Baker, Drug Industry At Odds Over Price Control Plan

As lawmakers prepared to scrutinize the health and human services chunk of his fiscal 2022 budget Tuesday, Gov. Charlie Baker held an interstate press conference with Connecticut Gov. Ned Lamont to talk up their nearly identical proposals to control the rising costs of prescription drugs.

Baker's budget recommendation (H 1) includes an outside section that would impose a penalty on drug manufacturers whose prices increase by more than the consumer price index plus 2%.

"This will instantly help people plan from one year to the next. It will also help limit the growth in drug prices to a more affordable level and I'm hopeful that we'll be able to work with our colleagues in the Legislature to get this measure done this year as part of our legislative session," Baker said.

In Connecticut, Lamont has proposed essentially the same policy and his legislation (HB 6447) has already emerged from a legislative committee. Baker's proposal, as part of the fiscal year 2022 budget, is under the review of the Joint Ways and Means Committee. That panel is holding a hearing Tuesday afternoon specifically to hear more about the funding plan for the Executive Office of Health and Human Services.

A Center for Health Information and Analysis annual report on health care costs in Massachusetts recently found that gross prescription drug spending totaled $10.7 billion in 2019, up 7.2% from the previous year. When taking rebates for prescription drugs into account, pharmacy spending grew 3% from 2018, to $8.3 billion.

"Considering that less than two weeks ago CHIA's annual report found that prescription drugs are not a leading driver of healthcare costs in Massachusetts, it's astonishing that the Governor is again trying to push his tired proposal on prescription drug price controls," Zachary Stanley, executive vice president of MassBio, said. "In practice, this policy would do nothing to reduce costs for patients but would inhibit the biopharmaceutical industry's ability to develop innovative, life-changing treatments and cures – like the COVID-19 vaccines, which Massachusetts residents are currently benefiting from. It bears repeating that this policy is unnecessary and ignores the numerous, existing tools the Massachusetts state government can use to reduce prescription drug spending."