Proposals For Change

CSRxP has developed bipartisan, market-based solutions that promote affordability, competition, transparency and value to restore a functioning prescription drug market for all American consumers and taxpayers.

AFFORDABILITY

Too often patients experience the unfortunate and unfair choice between purchasing the medications they need to be well and paying for other necessities. Patients should never be presented with such a choice – especially today with so many people across the U.S. experiencing significant health and economic hardship due to the COVID-19 pandemic. Measures must be taken to improve prescription drug affordability for patients and taxpayers alike, especially while the nation continues to battle the COVID-19 pandemic and everyone across the U.S. will need access to acceptably-priced and affordable virus countermeasures.

  • Ensure universal access to affordable COVID-19 vaccines and treatments with full transparency on government investment in virus countermeasures. Policymakers must ensure that the COVID-19 vaccine is as affordable as the annual flu shot and reflects the substantial investments made by taxpayers, and that distribution policies guarantee all people across the U.S. equal access to the vaccine. Additionally, the administration should require transparency for pricing of the vaccine and policymakers should require that vaccine manufacturers disclose the price of their vaccine to other European governments.
  • Medicare drug price increases should not exceed the annual rate of inflation. To put Medicare on a more sustainable fiscal path and better ensure beneficiaries can affordably access the medications they need, price increases for drugs covered by Medicare Part B and Part D should not exceed the annual rate of inflation.
  • Make Medicare Part D more affordable. To make drug coverage more affordable for Medicare beneficiaries, the HHS OIG should allow Part D plans and pharmacy benefit managers (PBMs) to negotiate lower drug costs. Policymakers should also place an annual cap on Part D out-of-pocket spending. Additionally, Big Pharma should assume liability for at least 50 percent of total costs in the catastrophic phase. Health plans should also have more flexibility to manage high-cost Part D drugs.

TRANSPARENCY

Patients deserve open and honest drug pricing – clear and transparent information about the true costs of treatment, how manufacturers set prices and the actual cost of bringing drugs to market, particularly for high-cost drugs. Improving pricing transparency will enable patients to become actively involved in their healthcare decision-making and put pressure on Big Pharma to lower the prices of their excessively costly drugs.

  • Apply price transparency parity. Congress must enact policies such as the Prescription Drug Sunshine, Transparency, Accountability and Reporting (STAR) Act and the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act that will require manufacturers to publicly disclose pricing information and justify price increases for their high-priced drugs.
  • Guarantee a better return on taxpayer investments. While high prices are often justified based on the costs associated with R&D, there is virtually no public data showing a link between prices and development costs. Given the sometimes enormous profits that drug manufacturers can make from research funded by taxpayers, manufacturers should be required to disclose research and development costs for drugs, including identifying which portion of research they alone funded versus how much was funded by other entities.
  • Issue pricing transparency reports based on pricing data submitted by drug manufacturers. Prices for drugs are clearly rising at rates that far exceed inflation and the level of any rebates or discounts offered by manufacturers to purchasers. HHS should provide an annual report to the public based on manufacturer-reported data. Additionally, HHS should frequently update the Medicare and Medicaid Drug Spending Dashboards that show spending by these federal health programs on prescription drugs.
  • Scrutinize direct-to-consumer (DTC) advertising requirements. At a minimum, all DTC advertising should include list prices and list price increases so that consumers have a more transparent understanding of the actual price of a drug.
  • Limit third-party patient assistance schemes primarily paid for by Big Pharma that mask actual drug prices and raise costs. To increase transparency and lower costs, policymakers should increase scrutiny of independent third-party patient assistance organizations. Additionally, use of patient assistance programs funded by drug makers should be prohibited in commercial health insurance and the current regulatory ban on use of drug manufacturer assistance coupons in federal health programs should be codified.

COMPETITION

Pharmaceutical companies today abuse the patent system to prevent more affordable drugs from disrupting their monopolies over the drug marketplace. Bringing more competition to the prescription drug market will give consumers more choices and more control – resulting in lower prices and improved access.

  • Shorten the exclusivity period for biologics and promote policies to increase the uptake of biosimilars. Policymakers must end the gaming of the patent system that now regularly prevents competitors from coming to the market when the exclusivity period expires. Regulatory policies should encourage market entry and uptake of biosimilars in federal health programs like Medicare and Medicaid and the FDA should take additional steps to promote broader use of biosimilars.
  • Increase oversight of patent settlements. Policymakers should encourage robust oversight and opposition to settlements that are deemed anti-competitive and prevent generics and biosimilars from entering the market in a timely manner.
  • Target exclusivity to truly innovative products. Currently, pharmaceutical manufacturers can extend market exclusivity protections by seeking approval for a “new” product that is essentially the same as the original. Prohibiting such tactics will bring consumers more options and lower prices more quickly. Anti-competitive pricing schemes should be closely monitored by federal agencies and prosecuted if violations of antitrust laws are found. That’s why Congress must enact policies such as the Reforming Evergreening and Manipulation that Extends Drug Years (REMEDY) Act that will target abusive practices by Big Pharma to extend patents.
  • Apply stricter scrutiny to patent applications and thwart patent abuse by curbing patent “estates” and “thickets.” Biopharmaceutical companies have abused and manipulated the patent laws by creating patent “estates” and “thickets” to extend market exclusivity for their products far beyond the times their original market exclusivity periods have ended. Anti-competitive abuses of the patent system by drug manufacturers should be stopped by enacting laws that curb these practices and by having appropriate federal agencies apply scrutiny to potential patent abuses.
  • Target orphan drug incentives. Policymakers should take steps to ensure that the integrity of the Orphan Drug program – meant to encourage the development of medications to treat rare diseases – is maintained. The Orphan Drug Act’s incentives should be awarded only to those products that are actually innovative and treat true orphan diseases with small patient populations, so that drugs do not maintain unfair market monopolies.
  • Foster competition by curbing citizen petitions. Delays in the FDA approval process often prevent competitors from coming to market in a timely manner. That’s why Congress must enact policies such as the Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics (Stop STALLING) Act which would find the submission of a citizen petition to prevent or delay entry of a generic or biosimilar illegal under antitrust laws. The FDA should also be provided with sufficient resources to speed up competition – particularly for lifesaving drugs and drugs with limited or no generic competition.
  • Strengthen post-market surveillance. Currently, expedited drug approvals often involve small clinical trials with a narrow patient population and trials are not regularly reported publicly. Once a drug enters the market, research into the long-term efficacy and side effects should continue with specific timelines and reporting requirements. Even if a product is not approved, manufacturers should be required to report data for all trials that summarize non-identifiable demographics and participant characteristics, primary and secondary outcome results, and adverse event information.

VALUE

Patients deserve reliable information regarding whether a drug’s “therapeutic outcome” – or its health benefit – is in line with its price. This information is critical to moving America’s prescription drug market toward a system that empowers doctors and patients to choose medications based on the value they provide – not the “value” set by drug manufacturers.

  • Expand research on treatment comparative effectiveness and value. Policymakers should increase funding for private and public efforts such as the Institute for Clinical and Economic Review (ICER), a non-profit organization that evaluates the evidence of the value of medical tests and treatments, and the Patient-Centered Outcomes Research Institute (PCORI), a government-sponsored, non-profit institute focused on producing research to better inform patients, caregivers, payers and healthcare providers on the comparative effectiveness of various health care interventions. Investments in objective information are critical for physicians, patients and payers as more and more high-priced drugs are introduced into the health care system.
  • Require drug manufacturers to conduct comparisons of new products to existing ones. Through comparative effectiveness research (CER) studies, manufacturers would have to demonstrate their product is better than others, so that physicians and patients can make smart decisions about the value of different treatments, particularly those with very high costs. Many other countries currently require drug manufacturers to provide CER studies. They should be expanded in the U.S. to reduce spending on unnecessary or ineffective treatments.
  • Require innovative payment and incentive structures that promote value in government health care programs. Medicare purchases prescription drugs for its beneficiaries, but is not structured to accommodate value-based payment models. Steps should be taken to ensure Medicare can best take advantage of recent developments in value-based purchasing.

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