Hospitals, Insurers, Seniors Demand Action to Lower Prescription-Drug Costs
Source: The Washington Post
A broad coalition including health-care providers, insurers and seniors will propose major changes Monday designed to rein in prescription-drug costs, including a shorter exclusivity period for biotech medications and a requirement that manufacturers disclose more information about pricing.
The Campaign for Sustainable Rx Pricing, whose members include AARP, Walmart and several health plans, is trying to stoke interest in the fall elections with an eye toward winning policy changes in 2017. Many of the proposals would require congressional or administrative action and have little chance this year.
“We have worked pretty hard to raise this at the presidential campaign level, and each of the candidates has acknowledged this is an issue,” said John Rother, president and chief executive of the National Coalition on Health Care and head of the drug-pricing coalition. “We are now going to expand our efforts to other races.”
To promote competition, the coalition is calling for a reduction in the 12-year exclusivity period for biological drugs and is pressing for more resources for the Food and Drug Administration to allow quicker processing of generic-drug applications. Currently, the agency faces a backlog of thousands of such applications.
Rother described the initiatives as “market-based” and said they would lead to “a functioning market that would better balance innovation with affordability.”
In some ways, the proposals are fairly cautious, reflecting reluctance by some members of the coalition to push for more-aggressive government intervention.
For example, the group does not call for giving Medicare the authority to negotiate prices with pharmaceutical companies — an idea that has been endorsed by Hillary Clinton, Bernie Sanders and Donald Trump but is staunchly opposed by Republicans in Congress. Rother said some members of the group saw that as government price setting.
“We aren’t talking about price controls; we are talking about something quite different, shining a light on processes and speeding things up,” said Chip Kahn, president of the Federation of American Hospitals, which is part of the coalition.
But Lori Reilly, executive vice president for policy and research at the Pharmaceutical Research and Manufacturers of America, the drug industry’s main trade group, sharply disagreed.
She said the coalition’s ideas were neither market based nor consumer friendly and would result in new government requirements that would themselves increase costs.
Moreover, she said, the proposals were an attempt by the insurance industry “to try to deflect the conversation about a lot of things going on in the marketplace.” She pointed to studies showing that some health plans have been increasing out-of-pocket costs for consumers and have placed expensive drugs for serious or chronic illnesses, such as HIV, on “tiers” requiring the highest level of cost sharing. She added that drug-price increases slowed in 2015 after rising more rapidly in 2014.
Bob Laszewski, a health-care consultant, expressed skepticism that drug prices would have legs as a political issue.
He said only a small proportion of voters is being affected because Medicare and private insurers are paying most drug claims.
“It’s not a consumer issue yet, so it’s not a political issue yet,” he said. In the meantime, he said, drug companies are coming up with breakthrough medications, especially for cancer, and “insurers should just pay for it and stop whining.”
Larry Levitt, senior vice president at the Kaiser Family Foundation, disputed the view that few consumers are affected by high drug prices.
He said that while drug prices probably won’t become a “top-tier” campaign issue, the topic resonates with many voters. And partly because of highly publicized price increases for some older products, he said, drug companies “are more vulnerable than they have been in a while.”
On the presidential campaign trail, Clinton and Sanders have issued detailed position papers on how they would rein in drug costs.
Besides allowing Medicare to negotiate over drug prices, they back permitting Americans to re-import drugs from other countries, where they are often much cheaper.
In addition, Clinton, in a proposal disliked by insurers, would cap out-of-pocket drug costs at $250 a month for people with chronic or serious health problems.
Ted Cruz, meanwhile, has said he wants to make significant changes in the FDA drug approval process. John Kasich has said he wants to take a close look at who is actually footing the bill — the taxpayers or the drug companies — for research and development involving pharmaceuticals.
The coalition issuing the proposals on Monday also would require manufacturers to disclose how much they spend on research and development, and how much is paid for by other entities, such as the National Institutes of Health.
The group also would require drug companies to release details about their products’ estimated prices and the impact on federal spending before the FDA gives final approval.