Massachusetts bill would create first-in-nation cap on drug prices

Insurers' efforts to limit rising drug costs are coming to a head in Massachusetts, where state lawmakers have proposed a bill that would create a first-in-the-nation cap on some prices, reported The Boston Globe.

Containing some of the strictest measures designed to stop rising drug prices, the Massachusetts bill would force pharmaceutical companies to justify their prices by disclosing how much they spend on research, production and marketing as well as their drug prices in other countries. And it would allow a state commission to limit the prices of particularly expensive drugs.

America's Health Insurance Plans (AHIP) worked with the Massachusetts insurance lobby group to help drive the legislation as part of its battle with drug makers over pricey specialty medications like hepatitis C drug Sovaldi, as FierceHealthPayer previously reported. AHIP has called out the drug industry for the soaring costs of new specialty medications, saying expensive pricing takes unfair advantage of health insurers.

"We want to be able to dig into the real costs of the drugs that are coming to market," Lora Pellegrini, president of the Massachusetts Association of Health Plans, told the Globe. "While we understand many of these drugs are great medical advances, we're also concerned about whether these costs are sustainable for the long term."

But drug companies disagree that price transparency bills are the solution to curbing rising costs. "Implementing price controls would have a very negative impact on innovation in the marketplace," Robert Zirkelbach, senior vice president at Pharmaceuticals Research and Manufacturers of America, told the Globe. "It would send a signal that risk-taking would not be rewarded."

Meanwhile, insurers have been adopting more cost-sharing measures, especially coinsurance, to shift the costs of expensive medications onto consumers. And Blue Cross Blue Shield of Rhode Island integrated pharmacists into its care teams to boost medication adherence and lower costs.

Yet Medicare just announced that it will soon start paying for a new and pricey cancer medication, Blincyto, which costs about $178,000 for a standard course of treatment.

To learn more:
- read The Boston Globe article

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