Experts Tell Congress How To Cut Drug Prices

Kaiser Health News, December 12, 2017

Tuesday's Senate hearing, the third in a series, comes as Americans across the political spectrum say lowering the price of prescription drugs is a top priority.

This article first appeared December 12, 2017 on Kaiser Health News.

By Sarah Jane Tribble

(iStock via Getty Images)

The nation’s most influential science advisory group will tell Congress today that the U.S. pharmaceutical market is not sustainable and needs to change.

“Drugs that are not affordable are of little value and drugs that do not exist are of no value,” said Norman Augustine, chair of the National Academies of Sciences, Engineering and Medicine’s committee on drug pricing and former CEO of Lockheed Martin Corp.

The report, “Making Medicines Affordable: A National Imperative,” identifies eight steps to cut drug prices. It also provides a list of specific “implementation actions” for various federal agencies, including Congress, the Federal Trade Commission and the U.S. Departments of Justice and Health and Human Services.

Today’s hearing, which is the third in a series by the Senate Health, Education, Labor and Pensions committee, comes as Americans across the political spectrum say lowering the price of prescription drugs is a top priority. Yet, while individual states have passed laws for more transparency and price controls and President Donald Trump has publicly called for lower drug prices, Congress has stalled.

So, will the committee’s recommendations spur action? Kaiser Health News takes the political temperature, talks to experts and rates their chances:


Recommendation No. 1: Allow the federal government to negotiate drug prices

Current law prohibits the U.S. Health and Human Services Secretary from directly negotiating drug prices and the committee says that’s ridiculous.

The committee recommends Medicare and other agencies negotiate which drugs are placed on a list of covered drugs and, when necessary, exclude some drugs. This is not a new idea.

Some states are already restricting high-priced drugs in Medicaid, the state-federal insurance program for low-income Americans. But federal efforts to change Medicare are more complicated.

Just two months ago, top House Democrats introduced another Medicare negotiation bill. But don’t hold your breath, Trump hasn’t responded to multiple letters sent from Rep. Elijah Cummings (D-Md.) — including one after the most recent bill was introduced in late October. That bill hasn’t moved past the health subcommittee.


Recommendation No. 2: Speed approvals of safe and effective generics and biosimilars

This recommendation has a strong ally at the Food and Drug Administration.

Commissioner Scott Gottlieb announced a “drug competition action plan” in June and followed it up two months ago with a new set of policies aimed at speeding the drug approval process for complex generics. More changes are expected too, as Gottlieb wrote in his blog post “if consumers are priced out of the drugs they need, that’s a public health concern that FDA should address.”

But the pharmaceutical world knows which games to play to keep competition at bay. The committee specifically recommends the U.S. Department of Justice and the Federal Trade Commission should watch for anti-competitive tactics, such as pay-for-delay and extending exclusivity protections. The U.S. Supreme Court weighed in on pay-for-delay, saying settlements between brand-name drug makers and generic rivals warranted antitrust review, The total number of these deals has fallen in recent years.

To further encourage generic approvals, Congress could include several proposed bills, such as the so-called CREATES Act, in a final year-end package, said Chip Davis, president of the generics and biosimilars lobby Association for Accessible Medicines.

“People are starting to pay more attention” to anticompetitive patent tactics, Davis said.

Kaiser Health News

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

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