Senate Unveils Pharmaceutical Access, Cost and Transparency (PACT) Act 3.0
Revamped bill builds on Senate’s work to reduce prescription drug costs,
promote transparency, and increase patient access
BOSTON (11/09/2023) – Today, the Massachusetts Senate unveiled An Act relative to Pharmaceutical Access, Cost and Transparency, otherwise known as the PACT Act 3.0. This comprehensive pharmaceutical cost control legislation is aimed at addressing the rapidly increasing costs of prescription drugs. By connecting the need for greater drug price transparency with policies to improve oversight for the pharmaceutical industry, the PACT Act 3.0 puts the Senate at the forefront of the state’s efforts to tackle rapidly increasing prescription drug costs. It will also reduce drug costs for patients and lower health care costs overall, as well as provide a no-cost sharing option for certain prescription drugs used to treat chronic illnesses that disproportionately affect communities of color and residents with lower income.
“The Senate is deeply committed to continuing its work to advance racial and economic equity, and addressing the burdensome health care costs on communities of color and low-income communities is a key component of this work. That’s why I am so proud that the Senate’s latest version of our prescription drug cost containment legislation directs insurers to offer certain prescription drugs used to treat asthma, heart disease, and diabetes—chronic illnesses that disproportionately affect communities of color and residents with lower income—at a low or no cost to consumers,” state Senate President Karen E. Spilka (D-Ashland). “Residents can’t wait for prescription drug relief, especially when lives are at stake. This is a bill that will take major steps towards addressing affordability for all our residents, along with increasing access to important life-saving medications. I’d like to thank Senator Friedman for her unwavering leadership on this issue, Senator Rodrigues and Senate Ways and Means for their hard work on this bill, and all the advocates, stakeholders and people who have contributed their voices to this discussion. I’m looking forward to passing this bill in the Senate before Thanksgiving and am hopeful to see a version of this bill on the Governor’s desk by the end of this session.”
“Massachusetts deserves a health care system that delivers affordable, high quality and accessible care to all our residents,” said Senator Cindy F. Friedman (D-Arlington), Senate chair of the Joint Committee on Health Care Financing. “Massachusetts serves as a national leader, providing ground-breaking health care services and fostering innovative breakthroughs for our biotech and life sciences sector. But everyday residents of our Commonwealth are being priced out of essential and life-saving medications. This bill begins to meet the urgency of this challenge by eliminating cost-sharing for generic drugs and capping out-of-pocket costs for brand name drugs used to treat insulin, asthma, and heart disease. In addition, this legislation will provide much needed relief for certain high-cost drugs, improve patient access to medications and pharmacies of their choice, and enhance transparency and oversight within the pharmaceutical industry. I hope this is the year we can get this bill signed into law.”
“I am pleased the Senate is again moving this crucial prescription drug legislation forward,” said Senator Michael J. Rodrigues (D-Westport), Chair of the Senate Committee on Ways and Means. “Healthcare is all about accessibility and affordability, and this reform-minded consumer focused bill will allow increased access to prescription drugs while also considerably driving down the cost of everyday medications. I thank Senator Friedman for her leadership on this and many healthcare issues as this bill will literally save lives.”
Far too often, patients cannot access the medications they need due to high prescription drug prices. The PACT Act 3.0 contains enhanced accountability tools to address this and other barriers to care.
Currently, Massachusetts cannot effectively identify drugs where burdensome costs prevent patients from being able to afford them. These cost barriers also contribute to unaddressed health issues and often worsen conditions.
This legislation directs the Health Policy Commission (HPC), in consultation with stakeholders, to establish a process for identifying high drug prices that create access barriers to essential medicines that address the priority health care needs of residents of the Commonwealth. In addition, it allows the HPC to recommend pricing measures to increase patient access to necessary medications.
Pharmaceutical manufacturers that fail to comply with this process will be required to pay a fee that will go into a trust fund for a new drug cost assistance program to support patients with certain chronic health conditions that disproportionately impact communities of color and low-income communities.
Further, the legislation offers immediate price relief for prescription drugs used to treat diabetes, asthma, and chronic heart conditions. The financial burden of accessing these life-saving drugs often forces patients to engage in the dangerous practice of rationing their medication.
To address this problem, the PACT Act 3.0 limits out-of-pocket spending on certain drugs used to treat diabetes, asthma, and heart conditions. For each of chronic conditions identified, the bill requires insurers to eliminate deductibles and cost-sharing requirements for one generic drug and to cap co-payments on one brand-name drug at $25 per 30-day supply.
To address another potential cost driver, the bill seeks to bring oversight to pharmacy benefit managers (PBMs), which play a major role in determining how prescription drugs are tiered and priced on insurance plans. PBMs serve as middlemen between prescription drug buyers and sellers and currently operate with little oversight, making it unclear if they act in the best interest of consumers or health plans when they negotiate the price of drugs with pharmaceutical manufacturers. The PACT Act 3.0 authorizes the Division of Insurance (DOI) to provide much-needed oversight by licensing and regulating PBMs—and establishing sanctions for PBMs that fail to meet certain standards.
To make sure patients pay the lowest possible cost at the pharmacy counter, the PACT Act 3.0 ensures that a patient purchasing a prescription drug is not charged a cost-sharing amount, such as a co-pay or deductible, if it would be cheaper for them to purchase the drug without using their insurance.
The bill also takes significant steps toward ensuring that patients can get their prescription drugs from the pharmacy that they choose. This bill will allow independent pharmacists the opportunity to become licensed to dispense specialty drugs and contract with insurance plans to provide specialty medications to patients. The bill also allows network pharmacies to contract with carriers to provide mail-order prescriptions, changing the current practice of carriers determining what pharmacies are available to patients for mail order prescriptions.
To help control costs further, the PACT Act 3.0 requires pharmaceutical companies to notify the state in advance of new drugs coming to market and of significant price increases for existing drugs. With advanced notification, the state’s MassHealth program can better prepare for potential cost increases by exploring ways to mitigate the cost or negotiating improved prices. In addition, advance notification will enable the HPC to focus on these cost drivers at their Cost Trends Hearings—held each year to examine the drivers of health care costs; identify challenges and opportunities for improving care and reducing costs in Massachusetts; increase transparency and accountability for health care providers and insurers; and help the state to meet its annual health care cost growth benchmark.
In addition, pharmaceutical manufacturers and PBMs will be included in the HPC annual Cost Trends Hearings for the first time. By participating in the hearings process, pharmaceutical manufacturers and PBMs will be required to provide public testimony on the factors that influence drug costs and provide documentation to back up their claims. HPC will use this information to analyze how pharmaceutical industry costs impact the state’s health care market—and the ultimate cost of health care for Commonwealth residents.
This bill also empowers the Center for Health Information and Analysis (CHIA), an independent state agency that provides objective analysis of the quality, affordability, utilization, and access to the Massachusetts health care system, to collect a range of drug cost information from pharmaceutical manufacturers and PBMs to include in its annual health care cost report, which does not currently include comprehensive data on drug costs. Collecting this data will allow policymakers and consumers to better understand the role of pharmaceutical companies in driving costs moving forward.
The Senate has been a leader in putting forth policies to address unaffordable drug costs. The HEALTH Act, passed by the Senate in 2017, proposed policies to incorporate pharmaceutical costs into the state’s annual health care cost oversight process and ensure that consumers are offered the lowest available prices at the pharmacy.
The Senate also championed the inclusion of provisions in the Fiscal Year 2020 budget to allow MassHealth to directly negotiate supplemental drug rebates to save the state millions of dollars each year. The Senate passed the first iteration of the PACT Act in the 2019-2020 session and passed the second version of the legislation last March. The PACT Act 3.0 takes additional important steps to rein in drug costs and improve patient access throughout the health care system.
The Senate is scheduled to debate the PACT Act 3.0 next week.