Editor's note: This is the third part of a series examining the U.S. drug pricing market and remedies Congress is exploring.
In a race against time, Congress is determined to do something this year to counter the gravitational forces at work in the U.S. prescription drug market.
Leaders from both parties and in both the House and the Senate have vowed to heed their constituents' call to do something about high drug prices – before the nation is thrust into the abyss of the 2020 presidential election season. "There is a lot of heavy lifting to do in the days ahead," Sen. Ron Wyden (D-Ore.) said at a recent Senate Finance Committee hearing on drug prices, as he noted the urgency to get something done while bipartisanship is still possible. (See BioWorld, April 10, 2019.)
The black hole of drug pricing that has many patients unable to afford essential medications is sure to be as much of a campaign issue in 2020 as it was in 2016 and 2018. And even though lawmakers say they're willing to work together to fix the problem this year, they're still going to be looking for campaign talking points that will help their party in the coming election.
Dozens of drug pricing bills already have been introduced in the 116th Congress, and more hearings are in the works. The next hearing is set for Tuesday before the House Energy and Commerce Subcommittee on Health. It will look at paying for prescription drugs in Medicare Parts B and D.
So far, the hearings have been pretty much bipartisan in tone, as is a lot of the legislation being considered in House and Senate committees. The bills that are in the orbit of market-based solutions have the most bipartisan support. They seek to lower prices by increasing competition through improving transparency and ending the shenanigans used to delay generics and biosimilars. While some bills would halt the shenanigans, others would penalize companies that indulge in them. (See Pending drug price/competition legislation, below.)
Market solutions vs. intervention
A few of the bills that would expand competition by allowing imports from Canada and other approved countries also have some support from both sides of the political divide. And legislation that would help Medicare patients by capping out-of-pocket costs or forcing payers to pass rebates to the point of sale are attracting bipartisan support. But the space between the Democrats and Republicans begins to widen on bills that call for direct government intervention in the drug market, be it through price negotiations or prices capped by what other industrial countries are paying.
Support for the Prescription Drug Price Relief Act, S. 102, shows that divide. Sponsored by Sen. Bernie Sanders (I-Vt.), who's taking a second shot at the presidency in 2020, the bill would require the Department of Health and Human Services (HHS) to review, at least annually, all brand drugs for excessive pricing. If a drug is found to be excessively priced, HHS would have to void any government-granted exclusivity it enjoys; issue open, nonexclusive licenses for the drug; and expedite the review of generic or biosimilar applications referencing the product.
So what's an excessive price? The bill defines it as an average manufacturing price that exceeds the median price for the drug in Canada, France, Germany, Japan and the U.K. If pricing information is not available in at least three of those countries, the U.S. price still would be considered excessive if it were "higher than reasonable in light of specified factors, including cost, revenue and the size of the affected patient population," according to the bill summary.
To date, the Prescription Drug Price Relief Act has five Democratic co-sponsors. As a comparison, the Senate version of the CREATES Act, S. 340, which would establish a process to ensure would-be competitors access to the reference drug samples necessary for the development of generics and biosimilars, has nearly one-third of the Senate, including an almost equal number of Republicans and Democrats, as co-sponsors. The House version of the CREATES Act, H.R. 965, is headed for a floor vote with nearly 40 co-sponsors, again from both political parties.
The takeaway is that the most likely solutions to get through Congress this year will be ones aimed at increasing competition or helping Medicare beneficiaries with copays rather than those that disrupt the market. But will that be enough to make prescription drugs more affordable?
"It's like American families have bags of rocks on their backs and prescription drugs are just another bag of rocks that gets thrown at them," Sen. Robert Casey (D-Pa.) said at the Finance Committee hearing. "A lot of people are just face down on the pavement with these costs."
Rep. Paul Tonko (D-N.Y.) expressed a similar sentiment at a recent House subcommittee hearing on insulin prices. "We need to approach this issue with empathy and compassion," he said, adding that "the system as it exists now is horrendously broken" as it dangles life-saving drugs just out of patients' reach. (See BioWorld, April 11, 2019.)
The problem is that "the system didn't get this way overnight," Ronald Lanton, senior counsel at health care law firm Frier Levitt, told BioWorld. "When you throw politics into it, too, it makes it worse," he added. Thus, there is no silver bullet for what is a complex problem that grew out of a long history of unintended consequences.
Solutions such as passing drug rebates on to patients, capping Medicare copays, doing away with copays for drugs like insulin and increasing transparency throughout the drug distribution chain don't guarantee lower prices. They merely shift the cost of drugs around.
"Somebody's going to get hurt . . . meaning somebody's going to pay more," Lanton said. For instance, requiring drug rebates to be passed to patients in the Medicare Part D program would mean other Medicare beneficiaries would see higher premiums. Capping copays also could lead to higher premiums, or a bigger tab for taxpayers.
Given all the focus on drug prices, Lanton said he expects some shift in how the U.S. pays for prescription drugs, but that doesn't mean the cost will go down, he said.