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MassHealth: high-cost drugs with no competition are driving significant cost increases

MassHealth: high-cost drugs with no competition are driving significant cost increases

FROM THE BEGINNING of the Baker-Polito Administration, managing MassHealth has been a top priority.  We are pleased with the progress made to date, including its first major systems overhaul in 20 years, implementing strong internal controls, and reducing the growth rate from double digit numbers.  However, it is evident that additional major structural reforms are required going forward in order to sustain that momentum. One major cost driver is MassHealth pharmacy spending.  Over the past five years, pharmacy costs have doubled from $1 billion to $2 billion even as enrollment has decreased from 1.91 million to 1.86 million members.

While the pharmaceutical industry cites low national drug cost growth across all insurance, for MassHealth, our reality is that we have experienced a 20 percent increase in per member drug costs since 2015.  High-cost drugs with little or no competition are driving overall MassHealth growth.  We have utilized every tool available under current statutory and federal authorities; this administration’s aggressive rebate negotiations have led to over $320 million in annual rebates by achieving an increase in rebate level from 34 percent to 51 percent over five years.  In fact, Massachusetts was one of the very first states to use competitive procurements...

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