The 2016 presidential race is fraught with hot-button issues, with each party and each candidate taking positions on just about every issue imaginable. Thanks to high profile instances such as Valeant, Turing, and Gilead, added to the fray this election cycle is the topic of drug pricing. At the confirmation hearing for Robert Calif as FDA Commissioner the topic of drug pricing was brought up by both democrats and republican senators.
Background
Valeant Pharmaceuticals purchased the heart drugs Isuprel and Nitropress and immediately boosted the prices by 212 percent and 525 percent, respectively. Valeant allowed patients to lower, or even eliminate, their co-pay if they ordered their drugs through Philidor, a mail-order pharmacy. Turing came under fire when it purchased the prescription drug Daraprim and shortly thereafter raised the price more than 50-fold from $13.50 to $750 per pill. Gilead’s story goes all the way back to 2013, when it caught fire that they were charging $84,000 for a 12-week course of Sovaldi, a treatment for hepatitis C. PhRMA has publicly denounced the industry “bad actors” while continuing to fight against proposals that would control drug pricing.
The media propels discussion about many of the political issues, and drug pricing is no different: The New York Times, The Washington Post, and Politico are just a sampling of the media outlets who have recently written headlines about drug pricing and the political ramifications of those who speak out against it.
The October Kaiser Health Tracking Poll found that the affordability of prescription drugs is at the top of the general population’s priority list, which has helped force presidential candidates into coming up with their own solution to this issue.
Presidential Candidates
Both leading presidential candidates for the Democratic Party’s nomination, Hillary Clinton and Bernie Sanders, have been vocal about their desire to control prescription drug costs and have released their own plans to lower prescription drug prices.
Republican presidential candidates have tended to steer clear of the issue, but Donald Trump and Marco Rubio have expressed concern over high drug prices. Neither, however, has come close to suggesting price controls or laying out specific policies to reduce drug costs.
Congress
However, it isn’t just presidential candidates who have a focus on the issue; Congress is also starting to bring the issue into focus, with the Senate Aging Committee holding a hearing on the “substantial price increases on recently acquired off-patent drugs,” and the House Committee on Oversight and Reform launching an “Affordable Drug Pricing Task Force.”
While it is unlikely that any legislation to control or significantly reduce the price of drugs would be passed prior to the November 2016 elections, the hearings and Task Force are likely to be exploited by critics of the pharmaceutical industry in their anti-industry agenda and narrative.
Current Administration
Given the uncertainty of the November 2016 election and the partisan gridlock facing Congress, the Obama Administration is reportedly thinking about addressing the issue head-on by unilaterally making regulatory changes, such as contracting directly with drug makers to pay prices based on performance, employing pharmaceutical cost transparency measures, or targeting single-source drugs for price negotiations.
Further fueling the rumor mill that the Obama Administration is thinking about taking executive action, the Department of Health and Human Services is holding an invitation-only forum on November 20th with health care stakeholders (consumers, providers, employers, manufacturers, health insurance issuers, and state and federal government officials) to discuss different ways to address the rising costs of specialty drugs and to continue ensuring patient access to medications.
Legislative Action
While it is unlikely that any Congressional action will result in a standalone bill before the 2016 elections, Congress has made some movements on drug pricing. The budget deal that was signed into law by President Obama the last week of October made it so generic drug makes will be required under the new Medicaid Drug Rebate Program to pay higher rebates if their prices rise too quickly. Generic drug manufacturers will have to pay additional rebates if the price of a generic for a given quarter outpaces the inflation-adjusted baseline Average Manufacturer Price (AMP).
MedPAC
During the 2015-2016 meeting cycle, there was a noticeable spike in interest in examining drug prices: the Medicare Payment Advisory Commission (MedPAC) addressed drug pricing directly in their first two meetings of this year; however, at the last meeting, the Chairman reiterated MedPAC’s commitment to careful deliberation and rigorous analysis, assuaging any concerns that the Commission may endorse haughty or short-term proposals just for the sake of “doing something.”
Conclusion
While the industry is not shy, or afraid, of a conversation about drug affordability and access, it wants the focus to be on “spending across the health care system to find solutions that ensure access to high quality, patient-centered care and continue to encourage development of innovative, life-changing medicines.”