Price control techniques enter health care debate

BOSTON — State Rep. Jon Santiago, a Boston emergency room doctor, recalled an elderly patient named Mike who recently came to the hospital with life-threatening complications from diabetes. Conversations with the man’s family revealed he had not been keeping up with his insulin — it was too expensive.

Mike pulled through, Santiago said. But the freshman Democrat told his colleagues on the Legislature’s Health Care Financing Committee that the anecdote illustrates the urgency to pass legislation reining in costs of the most expensive prescription medications.

“It will save money and, more importantly, save lives,” said Santiago, at a standing-room-only hearing this week on drug pricing.

Lawmakers and top state officials are indeed zeroing in on prescription drug pricing as part of their latest attempt to moderate health care expenses that are vexing consumers, employers, insurers, providers and state government itself.

But representatives of the state’s flourishing biopharmaceutical sector are pushing back hard on proposals to facilitate price controls on the most expensive medications. Such policies, they say, will stifle innovation and threaten jobs.

“Patients need bold reforms, not more of the same failed policies like price controls that do nothing to address the challenges patients face affording their medicines, all the while putting patient access and the industry’s ability to find new and better treatments at risk,” said Tiffany Haverly, a spokeswoman for the industry group PhRMA, in a written statement.

Biopharmaceutical companies support more than 300,000 jobs and contribute nearly $80 billion to the state’s economy, according to the organization.

Supporters of the legislation say they recognize the industry’s importance to the state but question claims that price curbs would thwart development of breakthrough drugs or make it harder for patients to access life-saving treatments.

“This is fundamentally a consumer protection (bill),” said Justin Lowe, legal director of Health Law Advocates, a Boston-based organization that assists low-income people secure needed medical services.

The state’s Health Policy Commission found that total prescription drug spending rose 4.1 petrcent in Massachusetts in 2017, a slightly lower increase than in the previous year but still more than double the overall growth in health care expenditures.

The U.S. has the highest drug prices in the world, according to the Organization for Economic Cooperation and Development, having spent $1,162 per person on prescription drugs in 2015.

The bill offers several strategies to force drug-makers to better explain how they set prices and provide more options for those paying the freight. Provisions include regulating pharmacy benefit managers who administer prescription drug plans for private insurers; requiring pharmacists to tell patients if they can save money by buying a drug at retail price rather than through their insurance plans; and better educating doctors on prescribing cheaper, generic versions of name-brand drugs.

Yet the section of the bill likely to be lobbied against most aggressively by the pharmaceutical industry would allow the Health Policy Commission to set ceilings, officially known as “upper payment limits,” if a state review finds the cost of a prescription drug to be “unreasonable or excessive.”