Legislature Enhances Massachusetts
Oversight of Pharmaceutical Industry, Lowering Costs and Saving Lives
Bill includes oversight reforms to improve affordability of
and access to prescription drugs
BOSTON (12/30/2024)—Today the Massachusetts Legislature
passed comprehensive reforms to lower the cost of prescription drugs at the
pharmacy counter and improve oversight of the state’s pharmaceutical industry.
S.3012, An Act relative to pharmaceutical access, costs, and
transparency, requires health insurers to cover life-saving medications for
diabetes, asthma, and certain heart conditions with no or limited out-of-pocket
costs for patients. The measure is particularly critical for residents of
color, who disproportionately face chronic illnesses.
The bill takes bold action to
lower out-of-pocket costs and ensure access to life saving medications by
offering immediate price relief for prescription drugs used to treat diabetes,
asthma, and certain heart conditions. For each condition, the bill requires
insurers to eliminate cost-sharing requirements for one generic drug and to cap
co-payments on one brand-name drug at $25 per 30-day supply.
It further brings down consumer
costs by ensuring that consumers are not charged a cost-sharing amount, such as
a co-pay, if it would be cheaper for them to purchase the drug without using
their insurance.
“If you live with a condition
that requires prescription medication, you deserve the right to access that
drug, without worrying about how expensive it is or whether it will be
available,” said Senate President Karen E. Spilka (D-Ashland).
“Today’s legislation will lower costs at the pharmacy counter and hold
pharmaceutical companies and pharmacy benefit managers accountable—an important
step towards making that right a reality for every resident, and especially
those who are disproportionately impacted by chronic illness. I am extremely
grateful for the unwavering and tireless work of Senator Friedman, as well as
to Senator Cronin, my colleagues in the Senate, and our partners in the House,
for getting this bill to the Governor’s desk.”
“Ensuring that patients with
chronic illnesses are able to afford the lifesaving medications that are
prescribed to them is a prerequisite for establishing health care as a human
right, which is why the price caps included in this legislation are so important.
At the same time, it is also imperative that lawmakers and regulators have
insight into the complex inner workings of the pharmaceutical industry, as that
access will make future, necessary reforms possible, said House Speaker
Ronald J. Mariano (D-Quincy). “I want to thank Chairman Lawn and the
members of the conference committee for their hard work, as well as all my
colleagues in the House and our partners in the Senate for voting to send this
critical legislation to the Governor’s desk for her signature.”
“Nearly six years after I first
introduced this legislation, the Massachusetts Legislature has now taken a
strong step towards reining in prescription drug prices while enhancing
transparency and oversight within the pharmaceutical industry,” said Senator
Cindy F. Friedman (D-Arlington), Senate chair of the Joint Committee on Health
Care Financing and Senate Chair of the Conference Committee. “Massachusetts
often serves as a national leader, providing ground-breaking health care
services and fostering innovative breakthroughs for our biotech and life
sciences sector, but everyday residents of our Commonwealth are being priced
out of essential and life-saving medications. This bill begins to meet the
urgency of this challenge by eliminating cost-sharing for generic drugs and
capping out-of-pocket costs for brand name drugs used to treat diabetes,
asthma, and certain heart conditions. I deeply believe that Massachusetts
deserves a health care system that delivers affordable, high quality and
accessible care to all our residents and this bill brings us one step closer to
that goal. I thank my colleagues in the House for the collaboration and look
forward to continuing our work to providing much needed relief for high-cost
drugs.”
“Under the visionary leadership
of Speaker Mariano, the House has worked to ensure that all Massachusetts
residents have access to high quality affordable health care,” said
Representative John Lawn (D-Watertown), House Chairman of the Joint Committee
on Health Care Financing. “This legislation continues that legacy by
shining a light on pharmacy benefit managers, whose deceptive business
practices increase drug prices, decrease transparency, and harm consumers and
independent pharmacies.”
“This legislation will save
residents with chronic illnesses thousands of dollars and ensure their
medication is affordable,” said Senator John J. Cronin (D-Fitchburg), a
member of the Conference Committee. “I’m excited to see this legislation
reach the finish line and proud of the impact it will have for working families
in our Commonwealth.”
“This critical piece of
legislation will positively impact every resident in Massachusetts by making
life-saving and essential prescription drugs more affordable for individuals
and families,” said Representative Frank A. Moran (D-Lawrence), Second
Assistant Majority Leader and a member of the conference committee. “This once
in a generation bill will lower healthcare costs in our state, while also
ensuring that additional oversight is in place to protect patients through
market transparency and more. I would like to thank my colleagues on this
conference committee for their thoughtful approach to crafting this bill and
looking forward to seeing its transformative effects in the future.”
Approximately nine per cent of Massachusetts residents have diagnosed diabetes and 6.2 per cent of adults over 35 live with heart disease. In 2015,
more than 10 per cent of residents lived with asthma. Black residents
face each at a higher rate—over 12 per cent live with diabetes and nearly 14 per cent of Black adults live with asthma.
The bill drastically increases
state oversight of pharmacy benefit managers (PBMs), which currently negotiate
prescription drug prices with little oversight, making it unclear if they
consistently act in the best interest of consumers. To do so, the legislation
authorizes the Division of Insurance (DOI) to license and regulate PBMs.
PBMs are also prohibited from making payments to pharmacy benefit consultants
or brokers who work on behalf of health plan sponsors during a contracting or
bidding process.
To create a more complete
data-driven picture of drug costs in Massachusetts, the Center for Health Information and Analysis (CHIA) will collect a range of drug
cost information from pharmaceutical manufacturers and PBMs. With the data,
CHIA can offer a more complete examination of the drivers of health care costs
in its annual health care cost report, allowing policymakers and consumers to
better understand the role of pharmaceutical manufacturers and PBMs in the
health care system.
In addition to CHIA’s cost
analysis, pharmaceutical manufacturers and PBMs will be included in the Health
Policy Commission (HPC)’s Annual Health Care Cost Trends Hearing for the first time. Participation in
the hearings will require manufacturers and PBMs to provide public testimony on
the factors that influence drug costs, allowing those factors to be taken into
account as the commission identifies how to improve care and reduce costs for
residents.
Further, the legislation
establishes the Office for Pharmaceutical Policy and Analysis within HPC, which
will be tasked with analyzing trends related to pharmaceutical access,
affordability, and spending in Massachusetts. The office will publish an annual
report with recommendations for strategies to mitigate pharmaceutical spending
growth, promote affordability and enhance pharmaceutical access.
Both chambers having accepted
and enacted the conference committee report, An Act Relative to
Pharmaceutical Access, Costs, and Transparency now heads to Governor
Healey’s desk for her signature.
