Massachusetts officials would have more authority to set payment limits on certain high-priced drugs under a cost control measure adopted as an amendment to the Senate budget.
Agreed to on a 34-5 vote Wednesday, the amendment would effectively give teeth to a drug price review board already active in the state. It would make it one of the more powerful of at least nine similar entities established across the country, as lawmakers have experimented with policy solutions to address the high price of prescription drugs.
The amendment clarifies the process for the state Health Policy Commission to monitor costs for certain drugs. When the commission determines that a price “substantially exceeds” the value of the drug, it can set a limit on the maximum amount pharmacies, insurance providers and health plans in the state are allowed to pay.
“We spend an enormous amount on prescription drugs,” Sen. Cindy Friedman (D), the amendment sponsor, said on the Senate floor. “My amendment poses one, just one, solution.”
“Addressing the escalating cost of health care in Massachusetts is one of the top priorities of this chamber, and I’m pleased we have passed a major prescription drug cost control measure, an initiative seniors will especially appreciate,” Sen. Michael Rodrigues (D), chair of the Senate Ways and Means Committee, said in a statement.
The provision was not included in the budget adopted by the House in April but can be added during the reconciliation process before the final budget is submitted to Gov. Maura Healey (D) this summer.
Health policy experts have for years promoted the idea of independent boards made up of experts who can demand pricing data from often-secretive pharmaceutical suppliers and wield the states’ market power to bring costs under control.
The boards — called drug utilization review or prescription drug affordability boards, depending on the state — are generally charged with assessing which drugs pose affordability challenges to patients and the state health care system.
When they determine a drug is unaffordable, the boards can make recommendations to the legislature to bring the cost down.
Critics, including pharmaceutical companies and some patient groups, have warned that those attempts could backfire, potentially creating supply chain disruptions and limiting patient access to drugs with upper payment limits. Some skeptics have questioned whether cost reductions would be passed down to patients.
But states are charging ahead. Massachusetts would become the fifth state — after Colorado, Washington, Maryland and Minnesota — to authorize its review board to set upper payment limits. So far only Colorado has implemented payment limits on any drugs.
In Maryland, Gov. Wes Moore (D) signed a bill this week extending the state board’s authority to cover drugs purchased by any provider in the state, not just state health plans.