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Latest reform brouhaha requires a united response focused on real solutions.
The Trump administration recently fired off four executive orders targeted at curbing pharmaceutical prices. Despite opportunities to launch similar initiatives in the last couple years, the president is likely maneuvering the issue to the forefront as the election inches closer.
It’s hard to imagine legislation enacting any of the measures by Nov. 7; the executive orders are likely only symbolic as they are notoriously limited, can be challenged in court, and include no details on implementation or timing. Nevertheless, the effort and rhetoric are worthy of inspection.
Industry leaders have been given one month to propose alternative plans, and will have an opportunity to respond at an upcoming meeting at the White House—one likely designed to maximize media and public attention on the president’s professed commitment to lower drug prices.
This time, the CEOs who make the list should come out blazing with a cogent, consistent message when asked to step up to the mic on the Rose Garden lawn. There has never been a more opportune time for biopharma CEOs to step forward and make their case. The world is depending on our industry to innovate and develop therapeutics and vaccines to end the COVID-19 pandemic and save lives. These are literally the keys to reopening global economies (see my June column here).
Drug pricing comes up every election cycle but it’s always an uphill battle to get political momentum to drive change.
Today, however, drug pricing reform is one of the few areas that currently has bipartisan support and appears to be common ground for Republicans and Democrats, which means it is in fact potentially dangerous. While the economy is beginning to recover, and the stock market is strong, many on Main Street are struggling, some quite severely, with unprecedented unemployment, and fear of the future. A discussion about the high cost of healthcare and specifically drugs, which many pay for out of pocket, is a surefire way to fire up the public across the country.
We now have medicines and therapies that are priced at over $2 million and these facts drive headlines.
Presidential candidate Joe Biden has drafted aggressive drug pricing measures, including an international reference price to cap US payments for newly developed drugs, and is also supportive of drug reimportation. His fellow Democrats would certainly like to advance their approved bill, “Lower Drug Costs Now.” Senate Majority LeaderMitch McConnell called the bill “socialist” and vowed to block it.
Many are suggesting that Trump’s executive orders are consistent with those in the Democrat’s bill.
Dating back to October 2018, the president has always favored drug reimportation, which is essentially importing price controls already in effect in another country. The insulin and EpiPen imbroglios have become beacons of drug pricing excess, which serve to reinforce the common perception that drugs are not only over-priced but predatory and that manufacturers are making egregious profits.
However, drug pricing legislation matters this time around because of the signal and noise with regard to legitimate threats to the biopharma industry, innovation, the American public, and the overall economy.
“The industry would do well to focus on pay-for-performance initiatives, and now is the time to find common ground across the pharma ecosystem, which includes payers, distributors, and PBMs, as blaming each other isn’t likely to resonate with Congress or the public,” says Meghan Fitzgerald, PhD, public health professor at Columbia, private equity investor, and author of Ascending Davos.
It is time for industry leaders to come together and hit this issue straight on with real solutions that can work for patients, regulators, and Washington, and maintain the vital integrity of our great industry. Pricing models must be transparent and defendable. We can and have to do better this time than we have in the past. Near misses on big, dangerous issues (with the assumption that nothing will happen) can no longer be a strategy.
Barbara Ryan is Founder, Barbara Ryan Advisors, and a member of Pharm Exec’s Editorial Advisory Board