.”

There are multiple reasons for high and growing prescription drug costs. A complex system of middlemen and rebates prevents consumers and policymakers from understanding prices being charged. Pharmacy benefit managers have a conflict of interest because the higher the price they negotiate, the bigger the rebate they keep. The brand name drug market is by nature not competitive, so there is no restraint on high prices. It can also be difficult for doctors to get objective information that is not influenced by manufacturer marketing practices as to which drugs are best for particular diagnoses and patients.

“Currently, there is little to no transparency when it comes to the actual costs required to produce a drug, and there is no mechanism or oversight to ensure that drugs are truly affordable for those who need them,” said Amy Rosenthal, Executive Director of Health Care For All. “As a result, pharmaceutical companies may set arbitrary and opaque prices for drugs, and too many people in Massachusetts cannot access these drugs due to high costs.”

This legislation includes six policies that address each of these factors driving up costs. It calls for transparency around the underlying costs to produce prescription drugs; restrains abuses of pharmacy benefit managers; authorizes the HPC to set upper payment limits to bring down the costs of unreasonably high-priced drugs; requires pharmacists to inform consumers if purchasing a drug at the retail price would be cheaper than using health insurance; provides tools to strengthen MassHealth’s ability to negotiate lower drug prices; and permanently funds a program to provide evidence-based information to providers known as  “academic detailing.”

“Far too many seniors leave the pharmacy empty-handed because the cost of their prescriptions is too high. No one should have to choose between their medication and their food or other basic needs. We must do more to ensure that everyone, seniors and their families, are able to afford the life-saving treatment their doctors have prescribed. This bill will shine a light on prescription drug pricing and give us a path to ensuring residents of the Commonwealth can access the care they need,” said Edna Pruce, Mass. Senior Action Council president, age 86, resident of Mattapan.

The number of bills being heard by the Joint Committee on Health Care Financing speaks to how important action on affordable prescription drugs is to consumers across the state. 

“It is essential that the Legislature take comprehensive action to reduce the costs of prescription drugs,” said Tim Foley, executive vice president of 60,000 member Massachusetts division of 1199SEIU United Healthcare Workers East. “We are united with coalition partners in strong support of this legislation. Taken together, this bill and these reforms are important first steps to address out-of-control prescription drug costs that negatively impact healthcare providers, consumers, and workers alike.”

A broad-based coalition of consumers, doctors and other providers have come together to support H. 1133/S. 706 because it is the most comprehensive bill to address this complex issue. All these solutions are needed to address the challenge of high drug costs and make these savings real for people.

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