S2695 – An Act relative to pharmaceutical access, costs and transparency
Filed by Senator Friedman, originally as S771.
The Senate has passed the PACT Act.
Please ask House Members to endorse and pass the PACT Act.
The bill seeks to bring oversight to pharmacy benefit managers (PBMs), who play a major role in how drugs are tiered and priced on insurance plans. PBMs, who serve as brokers or ‘middle-men’ in the drug transaction process, are not currently subjected to rigorous oversight by the state, making it unclear if PBMs act in the best interest of consumers or health plans when they negotiate the price of drugs with pharmaceutical manufacturers. The PACT Act 2022 authorizes the Division of Insurance (DOI) to provide much-needed oversight by licensing and regulating PBMs—and establishing sanctions for PBMs that fail to meet certain standards.
To make sure patients pay the lowest possible cost at the pharmacy counter, the PACT Act 2022 builds on federal action legislation to ensure that a patient purchasing a prescription drug is not charged a cost-sharing amount, such as a co-pay or deductible, which exceeds the drug’s retail price.
The bill also takes significant steps toward ensuring that patients can get their prescription drugs from the pharmacy that they choose. This bill will allow independent pharmacists the opportunity to become licensed to dispense of specialty drugs and contract with insurance plans to provide specialty medications to patients. In addition, this bill provides patients with greater access to mail order prescriptions by allowing any network pharmacy to contract with carriers to provide mail-order prescriptions, changing the current practice where of carriers determine what pharmacies are available to patients for mail order prescriptions.
To help control costs further, the PACT Act 2022 requires pharmaceutical companies to notify the state in advance of new drugs coming to market, and of significant price increases for existing drugs. With advanced notification, the state’s MassHealth program can better prepare for potential cost increases by exploring ways to mitigate the cost or negotiating improved prices. In addition, advance notification will enable the HPC to focus on these cost drivers at their Cost Trends Hearings, which are held each year to examine the drivers of health care costs, identify challenges and opportunities for improving care and reducing costs in Massachusetts, increase transparency and accountability for health care providers and insurers, and help the state to meet its annual health care cost growth benchmark.
In addition, pharmaceutical manufacturing companies and PBMs will be included in the HPC annual Cost Trends Hearings for the first time. By participating in the hearings process, manufacturers and PBMs will be required to provide public testimony on the factors that influence drug costs and provide documentation to back up their claims. The HPC will use this information to analyze how pharmaceutical industry costs impact the state’s health care market—and the ultimate cost of health care for Commonwealth residents.
This bill also empowers the Center for Health Information and Analysis (CHIA), an independent state agency that provides objective analysis of the quality, affordability, utilization, and access to the Massachusetts health care system, to collect a range of drug cost information from pharmaceutical manufacturers and PBMs to include in its annual health care cost report, which does not currently include comprehensive data on drug costs. Collecting this data will allow policymakers and consumers to better understand the role of pharmaceutical companies in driving costs moving forward.
- Doris Bardwell, RN
- Boston Center for Independent Living
- Center for Living and Work, Inc.
- Charles Carr, Disability Policy Consortium
- John J. Ford, Northeast Justice Center
- Lachan Forrow, MD
- Judi Fonsh, LCSW, MSW
- Wynn Gerhard
- Sandy Hovey
- Paul J. Lanzikos
- James A. Lomastro, PhD
- Massachusetts Advocates for Nursing Home Reform, Arlene Germain, Policy Director
- Former Senator Richard T. Moore
- Susan Rorke