After years of advocacy, passage of the PACT Act this past January enabled Massachusetts to hear directly from the pharmaceutical industry at this year’s Health Policy Commission (HPC) Cost Trends Hearing for the first time since it was established over a decade ago. Drug manufacturers and pharmacy benefit managers (PBMs) were required to submit testimony and testify in person at the hearing, finally joining hospitals and health plans in the conversation on the states’ growing health care costs. This opportunity couldn’t come soon enough, given that health insurance premiums in Massachusetts are set to rise by an average of 11.5% next year — an increase driven largely by soaring drug prices. The new pharmaceutical industry panel was a reminder of what the state had missed over the past ten years, providing long overdue context on the dynamics driving rising costs that can help guide policymakers and advocates navigating health care access challenges across the state.
The pharmaceutical industry was represented on the panel along with a commercial health plan, the state employee health plan and the Institute for Clinical and Economic Review (ICER). They discussed issues including current challenges with GLP-1s, changes in the ways PBMs are compensated for their services, and future issues related to expected high-cost gene therapies. Both health plans cited unprecedented challenges in keeping plans affordable in the face of unsustainable cost growth, particularly due to the impact of high-cost drugs like GLP-1s. ICER emphasized the importance of establishing a value assessment for helping to determine prescription drug prices. Panelists also addressed opportunities for new payment structures for high-cost treatments, such as subscription-based models and fixed budget models to create more predictable pricing for health plans. Overall, the panelists emphasized both the urgency of reducing costs and the need to maintain access in an equitable way, while raising the specter of future challenges. How will we manage expensive, but highly valuable gene therapies that could offer value over decades, but come with exorbitant costs in a single year? Fortunately, the PACT Act, also established the HPC’s new Office of Pharmaceutical Policy and Analysis which will be able to help the state navigate these difficult questions.
This new insight on prescription drug costs in Massachusetts from the benchmark hearing comes just as several major changes to drug pricing are about to take hold at the federal level, although most of the changes apply only to those with Medicare or who purchase drugs without insurance. Negotiated prices for the first 10 Part D drugs will take effect next year. This is the first year people with Medicare will see the direct impact of the legislation passed as part of the Inflation Reduction Act. The negotiated rates are expected to save Medicare beneficiaries $1.5 billion in out-of-pocket costs. Just last week, 15 new negotiated drugs were announced, which will give people with diabetes, cancer, asthma, heart disease and other serious chronic conditions more affordable access to critical treatments. Unfortunately, the 2025 budget reconciliation bill—HR 1—reduced the efficacy of the IRA’s negotiation program by limiting the drugs that can be subject to negotiation.
There has also been a flurry of announcements from the President regarding negotiated deals with several drug manufacturers to lower the Medicaid prices of their drugs in exchange for tariff relief. The agreements included a “direct to consumer” (DTC) website “TrumpRx” where patients can purchase drugs directly from manufacturers. However, experts are skeptical that these deals will translate to more affordable medications for patients, since most patients with health coverage would pay less through insurance than they would pay in cash from a DTC site even with discounted prices.
Unfortunately, the majority of residents in Massachusetts who have private health insurance coverage won’t be helped by these federal policy changes and will be effectively left to fend for themselves. That is why HCFA is advocating for prescription drug reform legislation that would help these residents and continue to build on legislation passed last session. It’s clear from this year’s pharmaceutical panel at the cost trends hearing that we need to find a way to make prescription costs sustainable for patients, employers, and state health care costs. The proposal would review high-cost drugs and set upper payment limits that could yield real savings for both the state and those with commercial insurance. It would ensure that Massachusetts pays fair prices for drugs—and that patients can afford the medications they need to stay healthy. We can’t let anyone fall behind and find themselves unable to afford the medications they need, now, and in the years ahead.
Grace Jurkovich is a Policy Manager at Health Care For All.
