High drug prices have long been a burden on the US healthcare system, and recent weeks have seen a burst of Congressional activity aimed at driving down rising drug costs. But is Congress all talk and no action on this key issue?
High drug prices have long been a burden on the US healthcare system, and recent weeks have seen a burst of Congressional activity aimed at driving down rising drug costs.
From the House Committee on Oversight and Reform’s new probe into drug price hikes to the introduction of legislation that would allow consumers to purchase their prescription drugs from authorized pharmacies in Canada, the new sitting Congress is making bold gestures toward changing the course of ever-increasing drug prices.
However, it remains to be seen whether law makers will see their legislative proposals enacted into law, and not all experts are optimistic that legislators will be successful in taking meaningful action to curb the cost of drugs.
Speaking to The American Journal of Managed Care® (AJMC®)’s sister site, The Center for Biosimilars®, in an interview, James Shehan, JD, an attorney who specializes in regulatory matters at Lowenstein Sandler, LLP, said, “I think you could sum up Congress over the last decade or more as all talk and no action.”
That fact is ironic, said Shehan, because there exists a reasonable amount of consensus across parties that drug prices are too high, yet “Congress has been singularly unable to do much of anything about it.”
While there may be greater action taken by the sitting Congress, with 1 party controlling each house, he said, major change is unlikely.
According to some stakeholders, one potential litmus test for law makers’ willingness to take on drug prices is a piece of legislation that has languished in Congress for years: the Creating and Restoring Equal Access to Equivalent Samples Act, or the CREATES Act. The proposed legislation would allow a drug maker that is working on developing a generic or a biosimilar of a brand-name drug to bring action against the brand-name drug maker if it refuses to make samples of its product available for testing. As a result, say the bill’s supporters, cheaper generics and biosimilars would reach patients more quickly, driving down costs and helping to promote a more sustainable healthcare marketplace.
The bipartisan bill was first introduced by Senator Patrick Leahy, D-Vermont, in 2016 and enjoys broad support from both sides of the aisle, with Senator Chuck Grassley, R-Iowa, cosponsoring the bill. The CREATES Act is also endorsed by a range of organizations, including the generics industry group Association for Accessible Medicines (AAM), AARP, and the American College of Physicians.
Yet despite its wide appeal, the legislation has yet to come to a vote, possibly because of heavy opposition from trade group Pharmaceutical Research and Manufacturers of America (PhRMA), which spent heavily, reported The Hill in 2018, on lobbying against the bill, which PhRMA says would expose brand-name drug makers to significant risk and would hinder innovation.
In an interview with AJMC®, Michael Brzica, vice president of government affairs at AAM, says that he sees “a more significant appetite” in the new Congress for taking action on drug pricing, and as a result, expects the new sitting Congress to take up the CREATES Act in short order.
One reason for his optimism is renewed public interest in the matter. Pre-election polling of the electorate, he noted, showed that voters across party lines agreed that drug prices were a top priority, and there has also been “a tremendous amount of media attention to the issue, either driving or in response to public concern.” Those factors create a “perfect storm,” he said, to compel politicians to work together.
However, like Shehan, Brzica shares concerns that law makers’ enthusiasm for targeting drug costs could wane before serious action is taken, and he adds that, while the CREATES Act would solve one important problem related to drug costs, “there is not a silver bullet or comprehensive opportunity for Congress to pass 1 bill and be done with the problem.” Instead, it will take sustained, bipartisan effort to find meaningful solutions to what has grown to be a sizable problem.
While it remains to be seen whether Congress will deliver on its promises, individual US states may be the driving forces behind drug pricing change.
Shehan noted that “States have actually done an awful lot over the last 5 to 10 years on drug pricing, and it’s an accelerating trend. By one count, almost all of the states had some kind of proposals that they were considering [in 2017], and a number of them have been enacted.”
While he noted that not all of the states’ efforts are without legal challenges—a Maryland bill targeting price gouging was struck down—Shehan expects to see states being “very active in this area and having an impact.”
Regardless of whether reforms are led by Congress or by individual states, other stakeholders stand ready to help facilitate change.
One such group is the Institute for Clinical and Economic Review (ICER), an independent nonprofit organization that seeks to improve healthcare value by providing comprehensive clinical and cost-effectiveness analyses of treatments, tests, and procedures. ICER recently announced that it is undertaking a new annual analysis—an Unsupported Price Increase report (UPI)—that will review significant prescription drug prices increases and determine whether such increases are supported by new clinical evidence.
Typically, ICER’s work focuses on looking at available clinical evidence for a newly approved drug and proposing an appropriate price based on the product’s likely benefits and risks. But as David Whitrap, vice president of communications and outreach at ICER, told AJMC® in an email, policy makers frequently approach the organization hoping to gain insight into how to frame drug makers’ justifications for price hikes to drugs that have already become established in the marketplace. As more US states begin to implement drug price transparency legislation, ICER is fielding even more such requests.
ICER hopes that its new UPIs will give policy makers the data that they need to understand when prices are rising in line with accumulated clinical data that increase the value of a drug to patients, and when prices are rising without justification.
“In the value-based system for which ICER advocates, it makes sense that a price increase may be warranted if new clinical data emerges showing that the drug is more beneficial for patients than what was previously understood,” said Whitrap. “We want an evidence-based system that handsomely rewards the treatments that truly transform patients’ lives, but to sustain that system, we need to stop overpaying for the products that offer little to no additional benefit for patients.”
ICER says that it will have the first of its UPI reports ready for interested parties to use by October of this year.