U.S. may seek to lower drug costs
February 13, 2019
David Mitchell is a man with a mission. He is determined to stitch together a movement that will finally smash the power of the pharmaceutical industry and bring pocketbook relief to millions of Americans who need expensive drugs.
Mitchell, a 68-year-old former Washington, D.C., communications executive, was diagnosed eight years ago with multiple myeloma, a blood cancer. Until recently, the disease has been held in check by drugs costing $325,000 a year. Medicare and a good Medigap policy have covered most of the expense.
In 2016 Mitchell said he began to think about others who had sky-high drug expenses but struggled to pay for them. “I had an epiphany,” he told me. “Why can’t I do something?
“Drugs don’t work if people can’t afford them,” he says.
So began his organization, Patients for Affordable Drugs Now, which collects stories about patients having trouble paying for their medicines and is building a patient advocacy community to make their voices heard. His group has collected some 15,000 patient stories, more than 100,000 emails, and has trained patients to be advocates to testify in state legislatures and lobby Congress.
Unlike most other patient groups that work on pharmaceutical issues, Mitchell’s group takes no money from the drug industry. He says money comes from foundations, friends, family, and patients, but not from anyone who profits from making pharmaceuticals. This gives his group independence and credibility that others might not have.
Mitchell and I talked about various proposals floating around to deal with the high price of medicines. At the outset, he noted that list prices for drugs are still going up 6 to 9 percent a year, net prices are up 2 to 4 percent, and drug companies are spending record amounts lobbying legislators not to make any significant changes.
Shortly before the president’s State of the Union message, the administration proposed to eliminate some of the rebates drug makers pay to insurance companies in the Medicare program. Pharmacy benefit managers, middlemen in the drug supply chain who accept drug company rebates, usually for brand-name drugs under the Medicare and Medicaid programs, would lose legal protections under the proposal.
Drug makers use rebates to secure preferred placement for their drugs on an insurer’s formulary tiers.
The Trump administration claims eliminating that practice would save significant amounts for older people who have been paying high out of pocket costs. Whether the rule will be adopted is not clear, nor are the amounts of any projected savings for consumers.
Juliana Keeping, a spokesperson for Patients for Affordable Drugs Now, says the administration’s proposal “won’t lower sole source drug pricing for biologic drugs because there aren’t many biosimilars.” Those are drugs extracted from or semi synthesized from biological sources, and biosimilars are almost identical.
Mitchell’s organization would prefer to see Medicare use the International Pricing Index to decide how much to pay for Part B drugs – those administered in physicians’ offices and in hospital outpatient departments. Medicare has proposed such an index that it says would allow it to pay prices more in line with those in similar countries. Two other remedies are gathering interest among members of Congress and policy makers. Both have been around a long time, but the new push to do something about the high price of drugs may finally result in some movement toward passage.
One is to allow Medicare to negotiate prices for Part D drugs. Recall that the 2003 law that gave seniors a drug benefit said that Medicare could not negotiate prices with the drug companies. It’s a provision that has no doubt helped big PhRMA companies but increasingly has hurt beneficiaries.
The other is to limit patent protection, which would allow low-cost generics to come to market more quickly. That remedy has been kicked around for years, but perhaps public ire over high drug prices will make a difference this time.
Even though there’s a patient backlash against high drug prices right now, we will still see a bruising battle to enact some of the changes Mitchell’s group and others are advocating.
“PhRMA companies determine both what their list prices are and the size of the rebates they are willing to pay to obtain market access,” says Dr. Peter Bach, a physician and epidemiologist at Memorial Sloan-Kettering Cancer Center in New York City.
The drug industry will fight hard to keep it that way.