(BOSTON 1/7/2024) — Last week, the Massachusetts Legislature passed comprehensive reforms to lower the cost of prescription drugs at the pharmacy counter and improve oversight of the state’s pharmaceutical industry.

S.3012 – An Act relative to pharmaceutical access, costs, and transparency, requires health insurers to cover life-saving medications for diabetes, asthma, and certain heart conditions with no or limited out-of-pocket costs for patients. The measure is particularly critical for residents of color, who disproportionately face chronic illnesses.

The bill takes bold action to lower out-of-pocket costs and ensure access to lifesaving medications by offering immediate price relief for prescription drugs used to treat diabetes, asthma, and certain heart conditions. For each condition, the bill requires insurers to eliminate cost-sharing requirements for one generic drug and to cap co-payments on one brand-name drug at $25 per 30-day supply.

It further brings down consumer costs by ensuring that consumers are not charged a cost-sharing amount, such as a co-pay, if it would be cheaper for them to purchase the drug without using their insurance.

“The cost of healthcare should not be a factor in whether an individual gets the medication and care they need to stay healthy,” said Senator Michael Moore (D-Millbury). “This bill takes big steps toward making prescription drugs more affordable, improving access to care, and better regulating the industries that sell and distribute lifesaving medications. I’m thrilled that the Legislature is once again showing Bay Staters and the country that we can do something about eye-popping prescription drug costs. I look forward to continuing our work to lower barriers to healthcare for everyone who needs it.”

Approximately 9% of Massachusetts residents have diagnosed diabetes and 6.2% of adults over 35 live with heart disease. In 2015, more than 10% of residents lived with asthma. Black residents face each at a higher rate – over 12% live with diabetes and nearly 14% of Black adults live with asthma.

The bill drastically increases state oversight of pharmacy benefit managers (PBMs), which currently negotiate prescription drug prices with little oversight, making it unclear if they consistently act in the best interest of consumers. To do so, the legislation authorizes the Division of Insurance (DOI) to license and regulate PBMs. PBMs are also prohibited from making payments to pharmacy benefit consultants or brokers who work on behalf of health plan sponsors during a contracting or bidding process.

To create a more complete data-driven picture of drug costs in Massachusetts, the Center for Health Information and Analysis (CHIA) will collect a range of drug cost information from pharmaceutical manufacturers and PBMs. With the data, CHIA can offer a more complete examination of the drivers of health care costs in its annual health care cost report, allowing policymakers and consumers to better understand the role of pharmaceutical manufacturers and PBMs in the health care system.

In addition to CHIA’s cost analysis, pharmaceutical manufacturers and PBMs will be included in the Health Policy Commission (HPC)’s Annual Health Care Cost Trends Hearing for the first time. Participation in the hearings will require manufacturers and PBMs to provide public testimony on the factors that influence drug costs, allowing those factors to be taken into account as the commission identifies how to improve care and reduce costs for residents.

Further, the legislation establishes the Office for Pharmaceutical Policy and Analysis within HPC, which will be tasked with analyzing trends related to pharmaceutical access, affordability, and spending in Massachusetts. The office will publish an annual report with recommendations for strategies to mitigate pharmaceutical spending growth, promote affordability and enhance pharmaceutical access.

Both chambers having accepted and enacted the conference committee report, An Act Relative to Pharmaceutical Access, Costs, and Transparency now heads to Governor Healey’s desk for her signature.

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