Senate Passes Pharmaceutical Access, Costs and Transparency (PACT) Act 3.0
BOSTON (11/15/2023) — Today, the Massachusetts Senate unanimously passed the bipartisan Act Relative to Pharmaceutical Access, Costs, and Transparency, otherwise known as the PACT Act 3.0. The legislation would make urgent and much-needed reforms to the pharmaceutical system in the state by lowering the cost of drugs at the pharmacy counter and improving oversight of the pharmaceutical industry.
It also takes firm steps to create more equitable access to life-saving medications by providing a free, no-cost sharing option for certain drugs used to treat chronic illnesses that disproportionately affect people of color.
“Relief from prescription drug costs can’t wait when lives are at stake,” said Senate President Karen E. Spilka (D-Ashland). “I look forward to this bill getting signed into law so that residents and seniors who go to the pharmacy counter will finally pay less for the medications they use to stay alive and maintain their quality of life. This reform is in line with the Senate’s commitment to addressing affordability, equity, and transparency, and maintaining the Commonwealth’s competitiveness as a place to live and work. I am extremely grateful for the diligent and tireless work of Senator Friedman and Chair Rodrigues for their leadership on this bill, and to the rest of my colleagues in the Senate for their strong support.”
“I am pleased the Senate has passed this crucial prescription drug legislation,” 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.”
“Massachusetts often 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,” said Senator Cindy F. Friedman (D-Arlington), Senate chair of the Joint Committee on Health Care Financing. “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 the most prevalent heart conditions. 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 thank President Spilka, Chair Rodrigues, my Senate colleagues and the many stakeholders who helped to craft and improve this pressing legislation. Massachusetts deserves a health care system that delivers affordable, high quality and accessible care to all our residents and this bill brings us one step closer to that goal—I hope this is the year we can get this bill signed into law.”
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.
Lowering costs for life-saving medications
Far too often, patients cannot access the medications they need due to high prescription drug prices. This legislation takes a step towards addressing this by offering immediate price relief and limiting out-of-pocket spending for prescription drugs used to treat diabetes, asthma, and chronic heart conditions, all of which disproportionately affect black and brown residents of Massachusetts.
For each of the 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. Capping the costs of these medications will help improve access and reduce the financial burden of prescriptions, which far too often causes the dangerous practice of rationing life-saving drugs.
To make sure patients pay the lowest possible cost at the pharmacy counter, the PACT Act 3.0 also ensures that a patient purchasing a prescription drug is not charged a cost-sharing amount, such as a co-pay, if it would be cheaper for them to purchase the drug without using their insurance.
Ensuring patients can use their preferred pharmacy
The bill 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 medications, and allow any network pharmacy 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.
Holding drug companies accountable
The PACT Act 3.0 contains enhanced accountability tools to address rising costs of medications and other barriers to care. Currently, Massachusetts cannot effectively identify the drugs that have burdensome costs. These cost barriers also contribute to unaddressed health issues and often worsen conditions. To combat this, the bill 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.
To help control costs further, the PACT Act 3.0 requires pharmaceutical manufacturers 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, which are 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.
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 pharmacy benefit managers 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 manufacturers in driving health care costs moving forward.
Pharmacy Benefit Manager (PBM) Oversight
To address another potential cost driver, the bill brings 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.
Additionally, pharmaceutical manufacturers and PBMs will be included in the HPC’s 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 Massachusetts residents.
The bill has also gained support from leading advocates for healthcare access.
In a statement, the Health Equity Compact praised the legislation, saying, “The Health Equity Compact commends the Senate for including provisions to address the increasing cost burden of certain medications for chronic conditions in An Act Relative to Pharmaceutical Access, Costs and Transparency. Providing affordable medications for diabetes, asthma, and heart conditions is an important step toward addressing health inequities, and these provisions are also included in the health equity omnibus bill which would pave the way for the next chapter of health reform. We thank the Senate President and Senator Friedman for their work to address health disparities in the Commonwealth and look forward to continued partnership with our legislative colleagues.”
"The cost of prescription drugs has risen rapidly, putting critical medications out of reach for many," said Amy Rosenthal, Executive Director of Health Care For All. "This legislation will ensure thousands of residents are able to better afford the necessary medications to manage their diabetes, asthma and heart conditions, and bring transparency and accountability to the drug industry through the state's cost trends process."
During the debate, the Senate adopted an amendment from Senator Pavel Payano (D-Lawrence) to ensure that safety net hospitals and federally qualified community health centers can purchase discounted drugs from drug manufacturers through the federal 340B program. This program helps to keep costs low for patients who are served by hospitals in vulnerable communities.
Furthermore, the Senate adopted an amendment from Senator Cynthia Creem (D-Newton) that directs a study whether the state should adopt a statewide policy requiring schools, police stations, and fire stations to maintain a supply of epinephrine injectors on hand, to support students and residents in need. The Senate has been a leader in putting forth policies that 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.
Today’s passage marks the third consecutive session that the Senate has passed legislation to rein in drug costs and reform the pharmaceutical system, as drug costs have continued to climb higher with each passing year.
The PACT Act 3.0 now moves to the Massachusetts House of Representatives for consideration.