There is no appetite on Capitol Hill or at the White House to impose price controls on the biopharmaceutical industry, said former California Democratic Congressman Henry Waxman, the co-parent of the law that gave birth to the generic drug industry.
But the latest proposals from Congress and President Donald Trump aimed at lowering Americans' and the government's drug costs and spending signal that some sort of a compromise could soon be within reach, Waxman told reporters during a Feb. 26 briefing hosted by The Commonwealth Fund, a Washington-based nonpartisan, nonprofit healthcare group.
Few of the provisions in the Bipartisan Budget Act of 2018, enacted Feb. 9, and Trump's fiscal 2019 budget request are new, Waxman said, noting that most have been kicked around Capitol Hill for years, with some even proposed by former President Barack Obama, though now with a few tweaks.
"There's no shortage of ideas," said Waxman, who along with Sen. Orrin Hatch, R-Utah, was co-author of the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, which gave the U.S. Food and Drug Administration the authority to approve generic medicines.
Unfortunately, very few of those proposals would get at the root of the problem: the high prices of prescription medicines, argued the former House member, who now runs a Washington-based strategic communications and public relations company.
"Lowering spending doesn't mean you are lowering prices," Waxman said.
The U.S. is experiencing historic increases in prescription drugs prices, said Bill Corr, who served as the deputy secretary of the U.S. Department of Health and Human Services, or HHS, from 2009 to 2015 during the Obama administration and is now a senior adviser at Waxman Strategies.
He noted that Trump has "repeatedly advised the country that he intends to significantly reduce drug prices" — even claiming last week that his new HHS secretary, Alex Azar, was "really setting the world on fire now with your lowering of prescription drug prices," a feat he has yet to achieve.
Some positive effects
The Feb. 9 spending bill will have some positive effects for Americans' and the government's pocketbooks, Corr said.
A provision that changes how Medicaid reimburses for drugs that have undergone minor changes from the original formulation requires makers of those products to pay higher rebates if their annual pricing increases are above inflation, he noted.
"It may sound small, but it would save $6.5 billion over 10 years," Corr said.
Also significant is the measure that closed the Medicare Part D prescription drug program's coverage gap — known commonly as the doughnut hole — a year earlier by increasing the manufacturer discount from 50% to 70%.
Congress also extended its same coverage gap discount program to include biosimilars, making those lower-cost alternatives to biologics — large molecules derived from natural sources, such as microorganisms or plant or animal cells — more affordable to patients, Corr said.
Those changes could save Medicare big money and protect millions of Americans from high drug costs, he said.
Among Trump's 2019 budget proposals is a provision that would let up to five states participate in a demonstration project in which their Medicaid programs could negotiate directly with manufacturers on drug prices.
While that proposal could lower Medicaid's costs, "it should be balanced with appropriate access to the treatments patients need," Corr advised.
Trump's budget also included a measure intended to address the misclassification by brand-name drugmakers of their products in the Medicaid rebate program, a flaw that has resulted in the government receiving smaller payments from biopharmaceutical companies than they owe.
The president also wants to give the FDA greater authority to ensure that generic-drug makers awarded 180 days of market exclusivity for being the first to file applications do not "unreasonably and indefinitely" use that incentive to block other generics from entering the marketplace beyond that protection period.
Price-lowering strategies
But Corr argued that a more effective policy his group has proposed would be to end the exclusivity of the 180 days if the first generics manufacturer delays going onto the market as the result of a settlement with a brand-name company — deals known as pay-for-delay.
Charles Phelps, a professor and provost emeritus at the University of Rochester, urged Congress to adopt recommendations made in November 2017 by the National Academy of Medicine, which he said would address the drivers of high drug prices.
Congress specifically needs to stop the practice of "evergreening," in which companies seek new patents or extensions on existing drugs to extend the exclusivity well beyond what was ever intended, Phelps argued.
"Additional patents are not significant improvements in a product itself and the way it affects people clinically," Corr insisted. "We need to re-examine that."
