Report adds to debate over prescription drug price disclosures

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BOSTON >> After calls for greater transparency in drug pricing from various sectors of state government, a report out Thursday takes aim at the idea, suggesting required disclosure of pricing methodologies would discourage drug development and lead to higher long-term costs.

The study, conducted by the Pioneer Institute, charges that disclosure mandates would add administrative costs, consequently discouraging development and resulting in "a less attractive marketplace for innovation."

Pioneer's report follows health care cost control recommendations issued earlier this year by the Health Policy Commission, which pegged pharmaceutical spending — based on the introduction of new high-cost drugs, large price increases and some drugs going off-patent — as a major cost driver. Among the commission's 13 recommendations was a call for lawmakers to require greater transparency in drug pricing and manufacturer rebates.

"The topic of reducing healthcare costs is one we must address, and the HPC report provides a valuable analysis of a broad range of critical issues," Pioneer Institute executive director Jim Stergios, who co-authored the study, said in a statement. "But policy prescriptions for legislatively mandated drug cost disclosure deserve closer examination."

The report recommends that policymakers instead promote competition in the prescription drug marketplace and the health care realm overall, including more clinics and urgent care centers.

On Monday, the Joint Committee on Health Care Financing plans to hold a hearing on drug price transparency legislation filed by Sen. Mark Montigny. The New Bedford Democrat's bill (S 1048) would develop a list of "critical" prescription drugs and require their manufacturers to report production, research and development, marketing and advertising costs, as well as various prices charged. The Health Policy Commission would also be able to cap prices on those drugs if it found them too expensive.

Attorney General Maura Healey has also taken action around drug prices. In January, Healey wrote to the maker of Sovaldi, a hepatitis C treatment with a list price of $84,000, asking for reconsideration of a pricing strategy she said may constitute an unfair trade practice. A spokeswoman for Gilead, the manufacturer, said at the time that the company looked forward to working with Healey's office "to address questions and concerns and ensure a mutual understanding of the work we are doing to deliver a cure for HCV to as many patients as possible in Massachusetts and around the world."

The Pioneer report notes that Sovaldi's manufacturer cut the drug's price by 46 percent in February 2015 after the federal approval of another hepatitis C medication, and that many users receive discounts or rebates on Sovaldi. Further price reductions could be possible if another rival drug is approved, according to the report.

"What should be of great interest to policymakers when they consider the HPC's drug price recommendations is that market competition from another drug manufacturer, not government-required disclosures around private company cost structures or price controls, resulted in the 46 percent reduction in the price of Sovaldi," the report said.


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