MassBio’s push to soften drug-price legislation produces plenty of drama

Bob Coughlin (center) spoke with Mayor Martin J. Walsh (right) and State Senator Michael F. Rush (left) during the MassBio Policy Leradership breakfast at Boston's Omni Parker House on Jan. 29, 2014.Wendy Maeda/Globe Staff/Globe Staff

Bob Coughlin left the State House more than decade ago. But the former state rep kept close ties with his erstwhile colleagues and built relationships with newcomers, as the drug industry’s most prominent local lobbyist.

Coughlin put those connections to the test this week, like no other time in his nearly 12 years as chief executive of the Massachusetts Biotechnology Council.

Much to Coughlin’s chagrin, the House budget contained language that would set up a new state system for capping prices that MassHealth, the state’s Medicaid program, pays for drugs. A key component would allow state officials to publicly post the prices they believe certain drugs are worth.

MassBio’s goal: to soften that language with a compromise measure, particularly limiting the public disclosure of that potentially sensitive pricing information. The members of the House of Representatives apparently agreed in the end, by voting overwhelmingly to approve the budget amendment put forward by MassBio on Wednesday.

Although Coughlin’s proposal underwent some modifications, it survived largely intact. He could declare victory by the end of the day.

But there was plenty of drama along the way.

MassBio had warned its members on Monday that the proposal to rein in drug prices would be the most damaging legislation the industry has ever seen in the state. Strong words, folks. MassBio gave glimpses of the coming apocalypse: Investors would be scared away, the pace of innovation would slow, patients would lose out on valuable cures.

Hyperbole? Probably. But Coughlin worried about the message this legislation would send.

He said it would give Massachusetts a black eye in the industry, and wreck the state’s status as the go-to place for biotech innovation. Drug companies would suddenly need to disclose price information that they could previously keep secret, he said, and state officials would have unusual power to knock those prices down.

Fortunately for Coughlin, his members heeded the call to arms. More than 500 people used an e-mail template that MassBio posted on its website to complain to their representatives and to ask for the amendment. It was the most frenetic lobbying campaign for MassBio in Coughlin’s tenure.

Governor Charlie Baker’s administration started this debate, by including in its budget submission a proposal that would give the state Health Policy Commission input on what MassHealth pays for drugs — including by demanding pricing information from companies. But Coughlin said he was still surprised to see the changes show up when it was the House’s turn to weigh in.

MassBio faced pushback, for sure. A coalition of consumer advocates, including Health Care For All, wanted the original House language to remain untouched. Those coalition members worried the MassBio amendment would restrict the data sought by the Health Policy Commission and were particularly upset about the recommendation to eliminate public hearings that would discuss drug price increases in the open.

The MassBio language, the consumer groups argued, would hinder MassHealth’s ability to negotiate drug rebates and secure important savings for the state budget. They cited the dramatic increase, from $1.1 billion to $1.9 billion, in MassHealth drug spending over the past five years.

Health Care For All offered a mixed reaction to the House vote. While the measure represents important progress on price controls, it said, more work is needed.

After the vote, House majority leader Ron Mariano said he wants drug companies to be more involved in the state’s discussions over health care cost containment. But he said the Baker administration’s proposal simply went too far, giving too much power to the Health Policy Commission and essentially allowing a public shaming of drug companies. Plus, Mariano said, the approach didn’t factor into the eventual savings that drugs can often provide, by treating or curing debilitating illnesses and keeping people out of the hospital.

The amended House plan, Mariano said, may not give Baker the instant power his administration wanted, but should help contain costs over the long haul.

Coughlin’s clarion call paid off. But now the Senate budget debate is coming up. More uncertainty looms. One thing is for sure: Coughlin won’t be putting away that Rolodex anytime soon.