Summer Setbacks: The Long Route to Lower Drug Prices Hits Some Potholes


When Washington returned from the winter holiday break in January, it seemed everyone was referring to lowering drug prices.

Energized with a new type of freshmen and some weeks from the office, members of Congress were ready to wag their fingers at drug company executives and pitch their fixes. President Mr . trump had unveiled some of his methods to a problem he said would be a top priority, and much more would follow.

Now it's July, and whether it's the humidity or even the lobbyists, Washington – and the prospects for substantial change – look hazy. Two Trump administration's primary targets, slashing rebates to drug supply middlemen and requiring prices in drug ads, fell apart in recent weeks.

But others live on. Let's walk-through probably the most significant proposals to lessen pharmaceutical costs – and see where they wound up.

Capping price hikes under Medicare? A tough sell.

On Tuesday, Sen. Chuck Grassley (R-Iowa), chairman from the Senate Finance Committee, and also the committee's top Democrat, Sen. Ron Wyden of Oregon, released the details of a sweeping intend to control drug costs under Medicare and Medicaid.

One of the very most significant proposals in the plan would cap price increases on brand-name drugs and biologic drugs included in Medicare to ensure they do not outpace inflation, and triggering rebates when they do.

The proposal would start by doing your research for an “anchor” price set on July 1, 2021 (or, for brand new drugs, the date they were first marketed), and adjusted for inflation, according to Grassley's office.

Under Medicare Medicare part b, the prices could be with different drug's average sales price; under Part D, the costs would be based on a drug's market price.

If a drugmaker boosts the price of its drug a lot more than the rise in inflation, it would owe Medicare the difference between your prices like a rebate.

Proponents say that change could shield more Americans from the kinds of eye-popping price hikes which have sparked a public outcry in recent years. But Republicans will probably oppose the idea, that they claim comes down to government price controls.

Medicaid already applies this strategy and has a tendency to pay better prices on drugs. A study in the HHS inspector general discovered that Medicare might have collected as much as $2.4 billion in rebates on just 20 brand-name drugs covered by Part B in 2010 had drugmakers been required to spend the money for same rebates they pay Medicaid.

Dr. Aaron Kesselheim, a professor of drugs at Harvard School of medicine who researches the results of intellectual property laws on drug development, pointed to the problematic insufficient restrictions dictating how drugmakers set prices.

“I think that's a very promising idea, whether it sees the light of day,” he explained in an interview before the bill was unveiled.

The Senate Finance Committee will margin the balance Thursday.

Buying your drugs from Canada? Bipartisan, and Trumpian, support.

Importing prescription medications, a concept which has waxed and waned through the years, has received backing in this Congress, along with the White House. Grassley, with Sen. Amy Klobuchar (D-Minn.), one of the seven Democratic senators running for president, introduced legislation in January that will allow Americans to import cheaper pharmaceuticals from Canada for personal use.

Trump has encouraged Florida Gov. Ron DeSantis in his effort to start an importation program there.

But perhaps the most intriguing development came July 11, when Health and Human Services Secretary Alex Azar – an old pharmaceutical company executive who had opposed drug importation – suggested an administration plan might be within the works.

“My thinking happens to be, if we're going to have importation, we have to make sure the safety of the drug supply in the United States,” Azar told reporters, adding he believes things have “changed quite substantially” since the idea was discussed during George W. Bush's presidency.

Azar served like a deputy secretary of Health and Human Services under Bush.

Those changes, specifically in international distribution, “could open the doorway to safe approaches,” Azar said. “And so the president and that i are committed to importation and making that actually work, and we're focusing on that now.”

Tying prices here to prices abroad? Stay tuned.

Earlier this month, Trump said the administration was working on a “favored nations” policy by which drug prices would be capped at the lowest price paid internationally.

The Office of Management and Finances are already reviewing an administration proposal for an “international pricing index” pilot project, by which Medicare would base the costs it pays for certain drugs on prices in other industrialized countries.

The issue dovetails neatly with Trump's “America First” ideology, using the president railing against the idea that other countries' citizens pay under Americans for the same drugs. He announced the proposal last October, shortly prior to the midterm elections.

It also runs afoul of the traditional conservatives' devotion towards the free market, though. Grassley said in June that he opposes the pilot project, that they suggested could stifle innovation.

But with Americans paying so much more than other countries for brand-name drugs, something's reached give, said Dr. Gerard Anderson, a health policy professor at Johns Hopkins University in Baltimore. “That's simply not long-term sustainable,” he said.

Rebate rule? We hardly knew ye.

For months, pharmacy benefit managers (PBMs), the middlemen who negotiate drug prices for insurers, were the target of bipartisan bashing. But this month, Washington abruptly backed off, as the Trump administration withdrew its proposal to eliminate some rebates collected by PBMs in their work for government health plans, including Medicare's Part D drug benefit.

In January, HHS proposed passing those rebates along to Medicare and Medicaid beneficiaries as discounts at the pharmacy counter. PBMs would receive a fixed fee for his or her services.

It had “the potential to function as the most significant switch to how Americans' medicine is priced at the pharmacy counter, ever,” Azar said then, explaining it would eliminate a practice which was driving up drug prices, specifically for seniors.

The secretary punted the rebate issue to lawmakers, who “have more tools than we all do.” The initiative would be expensive, and Medicare beneficiaries would likely feel a few of the burden. He said: “We're not going to put seniors at risk of their premiums rising.”

But Congress shows no real interest in obtaining the ball. In May, the Congressional Budget Office estimated the HHS proposal would cost the federal government an additional $177 billion over 10 years.

Now perhaps the biggest threat to PBMs is based on a sprawling package in the leaders of the Senate Health, Education, Labor and Pensions Committee. The balance from Sens. Lamar Alexander (R-Tenn.) and Wa state (D-Wash.) would ban “spread pricing” – a PBM practice of charging health plans more than they reimburse pharmacies for drugs, allowing them to collect the main difference as profit.

Help for generic drugmakers? There's still hope.

When you are looking at lowering prices, this is mostly of the arguments echoed by progressives and conservatives alike: Brand-name drugmakers are suppressing competition in downright unsavory ways.

The Alexander-Murray plan features a slew of proposals that will make it harder for those manufacturers to block generic competitors and maintain a virtual monopoly. A CBO estimate released Tuesday concluded the package's proposals to lessen drug prices would save the government about $3.8 billion, and increase federal revenue by about $700 million over Ten years.

Their package includes the CREATES Act, a bipartisan bill targeted at curbing anti-competitive practices against generic drugmakers. Among other changes, it might make it simpler for generic drug manufacturers to acquire samples of brand-name drugs to make use of within their research, thus helping to obtain versions available on the market faster.

Kesselheim of Harvard School of medicine said he thinks the myriad proposals on generics are generally good ideas to help affordable prices.

“They're each like small, individual arrows,” he said. “And taken as a whole, I believe they may be useful. But we'll just observe how most of them actually come to pass.”

Art of the drug deal? We'll see.

Speaker Nancy Pelosi along with other House Democratic leaders spent recently hearing their members' ideas (and complaints) about the ambitious intends to lower drug prices. But they are still quietly focusing on an agenda that would permit the secretary of Health and Human Services to negotiate prices on probably the most expensive drugs – as well as on behalf of Americans, not only those with government health coverage, such as Medicare.

Putting aside progressives' concerns it doesn't go far enough, the proposal faces stiff opposition among Senate Republicans, who say they be worried about its impact on Medicare.

Skeptics include Grassley, whose views as head from the Senate Finance Committee might make or break any drug pricing proposal that finds its method to the Senate.

Still, House Democratic leaders have been in conversations with White House officials for a while concerning the plan's broad strokes, according to a Democratic aide, raising the far-fetched prospect of an alliance between Pelosi and Trump.

Drug prices in ads? Preempted.

An eleventh-hour ruling from the federal judge this month blocked one of the Trump administration's most prominent efforts to reduce drug costs: a guide requiring drugmakers advertising any drug that costs more than $35 a month to include its list price in commercials. Administration officials hoped the necessity would shame the makers into lowering costs.

But three companies – Merck, Amgen and Azar's former employer, Eli Lilly – sued in June to stop the rule, claiming it violated their First Amendment rights and wasn't within the government's authority to want them to disclose list prices. The judge agreed with the latter argument.

Anderson, the Johns Hopkins professor, was among the researchers on the recent experiment that showed participants were not as likely to search out a costly drug when its price was disclosed.

“I think that one would have made a difference,” Anderson said in an interview.