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Azar Asks Congress, Pharma to Do More to Cut Drug Prices

Analysis  |  By MedPage Today  
   August 21, 2018

Remarks came during a call that the agency convened to mark 100 days since President Trump released his plan to lower prescription drug costs for patients.

This article first appeared August 20, 2018 on Medpage Today.

By Joyce Frieden

WASHINGTON -- Congress and drugmakers should be doing more to lower the cost of prescription drugs, Health and Human Services (HHS) Secretary Alex Azar said Monday on a conference call with reporters.

"The industry and Congress can and should take specific action in the months to come," said Azar. For example, "The industry could move further to a fixed price discount system at the point of sale. There's nothing stopping them. There's nothing stopping pharmacy benefit managers [PBMs] from changing the contracts they have with their plans or their employers to enable discount pricing or to move to net pricing regimes and away from guaranteed rebate structures that lock in existing incentives toward ever higher list prices."

"The pharmaceutical industry can and should voluntarily begin disclosing the cost of their drugs in direct-to-consumer advertising," he continued. "Congress can and should act to preclude 'gag clauses' in private insurance as well as Medicare." Azar was referring to contract clauses that prohibit pharmacists from letting customers know when it would be cheaper to pay for a drug out-of-pocket than to go through their insurance.

"Congress can and should repeal the Obamacare giveaway to pharma by limiting the rebates in the Medicaid program for those actors who increase list prices faster than the rate of inflation, and Congress can and should act to get rid of the abuse of the 180-day generic exclusivity window currently being abused by generic and branded pharmaceutical companies to delay entry of competitive generic products," he added.

Azar's remarks came during a call that the agency convened to mark 100 days since President Trump released his plan to lower prescription drug costs for patients. "We have taken a significant amount of action in these 100 days, but this is just the beginning of a fundamental transformation," he said.

Azar cited actions the administration had taken in this area, including accelerating generic drug approvals, launching a work-group to consider ways to safely import certain sole-source branded drugs, launching a biosimilars action program, and publicizing companies who had used the FDA's Risk Evaluation and Mitigation Strategy (REMS) program to deny access to generic companies requesting samples of brand-name drugs for the purpose of developing generic versions.

He also lauded drugmakers for their actions so far. "Fifteen companies have made significant announcements on drug prices by either reducing prices ... or freezing prices at least," he said. "And a new analysis from the [HHS] Assistant Secretary for Planning and Evaluation finds that there have been 60% fewer brand-name price increases than the same period in 2017, and 54% more brand-name and generic price decreases."

However, some media outlets have reported that the drug companies' announcements were "largely symbolic" and would not greatly affect the companies' bottom lines. "Of the few companies that actually cut prices, for instance, most targeted old products that no longer produce much revenue -- such as Merck's 60% discount to a hepatitis C medicine that had no U.S. revenues in the first quarter," Politico noted in its story on the topic. "Others volunteered to halt price increases for 6 months -- in some cases, just weeks after announcing what is normally their last price hike for the year."

When asked by MedPage Today about this, Dan Best, the secretary's senior advisor for drug pricing reform, responded that "Our focus is getting the work done that we laid out in the blueprint; how manufacturers have decided to support or go in this direction -- it's something we're appreciative of. It does have an impact on what consumers would pay, but at the end of the day, the only way we're going to achieve our objective is to deliver on the blueprint as outlined on May 11th."

Congressional Democrats are also talking about the topic -- but in a different light. On Tuesday, Senate Democrats are holding an event featuring patients and their families who have been adversely affected by high prescription drug prices.

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