Rising drug prices are hammering patients, employers, and insurers. Is there any end in sight?

Boston Globe

17-04-2025

As an affordability crisis grows in pricey New England, the rising cost of prescription drugs is squeezing patients, health plans, and employers. President
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Costs could rise further, however, if the Trump administration follows through on the president's
Efforts to contain drug spending have run up against the
'Demand for these drugs is quite dramatic,' said Rena Conti, associate professor at Boston University's Questrom School of Business. 'And I don't anticipate demand is going to fall in the near term.'
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While health insurance covers the largest share of drug prices, Americans' out-of-pocket prescription drug spending averages $177 a year, according to Georgetown University's Health Policy Institute in Washington, D.C. It's much higher — about $456 annually — for those over 65, who also pay for a higher share of their drugs out of pocket.
The growing cost burden has caught the attention of state lawmakers, who passed a bill in the waning days of last year's legislative session that would
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Senator Cindy Friedman, the Senate chair of the Joint Committee on Health Care Financing, described the action as a 'first step.' Her panel is preparing legislation this year that would seek to contain the costs of a broader range of prescription medicines identified by the state Health Policy Commission, potentially including GLP-1s.
'There's a lot more that can be done,' said Friedman, a Democrat from Arlington. 'We can start looking at upper payment limits for the most essential drugs,' setting an effective ceiling on what Massachusetts health plans will pay.
Massachusetts got a wake-up call last month when the state Center for Health Information and Analysis reported that
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Overwhelmed by demand for GLP-1 drugs such as Ozempic, Mounjaro, Wegovy, Zepbound, and Saxenda, used to treat diabetes and obesity, the state's two largest
While there is variation, the average monthly retail price of the new class of obesity medications is about $1,200 without insurance. And the price of branded drugs overall has risen dramatically over the past five years.
State officials have long complained the process of setting drug prices is opaque, involving a chain of actors that includes insurers, drug makers, pharmacies, and middlemen called pharmacy benefit managers, operating through transactions largely invisible to regulators.
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The bill passed in the Massachusetts Legislature last year aims to lift the curtain on drug pricing, creating a dedicated office within the state
'We want to have expert, objective information about where the money's going in this system, where are the opportunities [for savings], and where are the challenges,' said David Seltz, executive director of the Health Policy Commission, which is staffing up the Office of Pharmaceutical Policy and Analysis authorized under the new Massachusetts law.
It remains to be seen whether greater transparency or the selective price caps approved so far will moderate prices more broadly. Prices for prescription medicines in the United States, where most biopharma companies are based, are higher than in any other advanced country.
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The federal government has had mixed success in restraining drug costs. Congress abandoned its longstanding hands-off posture toward drug pricing in 2022, when it empowered the agency that runs Medicare, the largest US health insurer, to negotiate prices with drug makers.
So far, negotiations have covered only 10 of the most expensive medicines — drugs such as Farxiga for chronic kidney disease and Eliquis for preventing strokes and blood clots — and the lower negotiated prices aren't set to take effect until next January.
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Medicare will include some of the most popular weight-loss drugs, including
Trump's executive order aims to expand Medicare drug price negotiations and streamline approval for lower-priced generic drugs and biosimilars. But it would also
Carolyn McGrath's diabetes medication sat on her kitchen table.
Suzanne Kreiter/Globe Staff
Meanwhile, drug makers continue raising their prices. The
Industry officials said the bigger driver of rising prescription drug spending is greater use of medicines such as the GLP-1s by patients whose weight loss could actually save money overall. Such weight loss, they said, results in improved health and less spending for other serious conditions such as strokes or heart attacks.
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Stami Turk, director of state public affairs for the Pharmaceutical Research and Manufacturers of America, a trade group, said reports like that of the Center for Health Information and Analysis in Massachusetts don't tell the whole story when they cite increased drug costs.
She said state officials also need to focus on the value of medicines. 'They need to look at how prescription drugs are being used,' Turk said. 'With the use of GLP-1s, you could save the health system tens of billions of dollars a year' by preventing other diseases.
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State officials, for their part, said they're looking for new ways to assess the value of drugs and wring savings out of the system. Officials at both Mass Health, the state's Medicaid program, and the Group Insurance Commission, the health plan for state employees, have been actively negotiating rebates from drug makers to keep premiums down.
Despite rebates, selective price caps, and other steps, Seltz at the Health Policy Commission sees 'increased pricing on existing drugs and high launch prices on new drugs' continuing to push up health spending in Massachusetts. He cited data from a state report showing the average price of a branded drug has increased 69 percent since 2019.
'When I look at the last couple of years,' he said, 'I see an upward trajectory.'
Patients are grateful for treatments that weren't available to past generations, helping to prolong their lives. As they live longer, however, the cost of drugs becomes more of a burden.
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'It keeps me alive,' McGrath, the community college professor, said of her insulin. 'But the drug companies are profiting from my condition. And there's nothing I can do about it.'
Robert Weisman can be reached at