This week the state senate is expected to begin deliberations on pharmaceutical cost control legislation. An Act Relative to Pharmaceutical Access, Cost and Transparency (PACT Act) would, among other things, expand state regulatory authority over drug prices, set limits on insulin costs, and include pharmaceutical manufacturing companies and pharmacy benefit managers in the Health Policy Commission’s (HPC’s) annual Health Care Cost Trends hearing process.
Specifically, the bill directs the HPC to establish a process for identifying drug price changes “that pose a public health threat” to residents and the state, and allows the HPC to “recommend pricing measures.” The bill also limits out-of-pocket insulin spending for residents by eliminating deductibles and coinsurance and capping co-pays at $25 per month. It also requires the Center for Health Information and Analysis (CHIA) to collect more data on drug prices than it currently does “to provide policymakers and consumers with an objective data source to understand drug cost drivers.”
By including pharmaceutical interests in the HPC’s cost trends hearings, those interests will be required to testify under oath and supply documentation about drug costs. The bill also requires HPC to create an “academic detailing program” to educate prescribers and other medical professionals on best practices to improve patient outcomes and reduce costs through better prescribing practices.
The expansion of the HPC’s regulatory authority and workload comes at a time when hospitals and insurers must fund the entirety of the HPC’s growing budget through annual assessments. The legislation that created the HPC allows, but doesn’t require, the state to pay up to a third of the HPC’s operating budget – but Massachusetts does not contribute to the funding. Hospitals that are self-insured not only pay their share of the hospital assessment but also are subject to the insurer surcharge as well. Under the Senate’s pharmaceutical cost bill, pharmaceutical and biopharmaceutical manufacturing companies, and pharmacy benefit managers will be required to pay an amount of the estimated expenses for the related new work of the HPC and CHIA, but are not included in the annual assessment to fund the agencies’ core work.