House lawmakers succeeded in gutting what would have been Massachusetts’ first serious attempt to control prescription drug prices, which if successful would save the state tens of millions of Medicaid dollars.
The state Senate, which will take up the budget rider this spring, simply must do better.
House leaders caved in to a full-court press by the Massachusetts Biotechnology Council during last week’s budget debate on the House floor.
Now MassBio is surely an important part of the local economy, a point made during debate by House majority leader Ronald Mariano.
“All you have to do is take a ride through Kendall Square and look at the changes that have happened in the past 10 years,” Mariano said. “We want to make sure we don’t cripple this and allow research to continue without fear of collapsing or triple damage lawsuits.”
But at the end of the day, MassBio is just another special interest — one that certainly does good work — but one that is operating in its own self-interest, not that of the state’s taxpayers.
So here are a few inconvenient facts for lawmakers to consider in the wake of this House sellout:
■ The Medicaid program makes up about 40 percent of the more than $42 billion state budget. That crowds out other priorities that are needed to keep the state competitive, like overdue transportation and education investments.
■ In the past five years prescription drug prices for patients in that program have nearly doubled — from $1 billion a year to $1.9 billion. The introduction of new and more costly drugs — some costing as much as $1 million a year per patient — threaten to send the Medicaid budget even higher.
This year, Governor Charlie Baker filed as part of his budget bill a provision that would set up a negotiating process with drug companies with the goal of reducing prices. If in the end negotiations proved unsuccessful, disputes could be appealed to the state’s Health Policy Commission, which would include drug pricing disclosures, public hearings, and possibly a referral to the attorney general’s office under the state’s consumer protection laws.
The Baker administration insisted that only about 10 to 20 drugs would likely be at issue, but that its approach could save as much as $80 million a year.
The House Ways and Means version of the budget originally went for most of Baker’s proposal, cutting only the provision for a referral to the AG, and insisting it would save some $28 million a year. But that was before the campaign of fear and loathing launched by MassBio and its chief executive, Bob Coughlin, a former member of the House.
The MassBio-drafted amendment was offered by Representative Edward Coppinger (D-West Roxbury) and approved 152-3 in the House. It would now prohibit the Health Policy Commission from publishing what it believes the “fair” drug price to be. It also eliminates any explicit reference to authorizing the commission to hold public investigatory hearings or refer cases in which manufacturers do not comply with requests for information to the AG’s office.
In fact, it is a giant step backward — a giant step that puts Massachusetts far behind similar drug price disclosure and cost control efforts in Vermont, California, New York, and Connecticut.
And while the industry has been good to and for Massachusetts, let’s not forget that the state has also been generous to the industry. Lawmakers approved a 10-year, $1 billion investment in life sciences to be used for grants and tax breaks for the industry in 2008. It was renewed last year and signed into law by Baker, offering up another half-billion dollars over five years.
The real question now is whether the Senate is also inclined to roll over and play dead for MassBio lobbyists or whether Senate President Karen Spilka meant what she said this year about pursuing a new level of transparency in drug pricing.
It would be shameful for this state, which remains a trailblazer in fostering a thriving biotechnology industry, to remain a backwater in holding that same industry to account for its pricing policies.