Drug industry lashes out at Massachusetts drug price transparency effort


The Boston and Cambridge area may be one of the top biotech research hubs in the world. But that hasn't buffered it from the anger of some state lawmakers over the costs of some drugs they say are eating up the state's healthcare budget. Tired of just hearing from drugmakers that high prices are justified by their huge development costs, some lawmakers want them to prove it.

A bill pending in the Massachusetts state legislature would enable the state's health cost watchdog to demand and review data on the highest-cost drugs, the Boston Globe reports. If the agency decides the costs would put the state's 3.6% watermark for healthcare increases in jeopardy, it could force drugmakers to rebate to the state some of its payments.

The bill's sponsor withdrew a provision that would have set price caps on some drugs but that was not enough to keep some biotech execs from expressing their own exasperation over the proposed law that they see as flawed and oppressive. In a hearing, some drug industry officials pointed out that by focusing on development costs for specific drugs, the state is ignoring the outlay investors and companies must make for drugs that fail to make it to the market, the newspaper said. Others pointed out the law would just add to drug developers' costs

"This bill is a nightmare," Jonathan Fleming said in the hearing. Fleming is a general partner of biotech investment firm Oxford Bioscience Partners and on the board of Cambridge-based Q-State Biosciences. "It raises our costs and increases the difficulty of getting capital to cover it."

But legislators say the state is facing difficulty finding the money to pay for rapidly rising drug prices. According to the Boston Globe, the costs of providing drugs is the fastest-growing piece of the state's of health care budget, up 13% in 2014. Massachusetts joins other states--including some with significant biopharma industries like New York, California and North Carolina--that think drug pricing is opaque.

While rising drug costs in general have been a growing concern of U.S. healthcare consumers, it was what many critics termed the exorbitant prices that Gilead Sciences put on its hepatitis C meds Sovaldi and Harvoni that gave many critics something to rally around. The drugs promised a cure for most patients, but the $1,000-a-pill retail price for the drugs, which was lowered by discounts, left state and federal agencies, as well as some private payers, struggling to pay for the meds. Many limited them to just the sickest patients even though studies showed this was not the best protocol for treating the disease.

The consumer backlash over drug prices has also made it prime for a presidential election issue. Leading Republican candidate Donald Trump has joined Democratic presidential candidates Hillary Clinton and Bernie Sanders in suggesting that Medicare be given the power to negotiate drug prices to alleviate the strain on the national budget. That puts him on the side of President Barack Obama, who included that provision as a part of his 2015 budget proposal.

- read the Boston Globe story