Americans have been saying for years that they are frustrated about the price of medicines and it should almost be at the top of the list of legislators. Congressional signatories are now starting to put together an extensive menu of ideas to reduce the cost of prescription drugs.
Democrats have made drug prices a top priority for their new house majority – and this is one of the rare policy areas where they might find some agreement with the Republicans.
Senator Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD) came out last week with a whole stack of bills to lower the prices of prescription drugs, merging some of the most popular ideas that are already there. Senator Chuck Grassley (R-IA), head of the Senate's influential finance committee, has indicated that he also wants to pursue this targeted bill, which leads to a new optimism that a two-fold compromise on this issue is within reach.
Democratic assistants have made it clear that while their conference is united about the need for action, they still have to find out where the consensus on the actual policy is. Hearings are expected in Parliament in the coming year.
Congress Democrats held a press conference on 10 January to introduce a legislative package "that would drastically reduce prices of prescription drugs in the United States." Alex Wong / Getty Images
"How do you take this gigantic menu of things and find out how things fit together in a way that causes some of the wrongs?" Is how a senior home employee summed up the dilemma for me last fall.
The reality of drug prices is always more complicated than rhetoric. List prices get all the attention, and they have risen, but they do not tell the whole story. The actual costs for patients are more opaque, buried in a complicated web of manufacturer discounts and sharing of insurance costs. The current system, due to the shortcomings, has also achieved remarkable medical breakthroughs in recent decades; again, the issue of research and development is also a complex one.
Medication prices are a difficult problem. What we do know for sure is that people want something to be done about the costs of medicines. The current proposals on the table vary from realistic to purely ambitious. In about such an order they are:
Zac Freeland / Vox
Let's go through both types, starting with the more humble, but more politically feasible, possibilities.
Idea 1: help generic competitors to enter the market as quickly as possible
In terms of what Congress could actually pass and go to President Trump's office during a divided government, the best starting point would be two accounts, backed by Grassley, the Iowa Senator who just took over the Senate Finance Committee, to accelerate the development of generic medicines. .
Grassley told reporters last week he wanted to move a few accounts that would try, in various ways, to ensure that generic competitors of branded drugs could enter the market as quickly as possible (and thereby start lowering prices).
Sen. Chuck Grassley (R-IA) for the start of the Senate Commission hearing on November 15, 2018.Bill Clark / CQ Roll Call
They are both co-sponsored by Senator Amy Klobuchar (D-MN), a potential Democratic president of 2020, with Sen, Pat Leahy (D-VT) also attached to it. Those bills would, in short:
- Strengthen the legal remedies for generic companies if a brand drug manufacturer refuses to supply the materials needed to develop a generic alternative to a particular drug, while brand names must also be required to offer such samples in sufficient quantities at a reasonable price .
- Crack down on "pay for delay": payments that pharmaceutical brand names sometimes do to potential generic competitors that delay the development of the generic version of a drug
There are also other targeted proposals to step up government-funded research into the efficacy of medicines and to combat other types of patent abuse covered by the same umbrella and whose proponents expect consumers to be part of the forthcoming debate on the cost of medicines.
These ideas are not new; groups from the industry have tried to prevent them from ending up on Capitol Hill for years. But Grassley has a powerful perch as a financial chairman and it seems that he is seriously trying to do something in the next two years.
An irony of the current debate on drug prices, says Rachel Sachs, associate professor at the University of Washington in St. Louis, is that the opposition of the pharmaceutical industry to more modest proposals like this, aimed at certain bad actors and actions, Democrats prompts to embrace more ambitious and potentially disruptive proposals.
"When the industry even opposes those bills that are meant to keep bad actors in check – those who deal with covert settlements or other anti-competitive practices – it is not surprising that Democrats try to introduce more extreme ideas," she told me.
That's what we come up with. But first there is another idea that enjoys the support of both Democrats and Republicans.
Idea 2: let Americans import cheaper drugs from Canada
Drug entry was the other item on Grassley's list, and it is also part of the Sanders-Cummings roll-out. Grassley wants to submit a bill that is similar to previous proposals by the late Senator John McCain (R-AZ).
For the time being, let's look at the freshly introduced democratic law, co-author of Sens. Cory Booker (D-NJ) and Bob Casey (D-PA).
Functionally, the proposal is quite simple, but there are many granular conditions for which foreign sellers are allowed to export medicines to the United States, security protocols and even criminal sanctions for people who want to bring counterfeit products into the country. (Safety and the risk of counterfeit medicines is the major problem raised by industry as opposed to imports.)
American wholesalers, pharmacies and individuals could import drugs from Canada that were manufactured at locations inspected by the Food and Drug Administration. After a few years, imports from other countries are also allowed, provided the countries have similar regulatory and safety standards in relation to the United States.
Patients may only import drugs from foreign vendors with a license, only if they have a valid prescription from an American doctor and they can only order a delivery that would be 90 days or less. The Congressional Budget Office estimates that an earlier version of the democratic import budget would save the federal government nearly $ 7 billion over 10 years.
(The McCain proposal is a more limited version of the same idea, restricting imports to Canada and individual patients.)
Import is a popular idea that can easily be understood by the public, although policy bets do not like it. There is a risk that the other countries will take action if they raise their own prices in response to an American import program.
Idea 3: the & # 39; out-of-pocket & # 39; costs of medicines for medicines
There is also a question of insurance payments. Pharma argues, and with some justification, that the pain Americans feel about the affordability of medicines is less about drugs Prices (as determined by drugmakers) and more about drugs cost, what people have to pay from their own pocket under their insurance plan.
There are some proposals to specifically target the out-of-pocket costs for prescription drugs:
- As part of a broader price note for pharmaceuticals introduced last year, Sen. Tina Smith (D-MN) and Sanders proposed to introduce a maximum of $ 250 per month for sharing costs for prescription drugs for Obamacare and group insurance.
- Sen. Elizabeth Warren (D-MA) introduced an independent account in 2017 to do the same.
- Another Senator Bill Ron Wyden (D-OR) would lay a hard line on sharing prescription drugs for Medicare beneficiaries, who are currently required to continue paying copayments or co-insurance even after nominally beat the programs from their own pocket. cap.
Six in ten people take a prescription, and one in four says they or a family member refused to fill in a prescription or skip a dose because of the cost of their medicines. Those people would certainly welcome the immediate relief of sharing lower costs.
Democrats in particular, however, believe that more fundamental changes are needed in the market for prescription medicines.
Idea 4: Medicare collectively negotiates drug prices
Medicare negotiations have become the characteristic policy idea, especially on the campaign path, for democrats who say they want to lower the prices of medicines. It tends to poll well; President Donald Trump even flirted with the concept during his 2016 campaign.
Representatives of Elijah Cummings (D-MD), right, and Peter Welch (D-VT) speak to the media after a meeting with President Trump about the prices of prescription drugs, on March 8, 2017. Mark Wilson / Getty Images
A new bill, co-sponsored by Rep. Peter Welch (D-VT), describes parameters for negotiations:
- The bill would abolish an existing ban on the Secretary for Health and Human Services to negotiate price negotiations for medicines covered by Medicare Part D.
- The secretary would prioritize certain types of drugs for negotiation: expensive drugs, drugs with recent price increases and drugs without significant competition.
- The federal government would be responsible for the clinical effectiveness of a particular drug, as well as cost effectiveness, and its impact on the Medicare budget when negotiating new prices.
- The health secretary would create a formulary for Medicare drug coverage. Part D would be necessary to cover at least two drugs in each class and category.
- The legislation creates a setback price if the negotiations fail. Those fallback prices would be based on what other federal programs like Medicaid pay for drugs or on what certain foreign countries pay, whichever is the lower.
The tricky part of the Medicare negotiations was always the formulary (which prefers certain medicines and / or imposes restrictions when a medicine is covered). The Congressional Budget Office has previously said that Medicare negotiations without the formulary would not necessarily save a meaningful amount of money. That makes sense: negotiators need access to restrictions in order to obtain deeper savings from drug producers.
However, such restrictions also make the government vulnerable to attacks where it denies patients access to medicines they want or need; pharma argues that private Medicare Part D plans are already negotiating drug discounts and that patient access can be hampered by a model like this. The new legislative proposal makes it possible for patients to use Medicare to include medicines that are not included in the formulary.
There is a peripheral provision in the invoice that can also reduce costs. Low-income seniors covered by both Medicare and Medicaid are currently receiving medication through Medicare. According to the Sanders-Cummings law, drug manufacturers would have to pay Medicaid discounts for those patients, of which CBO would save an estimated $ 154 billion in ten years.
Idea 5: use foreign drug prices to lower US prices
The final piece of the Sanders-Cummings package has some similarities with a recently minted Trump management initiative. You could see it as an America First plan.
The bill is actually quite simple in its tool: if the US price for a drug is higher than in other developed countries, the drugmaker's monopoly would be terminated and generic competitors could enter the market for alternative versions of the drug at a lower cost. sell price.
This is how it would work:
- Every year the federal health department & # 39; Overpriced & # 39; identify medicines: medicines that are higher priced in the US than the average price in Canada, the United Kingdom, Germany, France and Japan.
- The health secretary can also label a medication as "overpriced" based on other criteria, such as the size of the patient population, the value of the drug for patients and the costs of developing the medicine (among other statistics).
- If a medicine is too high priced & # 39; The manufacturer loses patent protection that prevents competitors from developing generic versions of the drug.
- New generic competitors could then start selling their own iterations of the drug, although they would be obliged to pay a "reasonable royalty" to the original manufacturer of the drug.
Some experts, even those who generally prefer aggressive actions to lower drug prices, feared an earlier version of the plan, which Sanders and Rep. Ro Khanna (D-CA) last month introduced such broad criteria for labeling drugs as "too expensive" that the risks for medical innovation began to become more important than the benefits of lower prices.
I spoke to staff members working on this issue and they told me their theory of the matter: pharmaceutical companies will get the information they need – what they ask in the United States, what they charge elsewhere – to get their prices right. decrease to prevent their patents from being declared invalid. Democratic assistants believe that most drugmakers will do what they have to do to maintain a monopoly position in the United States.
Idea 6: let the government make drugs
Elizabeth Warren and Rep. Jan Schakowsky (D-IL) want the federal government to start producing prescription drugs if the market fails and the prices for certain medicines become unaffordable.
In their account, the federal government would produce a more affordable generic version of certain medicines under limited circumstances. These are the scenarios in which the FBIs can start producing their own medicines:
- If no company produces a generic version of the drug
- If only one or two companies produce a medicine and there is a price increase or a shortage of medicines
- If only one or two companies produce a drug, the price makes it difficult for some patients to pay for this, and the World Health Organization classifies it as an essential medication.
The bill allows the federal government to produce the drugs themselves or to get an external company to do it. It would determine "fair" prices to cover the costs of making the drugs. The bill also directs the federal government to produce insulin, which helps treat diabetes (which has tens of millions of Americans) and has triple the prices in the past ten years.
Wonks right and left thought this was an intriguing idea; it is similar to a new non-profit organization set up by hospitals and philanthropic groups to do the same. "This proposal could be a useful intervention for generic drugs that have recently experienced price increases or deficits," Sachs said last month.
Idea 7: end pharmaceutical monopolies and share & # 39; prices & # 39; from
This is the most daring idea on the list and when we evaluate the political prospects of the country, remember that Sanders has only stood in the Senate by supporting it. The 2017 version of his bill did not attract co-sponsors. (A new version is expected in the new congress.)
But if we put everything on the table, this proposal would put an end to the drugs market as it now exists – where drug producers get a monopoly on new treatments for a decade before generic competitors can enter the market – and replace them with something new.
Under the & # 39; price & # 39; model, developers of new medicines would receive a payment from the government instead and then other companies would be allowed to produce the treatment (within the safety and regulatory rules of the FDA of course.) De Sanders account puts $ 100 billion aside each year to pay the prices, with specific pounds of funding set aside for neglected diseases worldwide, diseases affecting smaller populations, and certain infectious diseases.
A board of government officials and presidential representatives would supervise the prize fund. Pricing for specific drugs would be based on the number of patients who could benefit from a new treatment, to what extent the new drug improves on existing treatments and other value considerations.
A "prize" system is a dream dream for the near future, although Sanders has previously indicated that such a program could start small by focusing on conditions with unique needs, such as HIV / AIDS. The biggest challenge is probably a disruption: pharmaceutical companies have made investments under the assumption that they would enjoy long monopolies on new medicines. The fundamental premise of the market would change under a "price plan" – for the good, in the eyes of its supporters, but pharma, on the other hand, asserts that innovation in this new market is at risk.
Sanders believes that his prize fund would be generous enough to keep R & D up to standard. Also in favor of the idea are libertarian scholars who also support the distribution of prizes instead of patents, creating a strangely-duck alliance of democratic socialists and absolutists in the free market. It is an interesting idea, at least.
In the near future, the proposals at the top of this list are much more realistic. But, as some experts wisely noted, the inconsistency in Congress and the continued deterioration of the cost of drugs on so many American portfolios will keep pressure on lawmakers to propose bigger and more powerful solutions to the problem.
Sen. Bernie Sanders (I-VT) (third left) speaks as (from left) Rep. Elijah Cummings (D-MD) Sen. Cory Booker (D-NJ), Rep. Ilhan Omar (D-MN) and Rep. Jan Schakowsky (D-IL) listened during a press conference on prescription drugs January 10, 2019, in the Capitol in Washington, DC. Congressional Democrats held a press conference to introduce a legislative package "that would drastically reduce the prices of prescription drugs in the United States." Alex Wong / Getty Images