The Campaign for Sustainable Rx Pricing (CSRxP) held a forum on “market-based policy solutions to curb rising drug prices” at the Newseum in Washington, D.C.
John Rother of CSRxP started the conversation at the forum by discussing the importance of finding a sustainable solution to drug pricing, stating, “Patients and families worry about the cost of the drugs they need. To ensure access to affordable treatments, we need transparency, competition, and value-based pricing.”
Rick Pollack, president and CEO of the American Hospital Association also noted how important this discussion is, stating that without market-based solutions to drug pricing, it is nearly impossible “to strike a balance between preserving innovation and ensuring affordability.” Dr. Debra Whitman of AARP touted the need for transparency, “[t]ransparency will help people understand how medication prices are set” and that “consumers desperately want innovation, but innovation that’s unaffordable is meaningless.”
Proposals for Change
The proposals put forth by CSRxP focus on three tenets: increasing transparency, promoting competition and innovation, and increasing value.
Increased Transparency
CSRxP suggests that manufacturers should release the details of a drug’s unit price, cost of treatment, and projection on federal spending before the FDA approves it. CSRxP also suggests that manufacturers be required to annually report increases in a drug’s list price. They argue this because reporting requirements are already in place for other entities, the same level of transparency should be implemented and extended to the pharmaceutical sector as well. They also believe that HHS should provide an annual report to the public, including the top fifty price increases per year (by branded or generic drugs), the top fifty drugs by annual spending and how much the government pays in total for the drugs, and historical price increases for common drugs.
Promoting Competition and Innovation
When it comes to promoting competition, CSRxP agrees with many others and states that the backlog of generic drug applications is a huge problem. The group suggests that the FDA be provided the necessary resources to clear the nearly 4,000 backlog of generic drug approval applications, and to prioritize them.
The CSRxP also suggests that the FDA ought to incentivize competition for additional market entrants, mentioning programs similar to some FDA programs that are intended to expedite the review of new drugs that address unmet medical needs for serious or life-threatening conditions. Incentives should have goals of driving competition for expensive treatments where no competitors currently exist and encourage a second or third market entrant.
Another suggestion is to promote the uptake of biosimilars. The group suggests that regulatory policies should encourage market entry and uptake of biosimilars, as they have the potential to expand treatment options, and thereby, reduce costs of expensive drugs.
Currently, pharmaceutical manufacturers are able to extend their market exclusivity protections by seeking approval for a “new” product that is essentially the same as the original product. By prohibiting this tactic sometimes used, it will bring consumers more options and lower prices quicker.
Increasing Value
One way that value can be increased, according to the group, is by increasing funding for public and private research on drug pricing and value. CSRxP suggests that policymakers increase funding for private and public research efforts, like the Institute for Clinical and Economic Review (ICER). ICER is a non-profit organization that evaluates the evidence on the value of medical tests and treatments. CSRxP believes that such objective information is “critical for physicians, patients, and payers as more and more high priced drugs are introduced into the health care system.”
CSRxP suggests that another way to increase value is to expand value-based pricing in public programs. They suggest that this can be done by implementing steps to ensure that programs like Medicare and Medicaid can best take advantage of recent developments in value-based purchasing to ensure all parts of the U.S. health care system can benefit from market-based negotiating efforts to lower drug prices.
Suggestions Not Included
Interestingly, the proposals did not recommend allowing Medicare to negotiate drug prices, nor do they advocate for allowing drugs to be imported from abroad. While these suggestions are often made, especially by politicians, industry leaders did not believe they would be effective.
Even without including those two proposals, which are vehemently opposed by PhRMA, PhRMA was still not on board with the coalition’s other proposals, arguing that they were not actually market-based, and would likely still add costly new government regulations. Lori Reilly of PhRMA believes that these proposals were actually meant to serve as an effort by the healthcare insurance industry to deflect from the real problem: the rising costs of premium and out-of-pocket costs for consumers.