As drug-pricing proposals proliferate at the federal level, states are taking their own steps to rein in sticker prices. That fight hasn't been easy, what with the pharma industry's lobbying power. But it's not impossible, either.
Consider the basket of bills under consideration in Massachusetts. The state legislature's Joint Committee on Health Care Financing heard testimony on the skyrocketing cost of drugs as it reviewed 21 bills targeting drug pricing and transparency.
One of those bills—HB 1133/SB 706—would require drug manufacturers to report pricing information, including development, research and marketing costs. They'd also have to disclose the factors they consider when raising prices. And perhaps most worrisome for drugmakers, the bill would allow the state’s Health Policy Commission to cap the price of certain drugs based on information the companies report.
Massachusetts Sen. Justin Lewis, one of the legislation’s authors, told committee members that the cost of prescription spending in MassHealth has doubled in the last five years, with pharma and pharmacy benefit managers taking most of the blame, MassLive reported.
“To date, we've seen that hospitals, insurers, businesses, providers and consumers have all made meaningful contributions and sacrifices to ensure health care coverage for all residents and to help contain health care costs, while up until now the pharmaceutical industry and PBMs have not been held accountable to be part of the solution," Lewis said.
How those bills fare remains to be seen. PhRMA, MassBio and BIO are all fighting to sway lawmakers against measures they see as damaging to biopharma. But as the Massachusetts Legislature works overtime to weigh the benefits of drug-pricing legislation, the Maryland General Assembly scored a landmark win this week. Over industry objections, lawmakers backed a state drug affordability board that would take effect in 2022, barring Gov. Larry Hogan’s veto.
The bill, which cleared conference committee Monday, would allow the newly formed commission to cap prices on certain drugs it determines are unreasonably costly for consumers.
Vinny DeMarco, an advocate with Maryland Citizen’s Health Initiative, told Stat the assembly’s approval despite significant pressure from pharma lobbyists represented a “national model” for passing state drug-pricing legislation.
Pharma trade associations including PhRMA have invested heavily in lobbying statehouses to steer clear of drug-pricing bills. In 2018, PhRMA spent $292,836 to lobby the Massachusetts statehouse alone, the Boston Herald said. All told, Big Pharma spent $4 million lobbying Massachusetts lawmakers in 2018.
Despite the win, the path to enacting Maryland’s affordability board could be a steep one after a court challenge derailed a first-of-its-kind bill targeting pharma “price-gouging” in 2017.
In April 2018, a U.S. Court of Appeals found Maryland’s HB 631 unconstitutional after a challenge from the Association of Affordable Medicines, an advocate for generic manufacturers.
Massachusetts could face a similar uphill climb after past attempts at controlling drug prices were met with stiff opposition from the industry.
In 2017, Massachusetts pushed for the power to use formulary negotiations to manage its drug costs, but was rebuffed by Tim Hill, then-acting director of the Center for Medicaid and CHIP Services.
State legislators also pushed for a pricing transparency bill in early 2016 that Jonathan Fleming, general partner of biotech investment firm Oxford Bioscience Partners, called “a nightmare” in a committee hearing. The bill fizzled out in early 2017.