American College of Physicians Calls on Federal Government to Regulate Prescription Drug Prices

Late last year, we reported on the AMA’s House of Delegates vote to adopt several recommendations in support of regulating medication pricing, including a recommendation that the AMA encourage the Federal Trade Commission to limit anticompetitive behavior by companies attempting to reduce competition from generic manufacturers through manipulation of patent protections and abuse of regulatory exclusivity incentives. Now, the American College of Physicians (ACP) has come out with some of their own suggestions in a paper published in the Annals of Internal Medicine.

ACP paper

The ACP’s Health and Public Policy Committee’s paper urges the federal government to tackle rising prices, noting that the United States is the only member of the Organization for Economic Cooperation and Development that does not impose government regulations on drug pricing. Other recommendations include a call for the federal government to allow Medicare to negotiate prescription drug prices with manufacturers, the re-import prescription drugs from other countries, a requirement that manufacturers disclose actual research and production costs for drug development and manufacturing, and requirement that manufacturers disclose the prices of drugs that were developed using research funded by the federal government. The American College of Physicians says it plans to bring its messages about drug prices to Washington in May, when its members will call on legislators in Congress to press for action.

Industry reaction

Industry is less than pleased with the paper. Biotechnology Innovation Organization’s President and CEO Jim Greenwood issued a statement slamming several parts of the ACP report.

“Many of the proposals released by the American College of Physicians would significantly hinder the ability of emerging biotechnology companies to develop the new cures and therapies that patients need to live longer, more productive lives. Several provisions of this plan, including the reimportation of prescription drugs from other countries and allowing HHS to negotiate prices in Medicare Part D, have been proposed many times in the past, and have always been rebuffed on a bipartisan basis because of the widely recognized fact that they are simply bad ideas for patients, or would produce scant savings. The Congressional Budget Office has estimated that allowing HHS to negotiate prices for drug covered under Medicare Part D, as recommended by the ACP, would produce a ‘negligible effect.’ On reimportation, the College itself acknowledge the ‘various safety concerns’ posed by the proposal.”

Greenwood did try to find some common ground: “However, we share the College’s concern with the rising use of specialty tier cost-sharing, in which patients must pay a relatively high percentage of their drug costs rather than a flat co-payment. The College rightly calls upon payers to ensure that patient cost sharing for specialty drugs do not create a ‘substantial economic barrier’ to patients obtaining needed medicines.”

The Coalition for Healthcare Communication’s Executive Director John Kamp echoed Greenwood’s criticism of ACP when it came to the paper’s position on direct-to-consumer (DTC) drug advertising. According to the ACP’s report, “the practice of DTC advertising for prescription drugs is concerning,” and that the group of 143,000 physicians “believes that DTC is inappropriate because it may undermine the patient-physician relationship and foster confusion.” The paper argues that if the government will not ban DTC advertising, as the AMA recently called for, then there should be “broad efforts by federal regulators to ensure that information about a drug’s effectiveness and safety, and about alternative treatments, is clearly disclosed to patients”.

“What the ACP and other entities do not seem to recognize is that in numerous ways, DTC ads actually help to improve the patient-physician relationship because the ads often get patients talking to their doctors about conditions – many of which are underdiagnosed and undertreated – that they have seen or heard about in DTC ads,” said Kamp. “And, to the ACP’s point about both the effectiveness and safety of treatments and alternative treatments,” Kamp continued, “the duty to interpret and relay that information has and will continue to fall on the physician, who ultimately is the individual writing prescriptions for patients.”

The ACP also states that the “many of the largest pharmaceutical companies are spending more on marketing and administration than they are on research and development.” However, the Pharmaceutical Research and Manufacturers of America (PhRMA) counters that the biopharmaceutical sector is the single largest funder of business R&D in the United States, and that biopharmaceutical companies invested more than 12 times the amount of R&D per employee than manufacturing industries overall between 2000 and 2010. According to PhRMA, economists also believe that biopharmaceutical healthcare communication costs are overstated, because they are grouped with other costs, such as pension costs and office furniture and supply costs, which are not directly related to marketing.