New Drug Report Supports Sen. Lewis’s Proposal for Pricing Reform

A release from State Senator Jason Lewis:

BOSTON, MA – While many Americans struggle to afford their prescription drugs, a new
survey of retail prices of commonly-prescribed medications found patients can save hundreds,
even thousands of dollars in some cases by shopping around at pharmacies within their
communities.

MASSPIRG, Health Care For All, Senator Jason Lewis and Representative Christine Barber and
others called for prescription drug pricing reform as MASSPIRG released their report, The Real
Price of Medications: A Survey of Pharmaceutical Prices, revealing a wide variation in the retail
pricing of prescription drugs by pharmacies large and small, urban and rural.

The report found that on average the median or typical prices for the drugs surveyed was almost
9 times higher than the lowest price found for the same medicines. In Massachusetts, for the
medication esomeprazole, a generic drug to treat gastro reflux, the typical price was 1,400%
higher than the lowest price.

“This is an awful deal: our medications don’t work any better when we pay more for them,” said Deirdre Cummings, legislative director for MASSPIRG.

Nearly 1 in 4 Americans struggle to afford their prescription drugs primarily because of high
prices. In Massachusetts, drug spending is the second highest category of spending growth in our
health care system.

Senator Jason Lewis and Representative Christine Barber outlined their new bill, cosponsored by
56 lawmakers, An Act to Ensure Prescription Drug Cost Transparency and Affordability Act
(H1133/ S706) to protect consumers and rein in runaway drug prices.

“Out-of-control pharmaceutical costs are not only a major driver of increased insurance
premiums, but also a threat to the quality and affordability of healthcare for economically-
vulnerable people across Massachusetts, like senior citizens and low-income families,” said
Lewis, the Senate sponsor of the bill. “This legislation is a vital first step towards improving transparency and controlling drug costs.”

The legislation uses a number of strategies that include providing transparency around the
underlying costs to produce prescription drugs; restraining abuses of pharmacy benefit managers
(PBMs); authorizing the Health Policy Commission to set upper payment limits for unreasonably high-priced drugs; requiring pharmacists to inform consumers if purchasing a drug at the retail price would be cheaper than using health insurance; providing tools to strengthen MassHealth’s ability to negotiate lower drug prices; and permanently authorizing and funding “academic detailing,” an evidence-based prescriber education program.

“The concept of shared responsibility has been fundamentally important to the health care success story in Massachusetts. Hospitals, insurers, businesses, providers, and consumers have all made meaningful sacrifices to ensure the people of the Commonwealth have the coverage they need and that we work to bring down costs. Each of these entities has put some real skin in the game, but the pharmaceutical industry has not. It is time that they step up and be part of the solution,” said Amy Rosenthal, executive director of Health Care For All.

U.S. PIRG Education Fund surveyed more than 250 pharmacies in 11 states, including
Massachusetts, for cash prices on 12 common drugs. Researchers found that consumers face a
dizzying array of price differences:

● Patients could save from $102 - $5,400 a year between minimum and median prices of
the selected medications by shopping around.
● Prescription drug price variation appeared disconnected from where the medicines were
sold in urban and rural locations across many states; the median price for the surveyed
brand and generic drugs varied an average of 892 percent from the cheapest available
price.
● Switching from brand name drugs to generic alternatives can help save money. For
example, switching from the brand acid reflux medication Nexium to its generic could
save a patient an estimated $756 annually.
● Brand name drugs did not adjust to competition from generic drugs, even years after they
entered the market. For instance, patients who switch from branded Lipitor to its generic
could save an estimated $3,927 annually.
● Large chain pharmacies tend to have higher prices than their small chain or independent
counterparts, despite having more leverage in the marketplace. Eight of the 12 drugs in
the survey had higher median prices of 8.8 percent to 840 percent at large chains
compared to small or independent pharmacies.
● In Massachusetts, the survey found that Atorvastatin (the generic of Lipitor, a blood
pressure medication) had a price variation of 1100% from the typical price to the lowest.
In this case, shopping around for the lowest price could save patients $1200/year.