Mass. House unanimously passes prescription drug cost overhaul
Prescription drugs are seen as the primary driving of rising health insurance costs.
Reining in prescription drug prices and subjecting industry middlemen to greater scrutiny are the next major health care reforms en route to private negotiations after the House unanimously approved legislation Wednesday.
Representatives voted 158-0 on a pharmaceutical cost control and oversight bill (H 4891), another mile marker along the way to sweeping reforms as the Legislature settles into its final week for major business.
The Senate approved its own version of the bill in November -- which at the time was the third straight session senators pursued prescription legislation without buy-in from their colleagues in the House -- and top Democrats now face a condensed timeline to agree to a final package.
In the next seven days, lawmakers will need to iron out differences between House and Senate proposals that aim to implement substantial new guardrails around pharmacy benefit managers, cap out-of-pocket costs for medications that treat certain chronic conditions, and prevent the emergence of "pharmacy deserts."
Health Care Financing Committee Co-chair Rep. John Lawn, the House's point person on many health care matters, said pharmacy benefit managers or PBMs wield "enormous power and influence over patients' access to drugs and the prices they pay," yet face little obligation to operate in a transparent manner.
The bill would require PBMs to be licensed every three years. Both PBMs and pharmaceutical manufacturers would be subjected to oversight by the Health Policy Commission and the Center for Health Information and Analysis, which regularly collect data and publish reports examining other segments of the market.
The legislation also prohibits "spread pricing," which Lawn described as pharmacy benefit managers charging insurers more than they pay to pharmacies for a drug and keeping the difference for themselves. PBMs and insurers would be required to pass at least 80 percent of rebate values to patients at the point of sale.
Three PBMs -- CVS Caremark, Express Scripts and Optum RX -- manage nearly 80 percent of prescriptions filled in the United States, according to the Federal Trade Commission. Company leaders and their allies argue that they help drive prices down for consumers by wielding their influence in negotiations with drug manufacturers.
Another key proposal in the bill would limit how much patients pay out of pocket for some of the most commonly used medication. Insurers would need to offer one generic drug with no cost-sharing to treat diabetes, asthma and the most prevalent heart conditions among its members, plus one name-brand medication in each of those three categories with co-pays capped at $25 per 30-day supply.
"The co-pay cap proposal would bring direct relief to individuals and families who rely on chronic condition medications to stay healthy and out of the hospital, and it would be a significant step forward in the fight for health care equity across the Commonwealth," Amy Rosenthal, executive director of the Health Care for All group, said. "The relief would be felt most acutely by people of color and low-income residents who are more likely to be impacted by one of the chronic conditions and more likely to report challenges affording medications."
Rep. F. Jay Barrows, a Mansfield Republican, said at the start of debate that he would support the bill but hopes "we can clean it up and make it better" during the House-Senate negotiating process, describing concerns about a lack of input from business leaders.
The House dealt with all of the proposed changes to the bill using a single "consolidated" mega-amendment that representatives approved with one vote. Measures tucked into that package include language empowering the state to review so-called "pharmacy deserts," or areas where the nearest pharmacy is far enough away to pose an obstacle to residents, and pharmacy closures that would create such deserts.
Rep. Christopher Worrell of Boston, who filed one of the original amendments seeking minimum notification periods about pharmacy closures, recounted the "earth-shattering" news in his district late last year that Walgreens planned to shutter a Roxbury branch.
"We are now seeing a shift in the marketplace and a switch to virtual care due to COVID-19, and it is no longer financially viable for these big corporations to keep these franchises open. Unsurprisingly, they're closing them in Black and brown communities," Worrell said.
A spokesperson for the Patients Not PBMs coalition praised the vote, saying a lack of existing transparency has increased costs on patients and independent pharmacists.
"Today's action by the House puts Massachusetts on the doorstep of being first again in passing much needed reforms that will protect patients and pharmacists," the spokesperson said.
The prescription drug and PBM bill adds to the Legislature's health care focus in the home stretch of formal sessions. Legislative leaders earlier on Wednesday finished appointing negotiators -- led by Lawn and his Health Care Financing Committee co-chair, Sen. Cindy Friedman -- to finalize a hospital oversight bill (H 4653 / S 2881) largely inspired by the Steward Health Care crisis.
On Thursday, the Senate plans to approve its rewrite of a House-approved bill overhauling the long-term care sector, and that, too, will likely need to be negotiated into a final accord before formal business for the terms ends after July 31.
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