Connecticut’s Democratic governor and Massachusetts’s Republican governor have collaborated on legislation they say would reduce the cost of prescription drugs for their residents.
Massachusetts Governor Charlie Baker is the architect of the legislation. He said it would impose a penalty on drug manufacturers if their year-to-year prescription drug price increases are higher than the increase in the federal consumer price index plus 2%.
“This would obviously help people plan from one year to the next. It would also help in the growth of drug prices to a more affordable level,’’ Baker said.
Connecticut Governor Ned Lamont says this should not discourage pharmaceutical companies from spending money on research and development.
“A lot of these drugs have been out there on the market for 10, 20 plus years. They paid for that investment many times over. There’s no need for them to have more than a rate of inflation and a couple of percent above that to continue to have a decent rate of return,” Lamont said.
The bill has already won the approval of a key legislative committee in Connecticut. In Massachusetts, it’s part of the governor’s budget proposal that awaits action in the Legislature.
Victoria Veltri is the head of Connecticut’s Office of Health Strategy. She said the bill is focused on discouraging dramatic increases in drug prices like what happened with EpiPen.
“What's the rationale behind a drug like that that's been around forever and serves a really important need to be going up at prices that exceed inflation year after year?" Veltri said.
The bill would impose a penalty on drug manufacturers if their year-to-year prescription drug price increases are higher than two percent above the increase in the federal consumer price index.