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Critics slam White House analysis for ignoring expensive drugs

A White House report that claims U.S. drug prices dropped by 0.7% over the past year is flawed because the analysis left out the most expensive types of medicines sold in the U.S., critics said.

The analysis from the White House Council of Economic Advisers, disclosed on Oct. 2, failed to include the prices of medicines administered in doctors' offices and hospitals, drugs for complicated diseases sold by specialty pharmacies and newly approved therapies, said Walid Gellad, associate professor of medicine and director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh.

SNL ImageA report from the White House claims U.S. drug prices have dropped, but critics say the report is flawed.
Source: Thinkstock

Those medicines are generally the most expensive drugs in the U.S., Gellad wrote in an Oct. 3 tweet.

He noted that even the CEA said the measure it used — the consumer price index for prescription drugs, or CPI-Rx — had a number of limitations, most notably, that it only included medicines sold at retail pharmacies.

"The report measures pricing trends by high-volume drugs dispensed at pharmacies rather than by the high-priced drugs that are causing rationing, bankruptcy and suffering," said Peter Maybarduk, director of the Access to Medicines program at the consumer advocacy group Public Citizen.

In an Oct. 3 statement, Maybarduk called on the White House to work to get Republicans on board with the "modest but meaningful" legislation to lower drug prices from Sens. Chuck Grassley, R-Iowa, chair of the Senate Finance Committee, and Ron Wyden, D-Ore., the ranking member.

He also said President Donald Trump should keep the promise he made on the 2016 campaign trail to press Congress to permit Medicare to directly negotiate with drugmakers on prices.

"People are still waiting for that real relief," Maybarduk said.

While the reduction in drug prices in the White House report did not apply to all prescription drugs, the decrease in the costs for retail pharmacy medicines under the CPI-Rx metric was still relevant, Gellad said.

"There is definitely a trend happening among common medications," he said.

Progressive Democrat demands changes to Pelosi bill

Meanwhile, Rep. Lloyd Doggett, D-Texas, chair of the House Ways and Means Health Subcommittee, said that while he found "much to merit support" in the recently unveiled drug pricing bill from Speaker Nancy Pelosi, D-Calif., he said it had "significant limitations that require improvement."

The progressive Democrat said his greatest concern is that Pelosi's bill would not repeal the 2003 prohibition against Medicare negotiating drug prices with manufacturers.

"While it creates a major exception to that prohibition, it will remain against federal law to negotiate the price of a multitude of medications," Doggett wrote last week in a letter to the 129 Democrats who signed on to his drug pricing legislation — the Medicare Negotiation and Competitive Licensing Act (H.R. 1046).

Pelosi's legislation would allow the government to set a maximum price for the Medicare program and the commercial insurance market on at least 25 medicines and up to 250 that lack competition in the U.S.

But that would mean the legislation's mandate "can be fully satisfied by negotiating prices for a mere 25 drugs each year," Doggett said. "And for these few negotiated drugs, no price savings apply to the uninsured, leaving this most vulnerable population with no relief."

Democratic leaders want the Pelosi legislation marked up by three committees after lawmakers return from their break next week, which Doggett noted would leave only a narrow window for improving the bill.

"My objective is not to let the perfect get in the way of the good, but to ensure that the good we seek actually reaches those whom we serve," the Texas congressman said.

SNL ImageBIO CEO Jim Greenwood
Source: The Biotechnology Innovation Organization

BIO chief expects smaller drug pricing actions

While time may run out for Congress to adopt the large Pelosi or Grassley-Wyden drug pricing packages this year, that may not stop lawmakers from passing some smaller measures to rein in medicine costs in their fiscal 2020 spending legislation, said Jim Greenwood, president and CEO of the Biotechnology Innovation Organization.

"I think you are going to see something in there on drug pricing, partly because they're going to need a certain amount of money to increase spending in certain areas," Greenwood said during an Oct. 4 interview on C-Span's Newsmakers. "They expect our industry to yield some of it, and we will, as we always do. It will be $30 billion or $40 billion. And to get that money they will probably put in some legislation that goes to drug pricing."

Greenwood urged Congress and the White House to agree on putting caps on Medicare beneficiaries' out-of-pocket spending on prescription drugs.

Both the Pelosi and the Grassley-Wyden bills include out-of-pocket caps — $2,000 and $3,100, respectively.

"There is no good reason to have high out-of-pocket costs for drugs," Greenwood said. "It's just stupid."