New laws cap prescription drug copays at $25, improve access to primary care and close regulatory gaps exploited by Steward Health Care

Boston - Governor Maura Healey today signed into law S.3012 An Act relative to pharmaceutical access, costs, and transparency and H.5159 An Act enhancing the market review process. The laws seek to lower health care costs, cap prescription drug costs at $25, improve access to primary care and increase oversight of the health care industry to protect patients and providers.

“We know that one of the biggest strains on Massachusetts family's budgets is the high health care costs. These new laws will lower out-of-pocket costs by capping copays at $25 for lifesaving prescription medications and increasing transparency in the industry,” said Governor Maura Healey. “They also close loopholes in our regulatory processes so that for-profit providers like Steward Health Care are subject to the same transparency rules as non-profit providers. As Attorney General, I spent years in court trying to hold Steward to this standard, and I’m glad that our laws will no longer be exploited in this way. I’m grateful for the strong leadership of Speaker Ron Mariano, Senate President Karen Spilka, and the Legislature for advancing these bills that will strengthen our health care system, lower costs, and protect patients and providers.”

“Massachusetts is proud to be a global leader in health care and life sciences innovation. Together, these laws further increase our ability to deliver world-class medical care that patients can afford and empower government to hold the health care industry accountable to the people,” said Lieutenant Governor Kim Driscoll. “We appreciate the partnership of the Legislature, as well as all of the health care leaders, providers and patients who made their voices heard throughout this process.”

“The bills signed by Governor Healey today represent the Legislature’s enduring commitment to protecting patients, bringing down cost growth, and to fostering greater stability and accountability within the health care system,” said House Speaker Ronald J. Mariano (D-Quincy). “Before Steward Health Care ultimately collapsed, executives spent years hiding their financial information from state regulators, putting patients and our health care system at risk. That’s why ensuring that our institutions are equipped to monitor the health care landscape, and to guard against trends and transactions that drive up costs without improving patient outcomes, is so important. I would like to thank Chairman Lawn and our partners in the Senate for getting these bills across the finish line and marking the end of an incredibly productive legislative session.”

"Because of our actions today, thousands of residents will pay less at the pharmacy counter, and communities across the state will be more protected from the high costs of private equity mismanagement," said Senate President Karen E. Spilka (D-Ashland). "With the Governor's signature on these two bills, we are doubling down on our global leadership in health care and making sure that in Massachusetts, patients are put before profits. I am grateful for Governor Healey's signature, the tireless and unwavering work of Senator Friedman, my colleagues in the Senate, and our partners in the House for getting these bills across the finish line."

An Act relative to pharmaceutical access, costs and transparency includes comprehensive reforms to lower the cost of prescription drugs and improve oversight of the pharmaceutical industry. Notably, it requires insurers to eliminate cost-sharing requirements for one generic drug and to cap co-payments on one brand-name drug at $25 per 30-day supply for diabetes, asthma, and certain heart conditions. It also ensures that consumers are not charged a co-pay if it would be cheaper for them to purchase a drug without using their insurance, and it requires insurers to provide continuity of coverage for new members' existing prescriptions when they switch to a new plan.

An Act enhancing the market review process seeks to close loopholes in the health care market regulatory process. It expands the scope of data collection and public review of health care and health care transactions by the Health Policy Commission (HPC) and the Center for Health Analysis and Information (CHIA), with the goal of increasing visibility and accountability for transactions involving private owners of health care resources. This will help to close gaps in oversight that were exploited for years by Steward Health Care and Ralph de la Torre. For example, it prohibits DPH from issuing hospital licenses to hospitals or systems where the main acute care campus is on Real Estate Investment Trust (REIT)-owned property. It also seeks to increase transparency around health care entities and their ownership, including more rigorous data sharing requirements and expanding participation in regulatory process to nontraditional healthcare entities. ?

The bill also includes a provision establishing a primary care task force, co-chaired by Health and Human Services Secretary Kate Walsh and the Executive Director of the HPC. The task force will study primary care access, delivery and payment, and develop recommendations to stabilize and strengthen the primary care system, increase recruitment, and increase financial investment and patient access.

“These laws are an important step toward transparency and accountability for our health care system, and making medications more affordable,” said Health and Human Services Secretary Kate Walsh. “We know primary care access is a critical component of health equity, so I’m especially looking forward to the commitment of strengthening our primary care system to help more people in Massachusetts live healthy lives.”

“Skyrocketing costs of prescription drugs and pervasive practices by private equity interests in health care have created an untenable situation for Massachusetts residents seeking care," said Senator Cindy F. Friedman (D-Arlington), Senate Chair of the Joint Committee on Health Care Financing. "I am hopeful that with Governor Healey’s signature on these two important pieces of legislation, our Commonwealth will gain more tools and a better understanding of these industries as we continue our work to ensure that patients come before profits and our residents receive high-quality care that is accessible and affordable, whenever they need it. I thank all of my legislative colleagues and the stakeholders who partnered with us to get these bills to the Governor’s desk.”  

“What Ralph De La Torre and Steward did to our residents was unconscionable and reprehensible, however, it was legal. Following the Steward Health Care crisis, it is the Legislature’s responsibility to ensure that what happened with Steward never happens again in the Commonwealth,” said Representative John J. Lawn, Jr. (D-Watertown). “That means closing loopholes in our regulatory process that Steward exploited for years and shining a light on the blind spots that allowed Steward to exploit Massachusetts patients for profit. Under the leadership of Speaker Mariano, the House remains committed to fighting to protect patients, preserve community hospitals, and increase access to high-quality, affordable health care in the right setting.”

“These new laws put patients and working families over corporate profits,” said Senator John J. Cronin (D-Fitchburg). “These measures take critical steps to limit out-of-pocket costs for residents and hold pharmacy benefit managers and private equity firms accountable. I’m grateful to Governor Healey for her leadership on these issues.”

“As someone who represents communities within the Merrimack Valley that were impacted by Steward’s closure, I am grateful that this historic legislation was passed by the Legislature. These two critical pieces of legislation will positively impact every resident in Massachusetts by making life-saving and essential prescription drugs more affordable for all residents, while also working to ensure that another Steward Health Care situation is never allowed to happen again in Massachusetts,” said Second Assistant Majority Leader Frank A. Moran (D-Lawrence). “I would like to thank Governor Healey, Lieutenant Governor Driscoll, Speaker Mariano, Senate President Spilka, House Chair Lawn, and Senate Chair Friedman for their steadfast leadership in making this legislation a priority this session.”

“The crisis and long-term impacts to the health care system that Steward Health Care caused through financial greed and negligence has led to the important reforms in this legislation that will strengthen oversight of the Commonwealth’s health care system, helping to prevent future crises and ensure Massachusetts residents have access to high-quality care,” stated Representative Hannah Kane (R-Shrewsbury). “I am pleased to see the Governor sign this significant legislation into law today.”

“I look forward to implementing these new laws that will help advance important transparency and affordability safeguards at the Division of Insurance for Massachusetts consumers,” said Commissioner of Insurance Michael Caljouw.

Statements of Support:

Amy Rosenthal, Executive Director, Health Care For All:

"Health Care For All is deeply appreciative to see these critical health care bills become law. They are important first steps in helping people with asthma, heart disease, and diabetes better afford their medicines, addressing the risks of health equity in the health care space, and safeguarding our health care system from changes in ownership that could harm consumers. We are grateful to the legislature and the Healey-Driscoll administration for their leadership in ensuring residents of Massachusetts are better able to afford the health care they deserve."

Lora Pellegrini, President and CEO, Massachusetts Association of Health Plans (MAHP):

“The Massachusetts Association of Health Plans (MAHP) congratulates Governor Healey, Speaker Mariano, Senate President Spilka, Senator Friedman, and Representative Lawn on the signing of these important health care laws. These measures strengthen the framework for health care market accountability by bringing previously unregulated market participants, like the pharmaceutical industry, private equity companies and pharmacy benefit managers under state oversight and enhancing coordination among agencies like the Center for Health Information and Analysis, the Health Policy Commission, the Office of the Attorney General, and the Department of Public Health. We are particularly pleased with the enhanced authority granted to these agencies as it relates to the Determination of Need and Material Change Notice processes, which will improve oversight of transactions in our marketplace that can often translate into greater market leverage for providers and higher costs for employers and consumers.”