FOR IMMEDIATE RELEASE:
01/21/2026
BOSTON, MA – With healthcare costs now among the top reasons why families are leaving Massachusetts, a new Pioneer Institute report calls for the Commonwealth to focus on affordability and access and, specifically, for the state to enforce existing transparency laws, rein in hospital consolidation, reform pharmacy benefit managers, expand transparency as to how the federal 340B drug discount program is being used, and refocus the state’s life science spending on workforce training, and oppose federal price controls that punish innovation.
“Healthcare costs are no longer just a medical issue—they are a cost-of-living crisis,” said Pioneer Executive Director Jim Stergios. “A system meant to heal has instead become a driver of economic flight. These reforms would restore transparency, competition, and accountability while protecting patient access and innovation.”
The report outlines a series of practical reforms designed to empower patients, increase competition, and preserve Massachusetts’ position as a global leader in medical innovation—while avoiding blunt federal price controls that threaten research, access, and long-term affordability.
Market Power and Transparency
Massachusetts providers – especially large hospital systems – continue to resist meaningful compliance with state and federal price transparency laws. Pioneer recommends establishing a Healthcare Transparency Task Force to monitor and enforce existing requirements, ensuring patients can access clear, comparable pricing information.
The report also urges greater outreach to employers and insurers to promote cost estimator tools, along with incentives such as rebates for choosing high-value, lower-cost options, and a public education campaign to normalize shopping for healthcare.
Hospital consolidation has further distorted prices. Large systems, including those operating under the Mass General Brigham and Beth Israel Lahey umbrellas, have used mergers and acquisitions to achieve outsized market power. As a result, prices for routine services—such as imaging, childbirth, or joint replacements– can vary two- or three-fold within the same region, with no corresponding difference in quality or outcomes. Pioneer recommends empowering the Health Policy Commission and the Center for Health Information Analysis to review and condition market consolidation based on clear, data-driven criteria to prevent anti-competitive outcomes.
Life Sciences
The report calls on the Massachusetts Life Sciences Center to sunset programs generating limited returns—such as certain clinical R&D grants, equity investments, funds and DEI-focused initiatives. Instead, the center should redirect resources toward workforce and education pipelines that Massachusetts residents for careers in the life sciences.
Pioneer also highlights systemic flaws in the federal 340B drug discount program. While intended to support care for vulnerable populations, the program doesn’t prohibit hospitals from reselling deeply discounted drugs at full price. The Institute’s research shows that 18 of 29 Massachusetts hospital systems significantly underperformed the national average for charity care as a share of operating expenses, even as 340B revenues surged. The report recommends requiring annual disclosure of all 340B revenues and expenditures to the state Department of Revenue.
Pharmacy benefit managers (PBMs) represent another major cost driver. Paid based on a percentage of a drug’s list price, PBMs have strong incentives to favor higher-cost medications. This has contributed to inflated prices, reduced access, and an estimated $1.4 billion in spread-pricing revenues. Pioneer is calling for major reforms to make prescription drugs more affordable, including stopping hidden markups, removing financial incentives that drive up drug prices, ending practices that block patients from using assistance programs, and making sure any savings go directly to patients at the pharmacy counter.
Finally, the report urges state leaders to oppose federal price controls such as those in the Inflation Reduction Act and “Most Favored Nation” proposal that reduce biopharmaceutical revenues by up to 40 percent and have already raised patient out-of-pocket spending by 32 percent.
“Massachusetts’ life science sector was once a model for how research and entrepreneurship can drive economic growth,” said Dr. William S. Smith, senior fellow and director of Pioneer’s Life Sciences Initiative. “Today, it is being undermined by hostile federal policies and local complacency. Without a coherent strategy, the Commonwealth risks losing its position as the world’s leading center of medical discovery.”
“Health: A Vision for Accessible, Innovative Care” is the second chapter to be released from Pioneer Institute’s forthcoming book, Agenda for Leadership: Choosing to Compete. The first chapter, “Fiscal Responsibility: A Vision for Effective, Limited Government,” was released last week. Both chapters are available at https://pioneerinstitute.org/agenda-for-leadership-2026/.
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