Senator Maggie Hassan of New Hampshire recently wrote an op-ed for Modern Healthcare in which she opined on the need for increased transparency of the pharmaceutical industry due to practices that are unnecessarily driving up prescription drug costs.
The op-ed follows the July 2019 introduction of the Prescription Drug Pricing Reduction Act, which would put a cap on out-of-pocket prescription drug costs for Medicare Part D beneficiaries and cut down on pharmaceutical companies that raise drug prices higher than the rate of inflation.
In her op-ed, Senator Hassan tries to light a fire under her colleagues, saying, “for far too long, Congress has done nothing, refusing to even require the basic transparency necessary to shed light on companies’ deceptive practices.” She cites the work she has done on the Prescription Drug Pricing Reduction Act, and the fact that her work on the issue is bipartisan: “I worked with my colleagues on both sides of the aisle to incorporate a transparency study into the bill, but there is far more we can do on a bipartisan basis.”
Senator Hassan states that drug companies are increasingly using anti-competitive practices and marketing tactics and interjecting in clinical decisionmaking and prescribing. She believes that direct-to-consumer ads and foundations run at least in part by pharmaceutical companies are not helpful, but instead direct patients toward specific drugs, irrespective of whether their doctor has prescribed it. She notes that such practice “steers patients toward a company’s products and away from products manufactured by their competitors.”
By steering patients to specific products and by getting tax breaks for donations to foundations, patients and taxpayers alike wind up with higher prescription drug costs, according to Senator Hassan.
She believes these actions by the pharmaceutical industry are also at least partly responsible for the opioid crisis – “[a]s they distributed … unfathomable amounts of opioids, pharmaceutical companies pushed these drugs with deceptive marketing tactics, including advertisements, payments to physicians who were willing to write high volumes of prescriptions, and donations to educational foundations willing to spread misinformation about the safety of opioids.”
Senator Hassan argues that “[b]y keeping their pricing strategies, negotiations with purchasers and rebate agreements opaque, pharmaceutical companies gain preferential placement on drug formularies and artificially increase utilization by patients, without lowering the actual list price of their drugs.”
In concluding her op-ed, Senator Hassan puts forth the idea of expanding the Medicare Open Payments database to include payments made by opioid manufacturers to not-for-profit foundations and to require that those foundations submit annual disclosures to the Health and Human Services (HHS) Office of Inspector General.
The Prescription Drug Pricing Reduction Act
Since its introduction in, and passage through, the Senate Finance Committee in July 2019, the Prescription Drug Pricing Reduction Act has not really gone anywhere. More recently, Senate Finance Committee Chairman Chuck Grassley released a draft of the proposed legislation, but no changes were made following the July 2019 Chairman’s Remarks. Time will tell if Senator Hassan’s op-ed will help to move the needle on that legislation, or any legislation relating to transparency in the pharmaceutical industry.