Broad coalition backs increased market oversight and new drug‑pricing tools; industry warns of risks

BOSTON — Dozens of consumer advocates, disability groups, independent pharmacists, the attorney general’s office and insurers urged the Joint Committee on Health Care Financing to advance legislation (including Senate Bill 868, House Bill 1361 and Senate Bill 904) that would strengthen state market oversight of hospitals and the pharmaceutical supply chain and give regulators new tools to address high drug prices.

Supporters described a tangled drug supply chain made up of manufacturers, pharmacy benefit managers (PBMs), insurers and wholesalers and said the bill package would give the Health Policy Commission (HPC) and the Division of Insurance expanded authority to monitor and, in targeted cases, constrain outlier prices. "Prescription drug costs are health care’s biggest open secret," Ashley Blackburn of Health Care for All testified. "Transparency alone will not stop unaffordable prices."

Key provisions discussed included early notice requirements for steep price increases, expanded HPC review authority that would include commercial market impacts, and a proposed "upper payment limit" (UPL) authority that would allow the state to set maximum reimbursement levels for drugs judged to have prices that are not commensurate with value. Proponents cited other states — notably Maryland, Colorado and Washington — that have adopted UPL‑style mechanisms for certain drugs and urged Massachusetts to create similar authority.

The attorney general’s health care division, represented by Sandy Wolitsky, supported stronger market oversight and said the office needs tools to challenge market changes that could raise costs or reduce access. Wolitsky noted the Steward Health bankruptcy and private‑equity practices as examples of the types of risks the bill seeks to address and said the bill would strengthen enforcement tools and create an affordability benchmark to monitor consumer spending growth.

Advocates for people with disabilities and community organizers emphasized the human impact of high drug prices. Samantha Fine of the Disability Policy Consortium recounted constituents unable to afford medications, with some paying more for prescriptions than rent. Local nurse and nonprofit leader Lobo Caligo described paying $321.64 weekly in premiums and facing high out‑of‑pocket costs for care.

Independent pharmacists and the Massachusetts Independent Pharmacists Association warned that PBM practices and opaque contract terms threaten community pharmacy viability. "PBMs determine who is eligible, what drugs are covered and how much pharmacies are paid," said Dennis Lyons, representing independent pharmacists; he called for transparency in PBM contracts and for dispensing fees tied to NADAC (a national benchmark) rather than secret PBM rates.

Manufacturers and some national supply‑chain groups resisted portions of the proposal. Kelly Ryan of PhRMA said the bill focused too narrowly on manufacturers and urged the committee to allow work by the recently created Office of Pharmaceutical Policy and Analysis to proceed first. She warned that upper payment limits are untested in practice and that payers surveyed by trade groups expect disruption. Kelly Memphis of the Healthcare Distribution Alliance, representing wholesalers, asked that wholesale distributors not be inappropriately held responsible for pricing decisions they do not make and requested clarifying amendments.

Blue Cross Blue Shield and the Massachusetts Association of Health Plans (MAP) expressed conditional support for upper payment limits as a targeted tool to rein in outlier drug costs. Blue Cross representatives also raised concerns about out‑of‑network billing abuses in other bills heard by the committee and highlighted PBM market concentration as a driver of complexity.

Academic testimony from Assistant Professor Rosalind Murray of Brown University supported strengthening the cost benchmark and enforcing penalties against dominant hospital systems, arguing that hospital prices are driven by market power rather than higher quality or costs.

Committee members asked for clarifications about how UPLs would interact with PBMs, how Massachusetts would avoid harming patients who need high‑cost specialty or orphan drugs, and legal risks such as potential federal preemption or litigation. Manufacturers noted ongoing litigation in other states and urged caution.

Witnesses from all sides asked to work with the committee on technical amendments to protect patient access while increasing transparency and enforcement; no committee votes were taken during the hearing.