Administration wades further into drug price debate

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The Obama administration is stepping up its involvement in the debate over drug prices, sending letters to pharmaceutical companies and state Medicaid programs on Thursday asking questions about cost and access. 

{mosads}The Centers for Medicare and Medicaid Services (CMS) sent letters on Thursday to both sides in the drug pricing debate. On one hand, it sent letters to drug companies asking about pricing arrangements that they have with state Medicaid programs and ways to assist states with making high-price drugs affordable. 

On the other hand, CMS also sent letters to state Medicaid programs expressing concern that they are restricting access to high-price drugs too much as a way to keep down costs. 

The letters reflect an effort by the administration to show a balanced approach to the drug pricing issue, at a time when drug companies have been under assault for high prices.  

“The rhetoric around health care costs can become heated, particularly around the cost of prescription drugs,” CMS Acting Administrator Andy Slavitt wrote in a blog post Thursday. “At times, it can appear as if some of those who produce the pharmaceuticals and those whose lives often depend on them have unaligned interests. But we will not make progress by polarizing this debate.”

Still, the administration says it recognizes that with the anger raging over high drug prices, it needs to take action. 

“We recognize that the public is relying on our leadership,” Slavitt writes. “We will work to ensure that all viewpoints are considered as we strive for solutions.”

Slavitt gave nods to both sides of the argument in his post, noting that “drug innovation has resulted in better health outcomes for people across our nation.” However, he also raised concerns about rising costs, noting that drug spending increased 13 percent last year. 

The letters come two days after the administration announced a forum on drug prices slated for Nov. 20. 

Democratic presidential candidates Hillary Clinton and Sen. Bernie Sanders (I-Vt.) have made drug prices a focus and denounced pharmaceutical companies for their prices. Both have put forward proposals that the pharmaceutical industry strongly opposes, like allowing Medicare to negotiate drug prices down. 

President Obama proposed allowing Medicare to negotiate drug prices in his budget in February as well, but Republicans in Congress are largely opposed to that effort. 

However, there are some signs of Republicans getting involved in the issue. Sen. Susan Collins (R-Maine) announced a Senate Aging Committee investigation into high drug prices on Wednesday. 

CMS’s actions on Thursday focused on drugs that treat Hepatitis C. There have been new breakthrough cures in that area recently, but they have come at a high price, as much as $84,000 for a 12-week treatment. 

The administration sent letters to four drug companies asking about the possibility of “value-based purchasing” for Medicaid, with the idea that the system could save the states money. Under value-based purchasing, Medicaid would pay a price for a drug based on how effective it is shown to be. 

At the same time, the administration wrote to state Medicaid plans expressing concern that they are setting too many restrictions on covering Hepatitis C drugs in an effort to lower costs. 

A spokesman for the trade group representing the pharmaceutical industry said drugmakers are committed to increasing access for consumers.

“Biopharmaceutical companies are committed to ensuring patients have access to the medicines they need,” PhRMA spokesman Robert Zirkelbach said in a statement. He added that access to drugs can help save money and “avoid costly hospitalizations and other expensive health care services down the road.”
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