No Dearth of Legislation on Tackling High Drug Costs

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By Bronwyn Mixter

Lawmakers are pushing various ideas to combat high prescription drug prices.

Some lawmakers have already introduced legislation or said they plan to introduce legislation on this issue. Solutions include allowing Medicare to negotiate with pharmaceutical manufacturers to lower prices, increasing access to generic drugs and importing less expensive drugs from other countries.

Drugmakers are under heavy scrutiny by lawmakers, consumers, medical professionals and the president for their pricing practices. On Jan. 31, President Donald Trump told drugmakers at a White House meeting they are charging too much for their products. The increased focus on drug prices was spurred by situations where the prices of older pharmaceutical products increased significantly. Most recently, generic drugmaker Mylan Inc. came under attack for increasing the cost of its EpiPen allergy injection by 400 percent in nine years.

Bloomberg Intelligence analyst Brian Rye told Bloomberg BNA in a Feb. 2 e-mail “legislation aimed at giving the federal government direct authority over Medicare Part D drug prices has little chance of near-term passage by a Republican-led Congress. Other measures may get more consideration, particularly those that can be perceived as speeding up the introduction of generic competitors.”

The Pharmaceutical Research and Manufacturers of America (PhRMA) said in a Feb. 3 statement provided to Bloomberg BNA in response to the drug pricing bills that “instead of focusing on proposals that will not benefit patients, we should work together on pragmatic solutions to engage and empower patients and families with the information they need: clear information about out-of-pocket costs and common-sense rules to prevent discrimination and remove barriers to accessing care.”

Generic Drug Development

Sens. Susan Collins (R-Maine) and Claire McCaskill (D-Mo.) Feb. 2 reintroduced the Increasing Competition in Pharmaceuticals Act, which would expedite the Food and Drug Administration’s review of certain generic drug applications. The bill (S. 297) also would create a priority review voucher that would be awarded to the sponsor of a successful application for a medical shortage or sole-source drug that makes it to market. Priority review vouchers can be used to speed the FDA’s approval of a future drug and the vouchers are valuable, in part, because they can be sold to other companies.

S. 297 was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee for consideration.

Also, Reps. Gus Bilirakis (R- Fla.) and Kurt Schrader (D-Ore.) Jan. 30 introduced a bill, the Lower Drug Costs Through Competition Act (H.R. 749), intended to increase generic drug development and lower the costs of pharmaceuticals.

House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) said at a Feb. 2 hearing that his committee will consider H.R. 749 soon.

Walden said H.R. 749 “would require the FDA to prioritize and expedite the review of generic applications for drug products that are currently in shortage or where there are too few manufacturers on the market.” He also said the bill would increase transparency on the generic drug application backlog at the FDA.

The legislation also would create a priority review voucher that the FDA would award to a manufacturer that brings a generic drug to market when there isn’t any competition for the brand product.

Bilirakis and Schrader said in a Jan. 30 press release their legislation will address situations when there is little incentive to compete with a brand drug because there is a small patient population for the drug and the costs of development are too high. For example, in 2015, Turing Pharmaceuticals increased the price of Daraprim from $13.50 to $750, they said. There was no generic drug on the market at the time of the price hike. Daraprim is used to treat certain infections in HIV patients.

A spokesman for the Generic Pharmaceutical Association (GPhA) who asked not to be identified told Bloomberg BNA in a Feb. 2 e-mail about H.R. 749 that the bill “is a step in the right direction. We appreciate the widespread recognition that generic medicines keep drug costs down. At the same time, there are a number of policies that can increase generic competition beyond the bill as drafted, doing more to address the systemic challenges posed by rising brand and specialty drug costs.”

Pay-for-Delay Settlements

On Jan. 12, Sens. Charles Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) reintroduced the Preserve Access to Affordable Generics Act (S. 124), which would crack down on settlements that allow branded pharmaceutical manufacturers to pay generic drug companies to delay entry of a generic drug into the market.

These patent litigation settlements, called pay-for-delay settlements or reverse payments, occur when brand-name drug companies seek to eliminate competition by paying generic manufacturers not to sell their products for a period of time. Grassley and Klobuchar have introduced this bill before, but it has never advanced.

“This anti-competitive practice results in artificially high drug prices for consumers and taxpayers, and short-circuits laws in place to expedite access to less-costly medications,” Grassley said in a statement when the bill was introduced. “This bill would prevent drug companies from engaging in these abusive dealings and ensures more timely access to affordable medicines for patients and taxpayers.”

The bill was referred to the Senate Judiciary Committee for consideration.

PhRMA doesn’t agree that pay-for-delay settlements should be banned.

“Patent settlements generally permit generic medicines on the market earlier than patent expiration, generating significant savings for consumers. In many cases restricting patent settlements can delay generic entry. And at this time, the Congress has already given the FTC [Federal Trade Commission] that ability to review and evaluate individual patent settlements,” PhRMA said in its statement.

Expedited Reviews, Inspections

Klobuchar and Sen. Mike Lee (R-Utah) Jan. 23 also introduced the Short on Competition Act (S. 183), which would allow the secretary of health and human services, the FDA’s parent agency, to grant expedited reviews and inspections, and temporary importation, when there are fewer than five competitors for drugs that have been on the market for at least 10 years. Before the FDA approves a new drug application, it must inspect the facility where the product is made.

S. 183 also would give the FDA explicit authority to allow temporary importation from certain countries when the HHS secretary determines there is a drug shortage.

“If drug companies think new competitors can quickly enter the market, maybe they’ll think twice before raising prices in the first place,” Klobuchar said. “Injecting more competition into the marketplace will lead to more affordable prescription drugs for American consumers.”

The bill was referred to the Senate HELP Committee for consideration.

Drug Importation

Additionally, Klobuchar and Sen. John McCain (R-Ariz.) Jan. 9 reintroduced the Safe and Affordable Drugs from Canada Act (S. 92), which would allow individuals to import prescription drugs from Canada.

In 2013, average U.S. prescription drug prices were twice as expensive in the U.S. as they were in Canada, the senators said when the bill was reintroduced.

Under the bill, imported prescription drugs would have to be purchased from an approved Canadian pharmacy and dispensed by a licensed pharmacist. The bill was referred to the Senate HELP Committee for consideration.

Importation Could Harm Patients

PhRMA has concerns that importing drugs from other countries could harm patients. “The importation of unapproved and potentially counterfeit medicines into the United States jeopardizes our secure medicine system and presents a serious risk to public health,” PhRMA said.

“We’ve already seen reports of unapproved medicines, including opioids, reaching the United States and endangering Americans, placing increased burden on law enforcement to prevent counterfeit medicines and other counterfeit products from harming consumers,” the drug industry group said. “Further, these imported drugs would not be subject to the U.S. Food and Drug Administration’s robust safety requirements, and there would be no way to trace the country of origin for the imported products. Even Canada has said it would be unable to guarantee that U.S. citizens would receive products that are safe, effective and of high quality.”

PhRMA said “guaranteeing patient safety is crucial, and we must have policies that ensure patients safely have access to the medicines they need.”

Medicare Price Negotiation

Rep. Peter Welch (D-Vt.) Jan. 4 introduced the Medicare Prescription Drug Price Negotiation Act (H.R. 242), which would allow Medicare to negotiate lower drug prices with pharmaceutical companies. The bill was referred to the House Energy and Commerce and Ways and Means committees for consideration. The Senate version of the bill (S. 41) was introduced by Klobuchar on Jan. 5.

Also, Sen. Bernie Sanders (I-Vt.) said in a Jan. 31 statement that he and Rep. Elijah E. Cummings (D-Md.) are drafting legislation to allow Medicare to negotiate with drug manufacturers for lower prices. The bill also would allow the importation of less expensive drugs from other countries like Canada.

“The root of this problem is that we are the only major country not to negotiate drug prices with the pharmaceutical industry. You can walk into a pharmacy today and the price could be double or even three times what you paid for the same medicine a year ago,” Sanders said.

Sanders said he looks “forward to working with President Trump on this issue if he is serious about standing up to the pharmaceutical industry and reducing prices.”

PhRMA said in the statement provided to Bloomberg BNA “there is significant price negotiation that already occurs within the Medicare prescription drug program. Large, powerful purchasers negotiate discounts and rebates directly with manufacturers, saving money for both beneficiaries and taxpayers.” The large, powerful purchasers refer to private plans, the group said.

“The Congressional Budget Office has said the Secretary of HHS would not be able to negotiate lower prices than already exist without restricting access to medicines for beneficiaries,” PhRMA said. “Proposals to fundamentally alter the structure of the program could jeopardize access to affordable prescription drug coverage for seniors and people living with disabilities, driving up premiums, reducing choice and restricting coverage.”

Orphan Drug Exclusion, Drug Samples

Welch also said in a Jan. 30 statement he plans to introduce or reintroduce three other bills on drug prices.

The first bill, the Closing Loopholes for Orphan Drugs Act, would limit the 340B drug discount program’s orphan drug exclusion to apply only when drugs are used to treat the rare diseases or conditions they were developed to treat. The 340B program helps safety-net providers such as hospitals obtain discounted drugs from manufacturers. Orphan drugs, which treat rare diseases that affect 200,000 or fewer Americans, are excluded from the 340B program.

Welch’s legislation would limit the exclusion to apply only when the drug is being used for the orphan condition or disease. But it would allow the drug to be discounted under the 340B program when it is being used for a wider, nonorphan indication. Welch previously introduced this bill in 2016.

The second bill that Welch will reintroduce, the Fair Access for Safe and Timely (FAST) Generics Act, would prevent branded drug manufacturers from using risk evaluation and mitigation strategies (REMS) to delay generic drug launches.

The FDA sometimes requires a REMS plan from a drugmaker to ensure the benefits of the product outweigh its risks. Welch’s legislation would prohibit branded drug manufacturers from using REMS to keep generic drugmakers from obtaining samples of branded drugs needed for bioequivalence testing of the generic product.

The Generic Pharmaceutical Association has said it supports the FAST Generics Act. But PhRMA said it is concerned the bill “could undermine these FDA-approved programs intended to address very serious risks to patients.”

Welch also plans to introduce legislation to require federal regulators “to transparently compare the effectiveness of new medications with products already on the market.” The goal of this legislation will be to ensure the price of prescription drugs reflects their effectiveness for consumers, he said.

To contact the reporter on this story: Bronwyn Mixter in Washington at bmixter@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

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