BIOTECH INDUSTRY ENCOURAGED BY REWRITE OF MEDICAID DRUG PRICING PLAN
By Chris Lisinski
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, APRIL 24, 2019.....In the first instance of dissenting votes cast during the House's budget debate, representatives adopted a industry-backed amendment Wednesday that relaxes portions of a Gov. Charlie Baker plan to allow his administration to negotiate drug prices with pharmaceutical manufacturers.
MassHealth and the state Health Policy Commission would still be allowed to engage in conversation with drug makers about the prices they charge and require justification for high-cost medications.
But under the amendment, the administration would not be able to publish what it believes the fair drug price to be, nor is the HPC explicitly authorized to hold public investigatory hearings or refer cases in which manufacturers do not comply with requests for information to the attorney general's office for potential legal action — all components that were in both Baker's and the House Ways and Means Committee's version of the budget.
Echoing an argument pharmaceutical companies raised earlier this week, House Majority Leader Ronald Mariano said the HPC becoming a "rate-setting body" would prevent innovation and economic growth in the biotech industry.
"All you have to do is take a ride through Kendall Square and look at the changes that have happened in the past 10 years," Mariano said on the floor. "We want to make sure we don't cripple this and allow research to continue without fear of collapsing or triple damage lawsuits."
Rep. Jennifer Benson, who co-chairs the Joint Committee on Health Care Financing, also spoke in favor of the amendment during Wednesday's session. She said it still allowed for some public hearings on drug prices — although those would be at the discretion of the Health and Human Services secretary, not as part of the HPC process — and would help teach state officials what happens in the "black box" of drug pricing.
The amendment, filed by Rep. Edward Coppinger, was overwhelmingly approved, 152-3. Reps. Mike Connolly of Cambridge, Tami Gouveia of Acton and Liz Malia of Boston voted against it, and Reps. Jonathan Hecht of Watertown, Jack Lewis of Framingham and Maria Robinson of Framingham voted present.
Every other amendment to the budget voted on since Monday had drawn unanimous support up until that point.
Both Gouveia and Connolly told the News Service they liked what Baker had offered. But the updated House version, they said, went too far in limiting what state officials could do to help keep costs in check.
"I do think the amendment will be a positive step forward, but I also believe the governor's proposal had more teeth and could have offered us the potential to better control drug prices," Connolly said. "Clearly, it's been in the news that there's been a lobbying effort ongoing this week from some of these pharmaceutical companies. I really value their role, but I feel like this was a discussion that was too important to dispose of today in this fashion."
Gouveia, similar to Connolly, warned that the amendment "has the potential to weaken what the governor put out." She also raised concerns about addressing drug pricing, a topic with broad implications, as part of an annual budget discussion rather than as standalone legislation.
Baker's original proposal, the strictest version unveiled so far, allowed the HPC to refer cases to the attorney general if companies refused to comply with requests for information or to participate in a public hearing. His administration said that effort was necessary to address an explosion in MassHealth drug spending, which doubled in the past five years.
A spokeswoman for the Executive Office of Health and Human Service responded to a question about the administration's thoughts on the revised House plan by recapping what Baker had proposed on drug pricing, as well as his proposal to tax opioid manufacturers to defray the cost of addiction treatment.
"We look forward to working with our colleagues in the Legislature throughout the budget process to save Massachusetts $80 million in associated drug costs," the spokeswoman said.
The House's initial plan put forward by Ways and Means cut out that first form of recourse, but included the second, leaving explicit the ability of state officials to seek legal recourse in some cases where drug companies were seen to be impeding an investigation into pricing.
Interest groups opposed the new restrictions, warning that biotechnology and pharmaceutical companies play a crucial role in the state's economy by employing nearly 70,000 individuals and generating billions in tax revenue.
Coppinger's amendment, which was supported this week in a lobbying push by the Massachusetts Biotechology Council, cut out all references to the attorney general and consumer-protection cases, and it also eliminated the ability of the HPC to make public what it believes drug prices should be. Manufacturers had worried that would effectively reset whatever rates the market had already set not just in Massachusetts, but around the country.
Following Wednesday's vote, MassBio President Robert Coughlin thanked lawmakers for limiting "negative consequences" in the original price-negotiating proposal.
"The biotech industry came to the table in good faith and proposed a significant compromise – one we believed kept the original proposal's intent of restraining costs in MassHealth," Coughlin said in a statement. "Although the House's amendment fixes many of the major issues, the underlying language proposed by the Governor is still seriously problematic. As the Senate considers their budget, we urge them to take a similarly thoughtful approach to radically reforming MassHealth, which could have long-lasting consequences for patients and our world-leading life sciences cluster."
Insurers and some small business groups had warned last week that the Coppinger amendment "seriously weakens" the cost control proposal and removed incentives for drug manufacturers to negotiate over price, but even with the changes, some consumer advocates said the House's version of the pricing program is still an important step toward supporting patients.
"The language in the final FY20 House budget makes progress in bringing more transparency to prescription drug costs for the MassHealth program," said Amy Rosenthal, director of Health Care for All. "While the transparency language in the House budget importantly includes additional reporting, as well as options for public input and hearings to inform additional rebates, there is more work to be done to make prescription drugs more affordable for consumers, employers and the state."
It remains unclear whether the Senate will embrace the amended House language or instead pursue stricter regulations similar to Baker's proposal when it takes up its own budget debate next month.
Sen. Cindy Friedman, chair of the Joint Committee on Health Care Financing, did not say Wednesday whether she agreed with her House co-chair Rep. Jennifer Benson on the amendment.
"We will be evaluating the House budget's outside sections on MassHealth drug pricing," Friedman said. "In terms of the Senate budget, the Senate takes the issue of high drug costs to the state and to the consumer very seriously, and we will be looking at what we can do to ensure that the Commonwealth and patients have access to the medications they need at a price they can afford."
Rep. William Straus still had one amendment to the budget pending early Wednesday evening that would reinsert the attorney general into the process, but that proposal appeared to run counter to the direction House lawmakers had already decided to move.
[Matt Murphy contributed reporting]
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