Governor Baker, drug industry at odds over price control plan

Massachusetts

BOSTON (SHNS) – With about a week to go until lawmakers start focusing on their own budget plans, Gov. Charlie Baker touted his budget plan’s provision to control the rising costs of prescription drugs and was joined by Connecticut Gov. Ned Lamont, who is pursuing a nearly identical policy in his own state.

The budget that Baker filed in January (H 1) includes an outside section (Section 28) that would impose a penalty on drug manufacturers whose prices increase by more than the consumer price index plus two percent.

“This will instantly help people plan from one year to the next. It will also help limit the growth in drug prices to a more affordable level and I’m hopeful that we’ll be able to work with our colleagues in the Legislature to get this measure done this year as part of our legislative session,” Baker, a Republican, said Tuesday morning during an interstate press conference with Lamont, a Democrat.

In Connecticut, Lamont’s similar legislation (HB 6447) has already emerged from a legislative committee. Baker’s proposal, as part of the fiscal year 2022 budget, is under the review of the Joint Ways and Means Committee.

The House is expected to release its own fiscal year 2022 budget plan next week and debate the bill later this month. If the House does not include Baker’s drug pricing outside section, the administration could lean on the Senate to include it in the budget and then advocate for it during the conference committee process, or it could opt to pursue the policy through a standalone piece of legislation. Fiscal year 2022 starts July 1.

The Center for Health Information and Analysis’s annual report on health care costs in Massachusetts recently found that gross prescription drug spending totaled $10.7 billion in 2019, up 7.2 percent from the previous year. When taking rebates for prescription drugs into account, pharmacy spending grew 3 percent from 2018, to $8.3 billion.

“Considering that less than two weeks ago CHIA’s annual report found that prescription drugs are not a leading driver of healthcare costs in Massachusetts, it’s astonishing that the Governor is again trying to push his tired proposal on prescription drug price controls,” said Zachary Stanley of the Massachusetts Biotechnology Council, an industry group that represents life sciences companies. “In practice, this policy would do nothing to reduce costs for patients but would inhibit the biopharmaceutical industry’s ability to develop innovative, life-changing treatments and cures – like the COVID-19 vaccines, which Massachusetts residents are currently benefitting from. It bears repeating that this policy is unnecessary and ignores the numerous, existing tools the Massachusetts state government can use to reduce prescription drug spending.”

Similarly, the national group Pharmaceutical Research and Manufacturers of America, said Baker’s idea could slow innovation and make it harder for patients to get their medications. The group also alleged that Baker and Lamont were using Connecticut as a guinea pig for a failed policy.

“Rather than lowering out of pocket costs by fixing the system that forces many patients to pay more for their medicines than their insurer, these governors are trying to make Connecticut a test case for a dangerous and misguided proposal that has failed to get support in Massachusetts several times,” Priscilla VanderVeer, vice president of public affairs for PhRMA, said.

Lora Pellegrini, president of the Massachusetts Association of Health Plans, said her organization supports Baker’s proposal.

“Increases in the cost of prescription drugs and specialty drugs are major drivers of health care spending,” she said. “Given that Massachusetts failed to meet the health care cost benchmark in 2019, it is important that we re-double our efforts relative to cost containment as we seek to make health care coverage more affordable for employers and consumers.”

Baker, a former health insurance executive, said Tuesday that the biotech industry is “critically important” because it provides lots of jobs and solves massive problems for society. He said the success of the biotech and pharma industries in developing effective COVID-19 vaccines in such a short period of time is a miracle.

“But that is a lot different than the issue we’re talking about here, which is a market in which the vast majority of the products that get sold every single day have been on the market for years, in many cases decades, and why there would be this issue and problem continuing year after year after year with these products seeing very significant increases in their list price that go way beyond anything that looks like inflation, just flies in the face of what I would describe as sort of common sense,” he said.

Responding to criticism his plan has faced in Connecticut, Lamont said Tuesday that nothing about the proposal should impede innovation or research.

“All those innovation investment costs are baked into the original price of the drug. And all we’re doing is capping the increase going forward so Boehringer [Ingelheim Pharmaceuticals] and all the other great pharmaceutical companies won’t have any less incentive to go forward and continue to make those investments,” he said.

While there is no real connection between the Massachusetts and Connecticut proposals, Baker said he and Lamont decided to jointly discuss the idea because they had been talking to each other about it for a while and thought it could be helpful to other states that are looking for ways to control prescription drug prices.

“I don’t think there’s an inherent benefit to having two states doing this as opposed to one,” Baker said. “What I would say is I think the idea is a sound one and if it’s one that other states are interested in pursuing, we’d be happy to talk to them about it as well and obviously if it’s something folks at the federal level want to talk about, we’d be all in on those conversations, too.”

Driving on The Merritt

The joint press conference with Baker and Lamont also included accounts of two people who rely on prescription medication: Karolina Chorvath, of Boston, who lives with Crohn’s disease, and Jay Gironimi, of Groton, CT, who has cystic fibrosis.

Gironimi said he has “spent my entire adult life trying to find ways to afford Pulmozyme and a variety of other medications, I’m currently on 10.” He said he recently started on Trikafta, a drug that treats nearly all of his symptoms but “makes Pulmozyme look cheap” with a yearly list price of about $300,000.

“That’s on top of the cost of the pills I take to help me digest food, the various inhaled medications I have to take and the insulin I now need due to diabetes caused by my CF. The ever-rising prices of these medications, on top of my Trikafta, terrify me,” he said. “I live in fear of the day I have to face the $32,000 fee it costs me to stay alive for a single month. I do not have that money. Even if I maxed out my credit cards, I would only get halfway there.”

Lamont, who was first elected governor of the Nutmeg State in 2018, said drug prices were one of the first things he and Baker talked about.

“I had just been elected, I was driving down the Merritt Parkway with [Connecticut First Lady] Annie and the first call I got was a guy named Charlie and he said, ‘Congratulations. What are we going to do about drug pricing together?’ And that was Charlie Baker,” Lamont said.

The Connecticut governor, who had a background in the telecom industry before becoming politically active, said a few times Tuesday that he thinks Massachusetts has led the way among the states on health care reform and said Baker is the right person to be at the wheel.

“I think he’s too modest. I think Massachusetts has really taken the lead on this. I’m an old cable TV guy so I’m happy to have Charlie take the lead on this work together,” he said. “I think together we can make a difference and show the rest of the country how we can make drug pricing a lot more predictable for some folks who need it.”

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