Americans have been saying for years that they're frustrated by the price of the medicine and this should be at the top of the list of legislators. Congressional Democrats are now starting to develop a wide range of ideas to reduce the cost of prescription drugs.
Democrats have makes the price of medicines a top priority for their new majority in the House – and this is one of the few political areas where they could find common ground with the Republicans.
Senator Bernie Sanders (I-VT) and Elijah Cummings (D-MD) presented a large number of bills aimed at reducing the prices of prescription drugs, bringing together some of the most popular ideas already proposed. Senator Chuck Grassley (R-IA), who heads the Senate's influential Finance Committee, said he also wanted to follow up on a few targeted bills in Congress, which raises new optimism about the possibility of reach a bipartisan compromise on the issue.
The Democratic assistants made it clear that even though their conference was united on the need for action, it remained for them to determine where the policy consensus was to be. Hearings are scheduled in the House over the next year.
Congressional Democrats held a press conference on Jan. 10 to present a package of legislation "that would significantly reduce the price of prescription drugs in the United States." Alex Wong / Getty Images
"How do you choose this gigantic menu and see how things complement each other in ways that curb some of the abuse?", Summarizes one of the main advisers in the House that summed up the dilemma that has been presented last fall.
The reality of drug prices is always more complicated than rhetoric. Price list get all the attention and they have grown, but they do not tell the whole story. The actual cost to patients is more opaque, buried in an entangled network of discounts for manufacturers and insurance cost-sharing. The current system, for its flaws, has also allowed remarkable medical advances in recent decades; again, the issue of research and development is also complex.
Drug prices are a thorny issue. What we know for sure is that people want the costs of drugs to be paid. The current proposals on the table range from realistic to purely ambitious. In just about such an order, they are:
- Helping generic drugs to reach the market faster
- Limitation of direct costs
- Let Americans import drugs from Canada
- Stronger negotiations with Medicare for drugs
- Using Prices of Foreign Medicines as Indirect Price Control in America
- Let the government make some drugs
- Tear apart the existing patent system and start from scratch
Let's review both types, beginning with the most modest opportunities, but today the most politically viable.
Idea 1: Help generic competitors get into the market as quickly as possible
With regard to what could actually be adopted by Congress and reach the office of President Trump during a divided government, the best starting point would be two bills backed by Grassley, the Iowa senator who comes from take charge of the Senate Finance Committee, to accelerate the development of generic drugs. .
Grassley told reporters last week, he wanted to move a pair of bills that, by various means, would try to ensure that the generic drugs competing with the original drugs are marketed (and begin to lower prices) as quickly as possible .
Senator Chuck Grassley (R-IA) prior to the start of the Benchmarking Hearing of the Senate Judiciary Committee on November 15, 2018. Call of Bill Clark / QC
Senator Amy Klobuchar (D-MN), a potential candidate for the 2020 Democratic presidential election, co-sponsored Sen and Pat Leahy (D-VT), also a partner. In short, these bills:
- Strengthen legal remedies for generic drug companies if a brand-name drug manufacturer refuses to provide the materials needed to develop a generic alternative to a particular drug, while requiring brand-name drug companies to provide those samples in sufficient quantities at a reasonable price.
- Fighting "late payment": payments that brand-name drug companies sometimes pay to potential generic competitors that delay the development of the generic version of a drug
There are also other targeted proposals aimed at scaling up government-funded research on the effectiveness of drugs and curbing other types of patent abuse that fall under the same umbrella and that consumer advocates expect to be part of the upcoming debate on the cost of drugs.
These ideas are not new; Industry groups have tried to stop them from going anywhere on Capitol Hill for years. But Grassley has powerful power as president of finance and seems to be serious about doing something in the next two years.
According to Rachel Sachs, associate professor at Washington University in St. Louis, the debate over the price of drugs is ironic, namely that the opposition of the pharmaceutical industry to more modest proposals like this one, targeting particularly bad actors and actions, pushes Democrats to adopt more ambitious and potentially disruptive proposals.
"When the industry even opposes bills designed to crack down on bad actors – those who engage in collusive regulations or other anti-competitive practices – it's no wonder that Democrats seek to present more extreme ideas, "she said.
We will come back to this in a moment. But first, there is another idea that is supported by Democrats and Republicans.
Idea 2: Let Americans import cheaper drugs from Canada
The importation of drugs was the other item on Grassley's list and was also part of the Sanders-Cummings rollout. Grassley wants to pursue a bill that resembles the earlier proposals of the late Senator John McCain (R-AZ).
For now, though, let's look at the recently introduced Democrat Bill co-authored by Sense. Cory Booker (D-NJ) and Bob Casey (D-PA).
Functionally, the proposal is quite simple, even though there are many specific conditions allowing foreign sellers to export drugs to the United States, security protocols and even criminal penalties to people who are trying to import counterfeit goods into the country. (The safety and risk of counterfeit medicines are the major problem raised by the sector that opposes the import.)
Wholesalers, pharmacies and individuals in the United States would be permitted to import from Canada drugs manufactured at sites inspected by the Food and Drug Administration. After a few years, imports from other countries would also be allowed, provided that countries apply regulatory and safety standards comparable to those of the United States.
Patients would be allowed to import drugs only from approved foreign sellers, only if they have a valid prescription from an American doctor and could only order a supply of a duration of 90 days or less. The Congressional Budget Office valued an earlier version of the Democrat import bill would save the federal government nearly $ 7 billion over 10 years.
(McCain's proposal is a more limited version of the same idea, limiting importation into Canada and to individual patients.)
Import is a popular idea This is easy for the public to understand, even if policy buffs do not like it. Other countries may intervene if they feel that their own prices are rising in response to a US import program.
Idea 3: cap drug costs for patients
There is also the issue of insurance benefits. Pharma asserts, and with some justification, that the pain felt by Americans with respect to the price of drugs is less related to prices (as defined by drug manufacturers) and more about drugs fresh, which people are forced to pay for themselves under their insurance plan.
Some proposals aim to specifically target the direct costs of prescription drugs:
- Sen. Tina Smith (D-MN) and Sanders proposed, as part of a broader bill on drug prices, to introduce a $ 250 per month cost-sharing cap prescription drugs for Obamacare and group insurance plans.
- Senator Elizabeth Warren (D-MA) introduced a stand-alone bill in 2017 to do the same.
- Another bill by Senator Ron Wyden (D-OR) would impose a strict limitation on the sharing of prescription drug costs for Medicare beneficiaries, who are currently required to continue to pay co-payments or co-insurance even after they have been paid. disbursed by the program. cap.
Six out of 10 people take a prescription and one in four states that they or a family member refused to fill a prescription or skipped a dose because of the cost of their medication. These people would certainly welcome the immediate relief of a less expensive sharing.
However, Democrats in particular believe that more fundamental changes are needed in the prescription drug market.
Idea 4: let Medicare collectively bargain drug prices
Medicare negotiations have become the basic idea of politics, especially in the election campaign, for Democrats who say they want to lower the price of drugs. This tends to sound well; President Donald Trump even flirted with the concept during his 2016 campaign.
Representatives Elijah Cummings (D-MD), on the right, and Peter Welch (D-VT) address the media after a meeting with President Trump on the price of prescription drugs, March 8, 2017. Mark Wilson / Getty Images
A new bill, co-sponsored by Representative Peter Welch (D-VT), sets the trading parameters:
- The bill would repeal an existing prohibition against the secretary of health and social services negotiating the prices of Medicare Part D drugs.
- The secretary would give priority to negotiating certain types of drugs: high-cost drugs, drugs whose prices have increased recently, and drugs without significant competition.
- The federal government would report on the clinical effectiveness of a given drug, its cost-effectiveness and its impact on the Medicare budget when negotiating new prices.
- The health secretary would create a form for Medicare coverage. Part D should cover at least two drugs of each class and category.
- Legislation creates a so-called fallback price if negotiations fail. These fallback prices would be based either on what other federal programs, such as Medicaid, pay for drugs, or what some foreign countries pay, the lower of the two.
The tricky part of negotiating with Medicare has always been the form (which gives preference to certain medications and / or places restrictions on when a drug is covered). The Congressional Budget Office has previously stated that without the form, negotiations on Medicare would not save considerable sums. This makes sense: negotiators need the impact of access restrictions to achieve greater savings for drug manufacturers.
However, these restrictions also make the government vulnerable to attacks aimed at preventing patients from having access to the medications they want or need. Pharma says Medicare Part D private plans are already negotiating drug rebates and patient access may be hampered by a model like this one. The new bill allows patients to use Medicare to cover drugs not included in the form.
The bill contains a provision on the periphery that could also reduce costs. Low-income seniors who are covered by both Medicare and Medicaid are currently receiving Medicare medications. The Sanders-Cummings bill would require drug manufacturers to pay Medicaid discounts for these patients, which, according to CBO, would save $ 154 billion over 10 years.
Idea 5: Use the prices of foreign drugs to reduce US prices
The last piece of the Sanders-Cummings package has some similarities with an initiative of the Trump administration recently struck. You could think of this as an America plan first.
The bill is actually quite simple: if the price of a drug in the United States is higher than in other developed countries, the monopoly of the drug manufacturer would disappear and generic competitors could enter the market and sell alternative versions of the drug at a lower price.
Here's how it would work:
- Each year, the federal Department of Health identified "overpriced" drugs: US drug prices were higher than the average price in Canada, the United Kingdom, Germany, France, and Japan.
- The health secretary could also label a drug as "overpriced" on the basis of other criteria, including the size of the patient population, the value of the drug for the patients, and the drug's development costs ( among other parameters).
- If a drug is found to be "overpriced", its manufacturer would lose the patent protections that prevent its competitors from developing generic versions of the drug.
- The new generic competitors could then start selling their own iterations of the drug, but they would be required to pay a "reasonable fee" to the original manufacturer of the drug.
Some experts, even those who generally favor aggressive measures to lower the price of drugs, feared that an earlier version of the plan, presented last month by Sanders and Rep. Ro Khanna (D-CA), define such general criteria for the labeling of drugs: excessive price "that the risks for medical innovation have begun to outweigh the benefits of lower prices.
I've discussed this issue with staff members who have worked on the bill and have explained their theory: Pharmaceutical companies will have the information they need – from what they charge to the United States, from what they charge elsewhere – to lower their prices sufficiently. to prevent their patents from being invalidated. The Democratic assistants believe that most drug makers will do what they need to maintain a monopoly in the United States.
Idea 6: That the government makes drugs
In their bill, under limited circumstances, the federal government would produce a more affordable generic version of certain drugs. Here are the scenarios where the federal government could start making its own drugs:
- If no company produces a generic version of the drug
- If only one or two companies produce a drug and there is a price increase or a shortage of drugs
- If only one or two companies produce a drug, the price is difficult to pay for some patients, and the World Health Organization classifies it as an "essential drug".
The bill allows the federal government to self-produce drugs or to use an outside company. This would set "fair" prices to cover drug manufacturing costs. The bill also orders the federal government to start producing insulin, which helps treat diabetes (which afflicts tens of millions of Americans) and whose prices have tripled over the last few years. decade.
Wonks, right and left, found this idea intriguing. it's like a new non-profit organization created by hospitals and philanthropic groups to do the same thing. "This proposal could be a helpful intervention for generic drugs that have recently experienced a price spike or a shortage," Sachs said last month.
Idea 7: Put an end to pharmaceutical monopolies and distribute "prizes"
This is the boldest idea on the list, and when it assesses its political outlook, remember that Sanders is the only one supporting it in the Senate. The 2017 version of his bill did not attract any co-sponsors. (An updated version is expected in the new congress.)
But if we put everything on the table, this proposal would effectively end the drug market as it exists today – in which drug manufacturers have a decade's monopoly on new treatments before any generic competitor could come on the market – and replace it with something new.
According to the "price" model, developers of new drugs would instead receive a payment from the government and then other companies would be allowed to manufacture the treatment (in compliance with FDA safety and regulatory rules, of course) . The Sanders bill provides $ 100 billion a year. year to pay the prices, with specific funding pools for neglected diseases around the world, diseases affecting smaller populations and some infectious diseases.
A board of directors composed of government representatives and appointed by the president would oversee the fund. Prices for specific drugs would be based on the number of patients eligible for new treatment, the improvement of the new drug to existing treatments, and other value considerations.
A "price" system is an unrealistic dream in the near future, although Sanders has already indicated that such a program could be modest initially by focusing on conditions with unique needs, such as HIV / AIDS . Experts who follow the problem warn that even if the pharmaceutical industry fears too much innovation to eliminate the proposals they do not like, there is a time when the repression of large pharmaceutical companies could mean less revolutionary treatments on the road . These concerns should not be dismissed from the outset.
Sanders thinks its price would be generous enough for R & D to continue to flourish. And potentially in favor of the idea are libertarian scholars who also support the distribution of prizes instead of patents, thus creating a singular alliance of democratic socialists and free market absolutists. It's an interesting idea, at least.
In the short term, the proposals at the top of the list are much more realistic. However, as some experts have rightly pointed out, the intransigence of Congress and the continuing drag on the cost of drugs on so many US portfolios will prompt legislators to come up with bigger and bolder solutions to the problem.
Senator Bernie Sanders (I-VT) (Third from left) speaks as Representative (from left to right) Elijah Cummings (D-MD) Senator Cory Booker (D-NJ), Representative Ilhan Omar (D-MN) and Jan Schakowsky (D-IL) attends a news conference on prescription drugs on January 10, 2019 at the Capitol in Washington, DC. Congressional Democrats held a press conference to present a legislative package "that would significantly reduce the price of prescription drugs in the United States." Alex Wong / Getty Images