Achieving an affordable health care future for patients
The drug pricing debate in Washington has kicked back into high gear, and it is more contentious, convoluted and misguided than ever. Who’s on what team? Whose “turn” is next? And, most importantly, what is in the best interest of patients and taxpayers? These questions may sound rhetorical, but they’re questions that Congress should be asking.
Here’s why: Navigating complex and divergent drug pricing proposals can be challenging, yet the formula for determining what should get a “yes” or “no” vote should be quite simple. First: Support bills that will lower drug prices and make prescription drugs and health benefits more affordable for patients. Second: Oppose bills that would limit options and raise costs for patients, employers and taxpayers.
The reality is the solutions to the existing prescription drug affordability challenge in this country can be simple too. But they’re certainly not – mostly because we are in an environment right now where the pharmaceutical industry lobby is purposefully trying to muddy the waters and advocate for legislation that does nothing other than create diversions from legislation that could hurt their own companies’ profitability.
We must go back to the basics and, first and foremost, acknowledge that big drug companies set the prices of the products they make and sell. And some big drug companies work incredibly hard to protect their pricing power and brand monopolies — so that competition in the market does not compel them to lower prices. Lawmakers cannot make a dent in the problem if they do not understand — or choose not to acknowledge — who has full decision-making power over the price of a pharmaceutical product.
Look no further for proof than the recent announcements by drug companies to reduce their list prices on insulins. The companies simply chose to lower their prices, regardless of rebates or any other component. It can be done and should be done.
It remains to be seen if the price drops for insulin are the start of a new trend of list price reductions by drug companies. The insulin list price drops were clearly a result of public scrutiny — people demanded action from the insulin manufacturers, and they acted. And that’s a good thing. We should commend it and call for more of it. But it’s less than clear whether other drug companies will follow — particularly when many have been so effective at convincing lawmakers and the American public that they are somehow not responsible for the list prices on the products that only they make and sell.
So, what else can be done to lower costs?
Congress can start by preserving and strengthening the parts of the private market system that are working to lower costs and provide choice for employers and other plan sponsors to offer affordable health care coverage. Government data has time and again proven that pharmacy benefit companies reduce prescription drug costs, and indeed pass through nearly all of the savings, resulting in payers and patients saving an average of $1,040 per person per year.
Congress should reject the false narrative that somehow pushing for discounts and rebates for employers and patients has any connection to the prices set by drug companies. And, given the abuses of pricing and patent power we’ve seen from big drug companies, Congress should also reject legislation that ties the hands of the only entities providing a check on drug company prices.
Rather than limiting choice for employers and restricting options for achieving savings, Congress should call on drug companies to continue to lower list prices and enact laws that strengthen competition in the market. In most industries, but especially in the prescription drug marketplace, competition is the most effective way to lower costs for the consumer.
A package of bipartisan legislation just unanimously advanced in the Senate that would encourage the kind of cost-reducing competition our health care system so desperately needs right now. The legislation takes a holistic view of the prescription drug supply chain, rather than singling out one aspect, and, more importantly, puts an end to common and egregious abuses of the drug patent system as a means of providing more affordable prescription drug options for patients.
At a recent Senate Finance Hearing on pharmacy benefit companies, it was noted that more than 3 out 4 patents granted for prescription drugs are for existing — i.e., already patented — medications. For the top ten best-selling drugs in the U.S., there are on average 74 granted patents, preventing generics and biosimilars from entering the market. Patent thickets on five of the ten top-selling drugs in the U.S. resulted in more than $500 billion in additional sales for drug companies. And patent abuse blocking biosimilars from market alone will cost patients an estimated $30 billion over the next decade — on top of a $5 billion heightened price tag from lost biosimilar competition between 2015 to 2020.
The patent abuse bills include sound, easy-to-implement legislation that will lower costs for consumers and taxpayers. Unfortunately, they aren’t making big headlines or getting the traction they deserve. Instead, big drug companies are using big advertising, lobby and third-party sponsorship budgets to make sure the attention of Congress and the media stay laser focused on pharmacy benefit companies and convoluted ways to legislate them — efforts that limit the ability to push for price concessions on prescription drugs and take away employer choice when it comes to what the benefits they offer their own employees.
So at the next hearing or markup on drug pricing, don’t just ask: Whose turn is it? Instead, ask: What is going to actually lower drug costs? The answers — and there are answers — should be focused on patients not profits, especially in an environment like the one we are in today when the resolve to lower prescription drug costs for patients is as strong as ever on both sides.
Pharmacy benefit companies share this resolve – and a deep sense of responsibility to be part of the solution for patients who face difficulty affording and accessing their medications. That’s why, our industry released a policy platform, “Unlocking an Affordable Future,” outlining a new vision for a more accessible and affordable health care future — one focused on specifically how to build on what’s working in our health care system while moving toward a more functional, equitable, and affordable market for patients to access prescription drugs.
Building an affordable and sustainable health care future that prioritizes value for patients requires collaboration and accountability from every entity in the prescription drug supply chain. Pharmacy benefit companies stand ready to work with policymakers and partners in both the private and public sectors to do our part and invite others to join us in advancing tangible, patient-focused solutions.
JC Scott is President & Chief Executive Officer of The Pharmaceutical Care Management Association (PCMA).
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