CSRxP Testimony for the Record: Senate Finance Committee Hearing on Rx Prices

Jun 25, 2018

The Campaign for Sustainable Rx Pricing today released testimony for the record submitted to the Senate Finance Committee in advance of tomorrow’s hearing, “Prescription Drug Affordability and Innovation: Addressing Challenges in Today’s Market.”

The testimony applauds the Trump Administration recently-released Blueprint to Lower Drug Prices as a welcome step in the right direction towards reining-in out-of-control drug prices, while putting forward a number of suggestions to enhance the Administration’s proposals, and noting a number of issues that would be counterproductive to our shared goal of lower drug prices for all Americans.

The full testimony can be found here, and excerpts are below:

Applauding the Administration’s Efforts to Reduce Drug Prices

CSRxP welcomes HHS’s “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs” as a good first step in the effort to reduce needlessly high list prices and lower overall prescription drug costs for consumers and taxpayers. The Blueprint includes a number of thoughtful and creative ideas on innovative methods to reduce prescription drug spending and we would like to work with the Committee and HHS to ensure that those policy ideas are successfully implemented.  However, we believe that more can and should be done to bring prices down.  Policies must be implemented to address the root of the problem: brand drug makers set list prices too high and increase them at excessively high rates. 

On Increasing Transparency in Prescription Drug Pricing:

CSRxP strongly agrees with HHS that improving transparency in prescription drug pricing is a critical component to making prescription drugs more affordable for consumers and taxpayers.  Among other benefits, increased transparency will support and better enable transformation of the U.S. health care system toward one based on value; will better inform patients, prescribers, and dispensers of actual drug costs as they determine the most appropriate treatments to meet individual patient needs; and encourage drug makers to justify the high prices they set for their products.

On Thwarting Anti-Competitive REMS Abuses by Brand Drug Makers

The FDA uses the Risk Evaluation and Mitigation Strategy (REMS) program to allow products with potential safety issues to enter the market.  When employed effectively and appropriately, REMS improves patient safety and makes accessible medicines that otherwise might not be available due to safety concerns.  However, as described in the HHS Blueprint, drug manufacturers often engage in abusive, anti-competitive behaviors that manipulate REMS to block generic drug companies from obtaining samples of brand drugs under the guise of addressing patient safety concerns, effectively preventing them from pursuing the research needed to bring less expensive generic drugs to market.  CSRxP appreciates the leadership of FDA Administrator Gottlieb in using administrative action to help curb these abuses.  However, we believe more can be done and therefore urge the Committee to encourage and welcome further actions by the FDA to thwart anti-competitive abuses of REMS by brand drug makers identified in the Blueprint, including:

On Fostering a Robust Market for Biosimilar and Interchangeable Biologic Products

Biosimilars and interchangeable biologic products have the potential to expand treatment options and substantially lower prescription drug costs for consumers and taxpayers.  For example, one study found that 11 biosimilars already approved for sale in Europe and elsewhere could generate approximately $250 billion in savings over 10 years if they were available in the U.S.  Thus, CSRxP welcomes implementation of policies identified in the Blueprint that promote and incentivize the development of biosimilars and interchangeable biologic products to compete against high-priced specialty brands and lower costs for consumers and taxpayers, including:

On Promoting Value-Based Arrangements in Federal Health Programs

Currently Medicare and Medicaid purchase prescription drugs for their beneficiaries, but not generally in a manner to accommodate value-based payment models.  CSRxP agrees with HHS that steps should be taken to ensure these programs can best take advantage of recent developments in value-based purchasing so that all parts of the U.S. health care system benefit from market-based negotiating efforts to lower drug prices.  In particular, certain value-based arrangements such as indications-based pricing have the potential to lower drug costs and would benefit from more comparative effectiveness research on the value of various treatment options.  Public and private institutions such as the Institute for Clinical and Economic Review have introduced important information into the public domain on the value of particularly high-cost efforts and should receive additional funding for this critical work.

On Policies That Ultimately Will Not Lower Prescription Drug Costs for Consumers and Taxpayers

While CSRxP supports many of the policies under consideration, we are concerned that certain policies identified in the Blueprint unfortunately will have the unintended consequence of increasing – not decreasing – the costs of prescription drugs for most consumers and taxpayers.  While we very much share the Department’s goal of lowering out-of-pocket costs for patients and reducing government spending on prescription drugs, we are very concerned that certain policies will harm consumers and further strain Federal and State health budgets.  In particular, policies that would limit or prohibit rebates in Medicare Part D or establish long-term financing models for purchase of prescription drugs in Federal health care programs, will harm consumers and further strain Federal and State health budgets. 

On Additional Policies to Slow the Unsustainable Growth in Prescription Drug Costs

Brand biopharmaceutical companies employ a variety of anti-competitive tactics to delay competition and keep lower cost generic drugs and biosimilars from entering the market.  These inappropriate and unfair abuses effectively extend the period of market exclusivity for brand products and, consequently, cause consumers to continue experiencing needlessly high out-of-pocket expenses and Federal and State governments to engage in unnecessary spending on prescription drugs.  To help combat these anti-competitive tactics by brand drug makers, CSRxP urges the Committee and the Administration to work together to adopt the bipartisan, market-based solutions described below, which inject more competition into the market particularly after brand products already have benefitted from market exclusivity post FDA approval.