Joint committee weighs new tools to rein in drug prices, expand PBM oversight

Members of the Joint Committee on Healthcare Finance heard multi‑stakeholder testimony Thursday on Senate Bill 868 and companion measures aimed at addressing rising prescription drug costs and the market power of pharmacy benefit managers (PBMs).

The bill would expand the Health Policy Commission’s (HPC) authority and create new tools to review drug affordability, including an upper payment limit (UPL) mechanism modeled on programs in states such as Maryland and Colorado. Advocates, health plans, patient groups and the attorney general’s office urged action; pharmaceutical industry groups and some supply‑chain representatives raised concerns about implementation and potential access effects.

Why it matters: Prescription drugs are the single largest driver of health care spending increases in Massachusetts, witnesses said. Health Care for All cited CHIA data showing rapid growth in pharmacy spending and hospital outpatient costs; patient and disability advocates described examples of people who skip or crowd‑fund medications because of price. The proposals seek to give the Commonwealth direct tools to address price spikes that “do not correlate with value,” according to testimony from Ashley Blackburn of Health Care for All.

Key testimony and points

- Ashley Blackburn (Health Care for All) said the bill’s UPL authority would let Massachusetts target drugs “with the most egregious price increases that do not correlate with their value,” and pointed to states already using similar tools.

- Samantha Fine (Disability Policy Consortium) described how high drug costs disproportionately harm people with disabilities, noting a CDC finding that people with disabilities who take prescription medications are nearly three times more likely than others to skip doses because of cost.

- Kelly Ryan (Pharmaceutical Research and Manufacturers of America) opposed parts of the bill, urging the committee to allow the newly created HPC pharmaceutical office to complete its work first and warning that UPLs could disrupt access and patient cost sharing, citing payer surveys that predict coverage changes if UPLs are set without careful design.

- Dennis Lyons (Massachusetts Independent Pharmacists Association) and Kelly Memphis (Healthcare Distribution Alliance) urged stronger regulation of PBMs and more transparency, with independent pharmacists warning that opaque PBM contracting and take‑it‑or‑leave‑it reimbursement rates threaten community pharmacies.

- Sarah Charamita and Paul Jones (Massachusetts Association of Health Plans) and Blue Cross representatives signaled conditional support for stronger oversight and UPLs as tools to slow premium growth, while urging careful drafting to avoid unintended effects on access and the 340B program.

Technical and legal issues raised

Industry witnesses warned of potential legal challenges and implementation complexities for UPLs; PhRMA noted that existing state boards with UPL authority have not yet implemented set prices and argued for a broader supply‑chain review. Witnesses representing wholesalers asked clarifying edits so distributors not be held liable for manufacturers’ pricing decisions. Attorney General staff supported expanded ability to compel data from manufacturers and PBMs and stronger tools to address private equity practices that can harm hospitals.

Next steps and limitations

Committee chairs said the new authority is intended to be targeted and to complement the recently created Office of Pharmaceutical Policy and Analysis at HPC. Several witnesses and members requested follow‑up work to refine definitions, legal protections for orphan/rare‑disease drugs, and mechanisms to prevent PBMs or other intermediaries from undermining UPL outcomes.

Ending

Supporters urged the committee to move the bill forward, saying state‑level tools are needed now to reduce premiums and make essential medicines affordable for patients who cannot absorb high out‑of‑pocket costs.