Life Science Compliance Update

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January 27, 2017

Politico Healthcare Briefing: What’s Next for Drug Costs?

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Late last year, Politico Pro’s Health Care Team, along with CVS Health, held a conversation on the future of prescription drug costs, and how to reduce healthcare spending under a new administration. The briefing featured a panel of health care industry experts: Peter Bach, MD, Director of Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center; Jenny Bryant, Senior Vice President of Policy and Research at PhRMA; Ceci Connolly, President and CEO at the Alliance of Community Health Plans; and Chip Davis, President and CEO of the Generic Pharmaceutical Association (GPhA).

The panel discussion focused on the report, “Tackling High Drug Costs in the Trump Era,” and was followed by a discussion with Representative Jan. Schakowsky, concerning efforts on Capitol Hill to reform health care spending.

Panel Discussion

Dr. Bach argued that there was a “fundamental disconnect” between efforts to reduce costs of coverage and bring top treatments to patients. He expressed support for drug price negotiations under the Affordable Care Act, stating that such efforts have saved taxpayers over $10 billion. He also warned that if high-deductible health plans remain popular, tools will need to be developed to indicate to physicians when their prescribing patterns are negatively affecting their patients and have open conversations about the affordability of the drugs they are prescribing.

Ms. Bryant expressed hope that lawmakers can work together to reach an agreement to “move forward to advance pro-market and pro-science solutions.” She stated that drugs have the potential to avert more health care spending for a patient in the future than they cost in the present, and challenged the idea that rising pharmaceutical costs are to blame for increased health care spending. Ms. Bryant challenged the premise that the repeal of the Affordable Care Act (ACA) would be a “looming problem,” instead stating that price negotiations for pharmaceuticals under government programs would not be exclusive to the ACA. She noted that cost-sharing was actually counter-productive for the health care industry, and that the perceived value of a drug is extraordinarily personal, and it is nearly impossible to determine the “average value” for pharmaceuticals.

Ms. Connolly discussed her belief that the drug pricing debate is quickly fading as the new administration approaches, noting that many of President-Elect Trump’s larger ideas are taking focus away from the debate, and that the core of the drug pricing issue (the lack of transparency) should be more thoroughly addressed. Ms. Connolly declared that the debate no longer focuses on specialty drugs, but now also includes drugs for common ailments. She discussed reauthorization of the prescription drug user fee law as a potential vehicle to address pricing transparency, but that event transparency may not be enough to reign in health care spending. She requested that lawmakers focus on mandating transparency so that patients can make more informed decisions with their physicians about which drugs they are prescribed, and encourage affordable treatment options.

Mr. Davis cautioned lawmakers and others that a policy issue as complex as the drug pricing debate cannot be solved with a broad approach, and that by allowing complete transparency of the pharmaceutical industry could wind up forcing competition out of the industry. He encouraged lawmakers to include all aspects of the market in discussions surrounding transparency, and to not discount the opinions of the drug manufacturing industry.

Discussion with Representative Schakowsky

Representative Schakowsky expressed her belief that lawmakers should hold President-Elect Trump to his promises regarding health care and work together to pass legislation that discourages price increases and promotes transparency in drug pricing. She reminded attendees that Trump favored allowing Medicare to negotiate drugs and the re-importation of prescription drugs as two methods to combat rising drug prices and spending. She mentioned her legislation, the FAIR Drug Pricing Act, drafted with Senator Tammy Baldwin, which attempts to shed light on how drug prices are initially decided and influenced, and where profits are being spent.

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