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Antidote to rising drug prices languishes on the Hill

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The story of gluttonous, unapologetic drug price increases is well known. From doubling the price of EpiPens to a 5,000 percent hike on the price of a life-saving AIDS drug to the anti-competitive tactics of some brand-name drug manufacturers, the stories keep coming.

Two new proposals from the Trump administration are aimed at reversing that trend. The first – the “Know the Lowest Price Act and the Patient Right to Know Drug Prices Act” – is designed to lift the so-called “pharmacy gag clause,” which prevents pharmacists from telling Medicare Part D patients when they could pay less out-of-pocket by not using insurance. The second – announced Monday – would require pharmaceutical companies to announce the list price of their drugs in television commercials.

{mosads}Both efforts should be celebrated. In fact, after years of pontification and promises, these are the first federal actions aimed at drug price inflation.

However, neither strategy will halt egregious price increases or bring down overall health care costs bloated by unsustainable drug prices. Prices for the top 20 most-prescribed brands continue to rise at the rate of 12 percent per year or roughly 10 times higher than the average annual rate of inflation.

There’s more to do. The good news is that much of the heavy lifting has already taken place. One simple, effective tool is sitting right in front of Congress and the White House.

It’s called the CREATES Act of 2018. It’s bipartisan. It’s taking aim at drug prices by restoring true competition to the marketplace. And the Congressional Budget Office scored it as a $3.9 billion money-saver.

The “Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act” – passed by the Senate Judiciary Committee earlier this month – would return some sanity to the patent-protection regulatory process. The FDA recently took a step in the right direction by allowing a generic competitor for EpiPens to enter the market. However, we need to go further. Congress can essentially open up the entire pharmaceutical market – not just the EpiPen market – to competition.

Competition has been stymied by the holders of certain patent-protected drugs, who have gamed the system to lengthen their monopoly beyond the patent’s expiration date and to keep less expensive generic drugs off the market.

When competition is unimpeded, we know that it works to reduce drug prices. For example, now that biosimilar alternatives are available for Janssen’s Remicade – a crucial rheumatoid arthritis medication that had seen price increases of 10 percent annually – costs have decreased by 35 percent. Similarly, when a generic alternative became available for Valeant’s Nitropress – a crucial heart medication that saw a 310 percent price increase (from $215 per vial to $881) last year – costs have come down below $300 for both Nitropress and the generic.

The president put many ideas forward in his “American Patients First” proposal, which he calls a “blueprint to lower drug prices and reduce out-of-pocket costs.” Though the CREATES Act isn’t mentioned by name in the president’s plan, some of the ideas and goals are the same – to increase competition by bringing more generic drugs to market.

To get a generic drug to the local pharmacy, the manufacturer has to show that its generic version of the drug is “bioequivalent” to the brand name drug. This requires the generic company to have access to samples of the brand name drug for comparative studies. And that’s where the “shenanigans” begin, as FDA Commissioner Scott Gottlieb put it.

“(W)e know that certain brand-name manufacturers are abusing the system by blocking access to samples and hiding behind FDA’s rules when they do it,” Health and Human Services Secretary Alex Azar said during the rollout of the president’s plan. “They’re using laws intended to promote the public health to pad their profits instead.”

The CREATES Act would put a stop to that by allowing financial penalties on such abuses. It would allow less-expensive generic drugs to get to market and lower costs overall – for patients, for employers, for insurers and for taxpayers. In September, the Congressional Budget Office released an updated report estimating that the CREATES Act would save $3.9 billion over ten years.

The concept has proven itself in Maine, where the state legislature demonstrated bold leadership in passing its own version of the CREATES Act. The Maine Pharmacy Act requires that a drug distributed in Maine be made available for sale to an FDA-approved generic drug manufacturer who is seeking to develop a cheaper alternative.

Now its Washington’s turn.

The CREATES Act has easily passed the Senate Judiciary Committee, with support from both the right and left. If we really want to put American patients first, let’s pass the act and end anti-competitive pharmaceutical practices that are keeping drugs prices high.

Scott Knoer is Cleveland Clinic’s Chief Pharmacy Officer.


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