4/11/2019
HB1133 / SB706, HB1178, HB1162
Pharmaceutical Access, Cost & Transparency
Joint Committee on Health Care Financing

The Massachusetts Health & Hospital Association (MHA), on behalf of its member hospitals, health systems, physician organizations, and allied healthcare providers, appreciates this opportunity to offer its support for efforts that seek to address pharmaceutical access, cost, and transparency.

Pharmaceutical spending growth has significantly outpaced overall healthcare spending growth in Massachusetts. According to the HPC’s 2018 Cost Trends Report, prescription drug spending remains one of the primary contributors to the growth in healthcare costs.

According to an October 2016 report presented to the American Hospital Association, pharmaceutical spending in the hospital inpatient setting is increasing rapidly. Between FY2013 and FY2015, growth in annual costs for inpatient drugs increased on average 23.4%, and 38.6% on a per-admission basis. Additionally, large and unpredictable increases in the price of drugs used in the inpatient setting significantly affected hospitals’ ability to manage costs within a fixed-price-based payment system.

These types of increases in drug spending are unsustainable for hospitals as well as for patients, and place a strain on state health programs that cover these pharmaceuticals.

Following the implementation of the state’s healthcare cost control and delivery reform law (Chapter 224), hospitals, physicians, and health plans are held accountable for healthcare costs, must meet healthcare cost growth benchmarks, and are required to report cost and utilization data to various state agencies. This data, in turn, is readily available to the public. Hospital financial information, in particular, is an open book. By contrast, there is currently little to no transparency around pharmaceutical costs.

MHA is supportive of provisions in these bills and other proposals before the legislature that seek to:

         1. Establish a measure of accountability for the pharmaceutical industry and create greater transparency around the factors that contribute to price increases;
         2. Restrain abuses of pharmacy benefit managers;
         3. Require pharmacists to inform consumers if purchasing a drug at the retail price would be cheaper than using insurance;
         4. Provide tools to strengthen MassHealth’s ability to negotiate lower drug prices; and
         5. Establish a permanent authorization and funding source for academic detailing to ensure doctors get accurate information to counter biased drug manufacturer marketing.

Thank you for the opportunity to offer comments on this most important matter. If you have any questions or concerns or require further information, please contact Michael Sroczynski, MHA’s Senior Vice-President of Government Advocacy, at (781) 262-6055 or msroczynski@mhalink.org