Drug Prices in the Spotlight

The 2018 Cost Trends Report from the Health Policy Commission (HPC) released last month showed, as the report has in previous years, the persistent growth in prescription drug spending over the state’s healthcare cost growth benchmark.

In that report, the HPC noted that more than 50 bills have been filed in the Massachusetts legislature to get drug prices under control.  One such bill from the Baker Administration would enhance the ability of MassHealth to negotiate directly with drug manufacturers for additional supplemental rebates regardless of state procurement rules.  (There is currently a national Medicaid drug rebate agreement on the federal level; states can negotiate supplemental rebate agreements to further reduce expenditures.)

Last week, the Mass. Association of Health Plans held a policy forum where a representative from the National Academy for State Health Policy noted that 158 drug cost bills have been filed in state legislatures so far in 2019. State legislatures passed 45 such Rx-price laws last year.

Confronting the issue isn’t just limited to state actions.  After regaining the majority in the U.S. House, Democrats stated that bringing down drug prices is a priority. But the issue is bipartisan in nature.  For example, U.S. Health & Human Services Secretary Alex Azar wants to index Medicare Part B drug prices to lower prices paid by other advanced countries.  And Senate Finance Committee Chuck Grassley (R-Iowa) has indicated he’s open to studying a proposal to allow people to import their prescription drugs from Canada.

The American Hospital Association released a report in January showing that average total drug spending per hospital admission increased by 18.5% between FY2015 and FY2017, and that very large percentage increases (over 80%) of unit price were seen across different classes of drugs, including those for anesthetics, parenteral solutions, and chemotherapy.