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A Pioneer in Health Policy Reform, Massachusetts Eyes Next Frontier: Drug Prices

The state credits its past success to a “culture of coverage,“ where everyone from policymakers and businesses to insurers and hospitals put some skin in the game. Now, it’s time for the pharmaceutical industry to step up.

Prescription drugs

Two decades after Massachusetts implemented statewide health insurance reform — a first-of-its-kind model that would later serve as the foundation for the Affordable Care Act — the Commonwealth is now taking aim at one of the nation’s most perplexing problems: Skyrocketing drug prices.

Although most Americans agree that it’s time to rein in the expensive costs of prescription drugs, federal legislation to tackle the problem has been mired in partisan rancor.

Not so in Massachusetts.

Policymakers and advocates from across the aisle have joined together in calling for action on drug prices. Statewide legislation is gaining bipartisan momentum in the state’s Senate, House, and governor’s office, signaling the potential for another landmark health policy law to get passed this year.

Helping to drive change behind the scenes is a group called Health Care For All, a health justice advocacy organization funded by Arnold Ventures that is helping knit together the disparate groups and advance policy solutions that aim to provide financial relief for Massachusetts residents.

We sat down with Amy Rosenthal, Executive Director of Health Care for All, to learn more about the organization’s efforts to rally support for state policy changes and lead Massachusetts to once again ignite a spark for national reforms.

Responses have been edited for clarity and brevity.

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Arnold Ventures

How did drug pricing become a central policy concern for Massachusetts?

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Amy Rosenthal

Prescription drugs are a huge cost driver for MassHealth, our statewide Medicaid program, and we know that if we want to continue to protect coverage for people in Massachusetts, we need to figure out how to bring down the cost of prescription drugs. To effect change, a coalition was formed of partners representing all of the different stakeholders affected — consumer groups, insurers, unions, providers — working in tandem to create policy solutions that could move through the legislative process. We knew, from previous discussions and legislative proposals, that Gov. (Charlie) Baker and lawmakers were open to the idea of bringing down the cost of prescription drugs, and we saw a window of opportunity to drive a policy agenda.

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Arnold Ventures

Why is Massachusetts an ideal place to pioneer drug pricing reform?

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Amy Rosenthal

Here in Massachusetts, a wide range of stakeholders firmly believe we need to promote a “culture of coverage.“ Whether we are talking to policymakers or business leaders, insurers or hospital executives, we all generally start from the same premise that people should have access to health care.

The Massachusetts experiment in 2006 worked because at the end of the day almost every group — except the pharmaceutical industry — put some skin in the game. In this culture of coverage — where everyone is expected to do their fair share — it’s time for the pharmaceutical industry to be an equal player to ensure that everyone has fair access to affordable coverage.

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Arnold Ventures

What exactly is Massachusetts doing to rein in drug prices?

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Amy Rosenthal

Over the summer during the state budget debate, legislators gave our Executive Office of Health and Human Services (EOHHS) the ability to enter into negotiations for supplemental rebates on drugs for the MassHealth program — and if an agreement can’t be struck, EOHHS has the ability to determine the proposed value of the drug, hold a public hearing, and let people know what the proposed value is. In just the first couple of months, EOHHS has negotiated the price of six drugs and has achieved $6 million in savings for the state.

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Arnold Ventures

Six million dollars? That’s quite a bit of money for such a short period of time and an astounding achievement for such a simplistic idea.

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Amy Rosenthal

Yes, it makes logical sense, but I don’t want to Monday-morning-quarterback this. Because for legislators, this wasn’t an easy thing to get to. Figuring out who gets to decide the proposed value, using what information, and how to do it without jeopardizing pharmaceutical companies’ confidential and proprietary business information is not easy. It is also a very challenging political issue, particularly in Massachusetts where we have a thriving biotech industry. I want to give a lot of credit to lawmakers for this. But we didn’t stop there.

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Arnold Ventures

What happened next?

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Amy Rosenthal

We couldn’t just stop with bringing down costs for the public health insurance program. We need to also address the private market where 3 out of 5 residents of the Commonwealth get their coverage. Last October, Gov. Baker introduced a comprehensive health care bill using the model for the MassHealth prescription drug cost containment policy and applying it to the private market. The Senate has passed a similar bill that also includes additional provisions like the licensing of PBMs (pharmaceutical benefit managers). We expect in the first quarter of 2020 that the House will also release legislative proposals on prescription drug costs.

Our coalition will start going through the process of examining all the different provisions and working with the different legislative chambers and the governor’s office to get something across the finish line. It’s our job to align as much support as we can, so we’ll be working to ensure that lawmakers understand why this is so important to their constituents.

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Arnold Ventures

Federal legislation has been hindered in part by intense lobbying by powerful interest groups. How has Massachusetts avoided the same fate so far?

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Amy Rosenthal

The pharmaceutical industry has been a really strong player here, too. In fact, one of our local news stations reported that pharma spent $1.3 million lobbying against the MassHealth provision that we worked to get passed last summer. We’re pretty proud of the fact that we were able to get it passed anyway and that we’re already saving the state money.

Pharma may be armed with money and connections, but we’re armed with individuals who are deeply passionate that everybody in the Commonwealth has access to the drugs they need — because we know prescription drugs only work if people can afford to use them. We are armed with really passionate organizations putting in the leg work and the hard work to make sure that the people we represent are being heard. We are armed with a lot of smart, thoughtful people and influential partners who can help explain the impact of drug pricing on individuals. And we are armed with public opinion. More than 84 percent of voters say they want to see action not just on price transparency, but price accountability.

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Arnold Ventures

You are obviously very passionate about this work. What drives you to advocate for drug pricing reform?

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Amy Rosenthal

I’m the wife and daughter of pediatricians, and I’ve spent my entire life seeing the challenges families face because of health care costs and how painful that can be. I’m really proud to be working to make sure that everybody benefits from the amazing health care in our country and our state. In fact, I spent over a decade working at a sister organization where I traveled back and forth to D.C. at least one day every week helping to draft and pass and refine the ACA. I got to see firsthand how policy change can happen. The law is not perfect; there was a lot of blood, sweat, and tears and a lot of time away from my children, but being able to provide 20 million people with health care insurance is a highlight of my career. And I look forward to continuing to advocate for better, more affordable access to health care for people across Massachusetts.