Senators to Trump: Hold pharma’s feet to the fire on drug prices | SPECIAL IN DEPTH COVERAGE
(Ed Silverman, STAT) Frustrated by White House efforts to tackle rising drug prices, a pair of U.S. lawmakers is urging the Trump administration to more squarely focus on drug makers – by backing legislation requiring them to justify their pricing and provide a breakdown of expenses before raising prices on some medicines.
In a letter to be sent on Monday to President Trump, U.S. Senators Tammy Baldwin (D-Wis.) and John McCain (R-Ariz.) urge him to “make good on your promise” to fix a problem that is vexing an increasing number of Americans.
They call on Trump to back the Fair Accountability and Innovative Research Drug Pricing Act, which they introduced last May.
An identical bill was also introduced in the House, but both have languished.
The bill would require drug makers to notify the Department of Health and Human Services and submit a report 30 days before they increase the price of certain drugs costing at least $100 by more than 10 percent in one year, or 25 percent over three years.
Require Big Pharma to justify price increases
The reports would also need to cite manufacturing, R&D, and marketing costs, as well as net profits associated with the drugs.
The legislation would not prohibit companies from increasing prices, but the bill is supposed to give taxpayers notice of price increases and give “basic transparency” to the market for prescription drugs, the letter says.
Different types of transparency bills have been introduced around the country and have become law in Vermont, California, and Nevada, although those efforts focus on certain price hikes that already occurred.
The senators’ letter follows a report issued last Friday by the White House Council of Economic Advisers that offered various recommendations to lower prescription drug costs.
7-step strategy to ratchet down drug prices
The effort takes aim at several targets at once: Medicaid, Medicare Part D and Part B, pharmacy benefit managers, the Food and Drug Administration, and foreign governments.
Among the suggestions:
- fast-track the FDA review process for some brand-name drugs;
- find ways to force other countries to pay more for medicines;
- decrease concentration in the Pharmacy Benefit Manager (PBM) market;
- revise rules for setting Medicaid rebates;
- alter a drug discount program for certain hospitals;
- move some drugs to Medicare Part D from Part B;
- and rework physician reimbursement for Medicare Part B drugs, which typically are more expensive treatments.
To what extent any of these proposals gain traction remains to be seen. By and large, these have been floated before and each is likely to engender significant debate.
Missing from the report, however, were suggestions that specifically required the pharmaceutical industry to alter its practices.
Some consumer groups, in fact, criticized the report as mimicking the industry playbook.
“Byzantine process used to set prices”
“The administration is foregoing the most effective and obvious prescription cost reforms in order to serve Big Pharma,” said Peter Maybarduk, who heads Public Citizen’s Access to Medicines Program.
“The problem with the Trump proposal is that it refuses to take measures to curtail pharma’s pricing abuses and refuses to take on the monopolies that undergird the industry’s marketing power.”
“The proposals for U.S. pricing measures were notable for both the lack of ambition and details on implementation,” said Jamie Love of Knowledge Ecology International, a group that tracks patents and access to medicine issues.
“The best thing that can be said about the report is that after more than a year, we finally have something in writing about drug prices from the Trump administration, and now it’s clear that the administration has been extensively managed by big pharma to avoid measures that would fundamentally change prices on new drugs in the United States.”
By itself, transparency is unlikely to curb the problem of high or rising costs for prescription medicines, but the notion, of course, is designed to make it possible for lawmakers, policymakers, and the public to better understand the byzantine process that is used to set prices.
A key piece of this puzzle is better understanding of pricing and rebates in which both drug makers and PBMs are engaged.
“Drug companies are making lifesaving treatments unaffordable and are forcing families, seniors, taxpayers and our health care system to continue to foot the bill for these price increases with no systematic transparency,” the senators write.
“It is clear that the market is broken. We have offered a simple bipartisan solution that holds the pharmaceutical industry accountable and institutes basic transparency.” Displayed with permission from STAT. Featured image: Donald Trump, Gage Skidmore, CC BY-SA 2.0
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