Bill builds on Senate’s work to reduce prescription drug costs, promote transparency, and increase patient access
BOSTON (02/10/2022) – Today, the Massachusetts Senate passed by a vote of 39-1 An Act relative to Pharmaceutical Access, Costs and Transparency (PACT Act 2022), comprehensive pharmaceutical legislation to address the rapidly increasing cost of prescription drugs and to ensure life-saving medications are affordable, fairly priced and accessible for all consumers. Senator Cindy F. Friedman (D-Arlington) took a lead role in crafting the legislation for the Massachusetts Senate.
“This legislation moves the Commonwealth one step closer to a system that delivers affordable, high quality, and accessible care for our residents,” said Senator Friedman, Senate chair of the Joint Committee on Health Care Financing. “The PACT Act 2022 ensures that more consumers can access prescription drugs at a fair price, by capping out-of-pocket insulin costs, providing relief for certain high-cost drugs, improving patient access to medications and pharmacies of their choice, and enhancing transparency and oversight within the pharmaceutical industry. I thank President Spilka, Chair Rodrigues, my colleagues, and the many stakeholders who helped craft this bill, and I am hopeful that this legislation will be signed into law soon.”
Too often, patients cannot access the medications they need due to high prescription drug prices. The PACT Act 2022 contains enhanced accountability tools to address this and other barriers to care. Currently, Massachusetts cannot effectively identify the drugs that have burdensome costs which prevent patients from being able to afford them. These cost barriers also contribute to unaddressed health issues and often worsen conditions. This legislation directs the Health Policy Commission (HPC), in consultation with stakeholders, to establish a process for identifying drug price thresholds that pose a public health risk. In addition, it allows the HPC to recommend pricing measures to increase patient access to necessary medications. Drug manufacturers that fail to comply with this process will be required to pay a fee that will go into a trust fund for a new drug cost assistance program to support patients with certain chronic health conditions that disproportionately impact marginalized communities.
In a first for Massachusetts, the legislation offers immediate price relief for insulin—a life-sustaining, daily drug for the one in 10 Massachusetts residents living with diabetes, without which they face substantial health risks and complications. Insulin prices have recently risen sharply, resulting in out-of-pocket costs that can reach $1,000 or more per year for patients in high-deductible plans or who are underinsured. This financial burden often forces patients to engage in the dangerous practice of severely limiting or forgoing the use of insulin.
To address this problem, the PACT Act 2022 limits out-of-pocket spending on insulin by eliminating deductibles and coinsurance, and permanently capping co-pays at $25 per 30-day supply. If the PACT Act 2022 is signed into law, Massachusetts would join 21 other states that cap co-pays for insulin. An amendment adopted by the Senate also directs the Center for Health Information and Analysis (CHIA), an independent state agency that provides objective analysis of the Massachusetts health care system, to study the feasibility of requiring access to epinephrine injectors for children free from out-of-pocket costs.
The bill brings oversight to pharmacy benefit managers (PBMs), who play a major role in how drugs are tiered and priced on insurance plans. PBMs serve as brokers or ‘middle-men’ in the drug transaction process and are not currently subjected to rigorous oversight by the state, making it unclear if PBMs act in the best interest of consumers or health plans when they negotiate the price of drugs with pharmaceutical manufacturers. The PACT Act 2022 authorizes the Division of Insurance (DOI) to provide much-needed oversight by licensing and regulating PBMs—and establishing sanctions for PBMs that fail to meet certain standards.
To ensure that patients pay the lowest possible cost at the pharmacy counter, the PACT Act 2022 builds on federal legislation to ensure that a patient purchasing a prescription drug is not charged a cost-sharing amount, such as a co-pay or deductible, that exceeds the drug’s retail price.
The bill also takes significant steps toward ensuring that patients can get their prescription drugs from the pharmacy of their choice. This bill will allow any pharmacy the opportunity to become licensed to dispense of specialty medications and contract with insurance plans to provide specialty medications to patients. In addition, this bill provides patients with greater access to mail order prescriptions by allowing any network pharmacy to contract with carriers to provide mail-order prescriptions, changing the current practice in which carriers determine what pharmacies are available to patients for mail order prescriptions.
“Our HelpLine takes calls from people across the state who can’t afford their medications. Individuals and families in Massachusetts have been struggling for far too long to access and afford the prescriptions they need, and this legislation provides critical financial relief at a pivotal time,” said Amy Rosenthal, Executive Director at Health Care For All. “By passing this bill today, Senators took an important step to rein in excessive drug costs, bringing oversight of pharmaceutical companies and pharmacy benefit managers in line with other health care industries in the state.”
“As the representative of the largest number of independently owned pharmacies in Massachusetts, we are pleased at the action of the senate today to pass comprehensive legislation to address rising prescription drug costs and patient access to their local pharmacy,” said Todd Brown, Executive Director of the Massachusetts Independent Pharmacist Association. “This legislation is a major step forward in protecting patients from the rising cost of prescription drugs and barriers to care resulting from what has long been a black box of secrets by the Pharmacy Benefits Management (PBM) industry. We are encouraged to see that many of our concerns regarding the unfair practices of PBMs have been incorporated in this bill and support the focus on transparency and accountability which are positive developments for patients and independent pharmacies in Massachusetts.”
To help control costs further, the PACT Act 2022 requires pharmaceutical manufacturers to notify the state in advance of new drugs coming to market, and of significant price increases for existing drugs. With advanced notification, the state’s MassHealth program can better prepare for potential cost increases by exploring ways to mitigate the cost or negotiating improved prices. In addition, advance notification will enable the HPC to focus on these cost drivers at their Cost Trends Hearings, which are held each year to examine the drivers of health care costs, identify challenges and opportunities for improving care and reducing costs in Massachusetts, increase transparency and accountability for health care providers and insurers, and help the state to meet its annual health care cost growth benchmark
In addition, pharmaceutical manufacturers and PBMs will be included in the HPC’s annual Cost Trends Hearings for the first time. By participating in the hearings process, manufacturers and PBMs will be required to provide public testimony on the factors that influence drug costs and provide documentation to back up their claims. The HPC will use this information to analyze how pharmaceutical industry costs impact the state’s health care market—and the ultimate cost of health care for Commonwealth residents.
This bill also empowers CHIA to collect a range of drug cost information from pharmaceutical manufacturers and PBMs to include in its annual health care cost report, which does not currently include comprehensive data on drug costs. Collecting this data will allow policymakers and consumers to better understand the role of pharmaceutical manufacturers in driving costs moving forward.
An amendment adopted on the floor would direct the Department of Public Health, in consultation with the Attorney General, to analyze the Commonwealth’s code of conduct rules for pharmaceutical and medical device manufacturers to ensure that they do not improperly influence prescribing patterns of opioids and other drugs.
The Senate has been a leader in putting forth policies that address unaffordable drug costs. The HEALTH Act, passed by the Senate in 2017, proposed policies to incorporate pharmaceutical costs into the state’s annual health care cost oversight process and ensure that consumers are offered the lowest available prices at the pharmacy. The Senate also championed the inclusion of provisions in the Fiscal Year 2020 budget to allow MassHealth to directly negotiate supplemental drug rebates to save the state millions of dollars each year. The Senate passed the first iteration of the PACT Act in the 2019-2020 session. The PACT Act 2022 takes several more important steps forward to rein in drug costs and improve patient access throughout the health care system.
The PACT Act 2022 now moves to the Massachusetts House of Representatives for consideration.