Lawmakers largely followed Baker’s lead to reach compromise to curb drug costs
State lawmakers on Monday approved a $43.1 billion state budget that included something rarely seen in 2019 politics: a compromise on a difficult hot-button issue.
Legislators voted in favor of new policies to curb the cost of prescription drugs in the state Medicaid program, putting their stamp on a plan initially laid out by Governor Charlie Baker in January. Consumer advocates applauded the compromise, while drug company lobbyists indicated they could live with it.
Lawmakers softened some of Baker’s original language but generally followed his blueprint to require drug companies to negotiate discounted prices with the state.
Representative Aaron Michlewitz, the House budget chief, told fellow lawmakers Monday that he is “looking forward to seeing those savings [in drug prices] that are attained as a direct result of the language that is before you today.”
The drug pricing rules were among the most controversial pieces of the state budget plan. A committee of legislators negotiated the budget behind closed doors for several weeks, finally reaching a deal on Sunday. The full House and Senate voted almost unanimously Monday to adopt the plan.
The budget for the 2020 fiscal year — which is three weeks late — now goes to the governor, who has 10 days to sign it or make changes to specific sections.
The compromise seems to accomplish much of what Baker tried to do in his original drug pricing plan, but administration officials declined to discuss the measure specifically on Monday. Spokesman Brendan Moss said the administration will carefully review the final budget when it reaches the governor’s desk.
Rising prescription drug prices have become a major national political issue, and some states in addition to Massachusetts have considered or adopted policies to curb prices.
The lengthy legislative compromise gives administration officials more power to require pharmaceutical companies to negotiate discounts for particularly expensive drugs. It also allows them to set a proposed value for a drug, and to hold a public hearing about that value — though drug companies would not be required to testify publicly.
Administration officials also could refer drug makers to the Health Policy Commission, a state watchdog agency. The commission could demand more detailed price information from drug companies, but much of that information would stay out of the public view.
Amy Rosenthal, executive director of the consumer advocacy group Health Care For All, said she hopes the governor signs the compromise language.
“It’s a major step forward for reining in costs,” she said. “This is the first step of what we think will be continued and more robust conversations around prescription drug pricing.”
The Massachusetts Biotechnology Council, a lobbying group for drug companies, had slammed Baker’s original proposal, arguing that it would chill investment in innovation and discourage biotech firms from doing business in the state.
The group’s chief executive, Robert K. Coughlin, softened his tone on Monday, saying the Legislature’s final budget is “a good compromise” that omits some of the language that drug makers found objectionable — including a mechanism for referring high-cost drugs to the attorney general’s office for investigation.
“I thank the House and Senate negotiators for carefully considering the real-world impact of this policy and removing language that would threaten patient access and innovation,” Coughlin said in an email Monday.
“Massachusetts will continue to be the best place in the world for this industry,” he added.
A spokeswoman for another industry group, Pharmaceutical Research and Manufacturers of America, said drug companies remain concerned about the policy.
Drug companies have long enjoyed a comfortable relationship with Beacon Hill; the state has spent hundreds of millions of dollars to boost the local biopharma industry over the past decade. The proposals to tackle drug costs this year have complicated that relationship.
Baker administration officials have argued that prescription drug costs are growing at an unsustainable rate in the state Medicaid program, known as MassHealth, which provides coverage for more than 1.8 million people.
Senator Cindy Friedman, one of six lawmakers who negotiated the budget deal, said the compromise is close to what Baker first proposed. “I do suspect the governor will like it,” she said.
“We truly believe this is going to save money and add some transparency so we understand better why drugs cost what they do,” Friedman added.
The Legislature’s budget deal omits proposals from Baker to add new taxes on opioid manufacturers and vaping products. But lawmakers indicated they may return to these issues later.
Marc Hymovitz, Massachusetts director of government relations for the American Cancer Society Cancer Action Network, said he feels “confident that the Legislature will take something up this session” on e-cigarette taxes.
“They are hearing from their communities that this is an epidemic among kids, and they want to do something about it,” he said.
The compromise state budget also puts nearly $270 million more into public school spending and increases funding to the University of Massachusetts without freezing tuition.
It includes $317 million more in spending than either the House or Senate had initially proposed, and sets aside additional money for the state’s reserves.