Mass. bill seeks to rein in prices of some drugs
By Robert Weisman, Globe Staff
August 10, 2015 - The Boston Globe
Drug companies are facing a new campaign to contain treatment costs, this
time with proposed rules in Massachusetts that would include a
first-in-the-nation cap on some prices.
An alliance of lawmakers, consumers, and health insurers is pushing for a law
that would force biotechnology and pharmaceutical companies to justify their
prices by disclosing how much they spend on research, production, and marketing.
It also would allow the statefs Health Policy Commission to limit the prices of
especially costly drugs, something not done anywhere in the country.
gDrug prices are by far the fastest-growing part of health care costs,h said
Brian Rosman, research director at Health Care for All, a Boston consumer
advocacy group that helped draft the Massachusetts bill. gThe whole system is a
black box. There is very little ability for consumers who go to a pharmacy and
pay a copay to understand whether itfs a fair price.h
Similar gtransparencyh legislation has been filed in New York, California,
Pennsylvania, Texas, North Carolina, and Oregon, though the specifics of each
bill vary.
One driver of the effort has been Americafs Health Insurance Plans, the
national insurance trade group.
The efforts come amid a growing backlash against price tags of tens of
thousands or hundreds of thousands of dollars a year for some medicines that
treat cancers and rare diseases.
Last month, a group of prominent doctors and scientists objected to a
$259,000 annual price set by Bostonfs Vertex Pharmaceuticals Inc. for a new
cystic fibrosis drug. The same week, in a medical journal, more than 100 leading
oncologists protested a rise in cancer drug prices.
Sanofi SA and Regeneron Pharmaceuticals Inc. last month priced their new
cholesterol-lowering drug at $14,600 a year, twice as much as many health plans
had anticipated.
gWe need to get under the hood and understand what goes into these prices,h
said Lora Pellegrini, president of the Massachusetts Association of Health
Plans, a trade group for health insurers that worked with Health Care for All on
the transparency bill.
Representatives of the pharmaceutical industry, which is opposing the bills,
say the Massachusetts legislation would dampen incentives for companies to
develop lifesaving and life-extending therapies. They say drugs represent just
10 to 12 percent of health care costs and often save money by keeping patients
out of the hospital.
gImplementing price controls would have a very negative impact on innovation
in the marketplace,h said Robert Zirkelbach, senior vice president at
Pharmaceuticals Research and Manufacturers of America, a Washington-based trade
association known as PhRMA. gIt would send a signal that risk-taking would not
be rewarded.h
Robert Coughlin, president of the Massachusetts Biotechnology Council, said
the cost analysis called for in the state Senate bill — which would be required
of all drug makers selling products in Massachusetts — would be gimpossible to
achieveh because of the complex nature of drug research. He said the requirement
would divert resources from the discovery of new therapies and punish an
industry that is key to the statefs economy.
gIt just raises the administrative burden on the innovative companies here in
Massachusetts that are responsible for economic growth today and in the future,h
Coughlin said.
The bill introduced in the Massachusetts Senate, where an October committee
hearing is planned, contains some of the toughest measures proposed in any state
against high drug prices.
It would empower the state Health Policy Commission to develop a list of
critical drugs that are widely prescribed that affect the cost of public health
programs, and that could help lift overall medical spending in Massachusetts
above a state benchmark limiting increases to 3.6 percent.
The bill cites gsubstantial public interesth in what goes into the prices of
such medicines. Drug makers would be required to disclose, among other things,
their development and marketing outlays, how much research was paid for with
public funds, their manufacturing costs, and the prices of their drugs in other
countries. It would also empower the commission, which is charged with holding
down health care costs, to impose cost controls on some high-priced drugs.
gThe public is fed up over these drug prices,h said Senator Mark C. Montigny,
Democrat of New Bedford, the billfs lead sponsor. gYoufve got a situation where
people are hurting so badly over the price of these drugs — the patient
community, the employers, the insurers.h
Some patients are eagerly backing the bill.
Among them is Caitlin OfBrien, 24, who is struggling with Crohnfs disease,
drug-induced lupus, and rheumatoid arthritis — as well as with the prices of her
medicines. In the past month, her out-of-pocket costs — those not covered by
insurance — topped $900 for more than a dozen prescription drugs. She is out of
work on disability and living in Newton with her parents, who provide financial
help.
gMy short-term disability check is $432 a week,h OfBrien said. gIt doesnft
even cover my meds.h
But not all patients support the legislation.
Andover retiree Jack Whalen, 66, takes a three-drug combination at an
infusion center in Dana-Farber Cancer Institute to treat his rare blood cancer.
Because his medicines are taken through infusion rather than in pill form, his
Medicare insurance covers them without him having to pay out of pocket. Whalen
said the problem is not the cost of drugs but insurers shifting more of the cost
to patients in many cases.
gLegislation like this would unwittingly shoot ourselves in the foot,h he
said. gIt sets up an adversary relationship between the biopharma industry and
the lawmakers here in Massachusetts.h
The cost-transparency bill, which has 17 cosponsors in the Legislature, would
expand the power of the Health Policy Commission. The agency, created in 2012,
is known for scrutinizing proposed hospital mergers that could drive up costs.
Its reports helped scuttle the proposed acquisition of South Shore Hospital by
the Partners HealthCare system last year.
With many insurers calling for a shift to so-called pay-for- performance
reimbursing — or tying a drugfs price to how well it works for patients — the
type of cost analysis called for in transparency bills will probably become a
greater focus of debate in the medical world.
gWe want to be able to dig into the real costs of the drugs that are coming
to market,h said Pellegrini, of the state health insurers trade group. gWhile we
understand many of these drugs are great medical advances, wefre also concerned
about whether these costs are sustainable for the long term.h