Senators urge Obama to ramp up pressure against high drug prices
- A coalition of 8 U.S. Senators on Wednesday sent President Barack Obama a letter urging him to take more aggressive steps to tackle drug price hikes and the high costs of both branded and generic prescription medications.
- The signatories were: Sens. Al Franken (D-MN), Sheldon Whitehouse (D-RI), Jack Reed (D-RI), Tom Udall (D-NM), Angus King (I-ME), Sherrod Brown (D-OH), Tammy Baldwin (D-WI), and presidential contender Bernie Sanders (I-VT).
- Lawmakers included a range of policy changes that Obama has already endorsed and could include once again in his upcoming FY2017 budget proposal, including: Medicare Part D drug price rebates for low-income beneficiaries; giving the HHS Secretary authority to negotiate the prices of biologics and particularly pricey medications; and prohibiting pharma's "pay-for-delay" arrangements. But the senators also included a raft of new possible proposals.
In general, the biopharma industry is already adamantly opposed to many of the policies which Obama presented in his FY2016 budget, including direct government negotiations over high drug prices. But the new proposals laid out in the letter are also sure to invite plenty of scrutiny.
For instance, the senators write that Obama should tackle the newer trend of rising generic drug costs by issuing policies that encourage the entry of generics into the marketplace. They also said that the president could bolster price transparency in the market and "prevent companies from gouging prices on essential medicines."
You can read the full letter here:
Furthermore (and likely of even more concern to the industry), the senators urged Obama to mimic HHS' new "pay-for-value" reimbursement initiatives for Medicare when it comes to Rx reimbursements.
"Private-sector initiatives testing the value of new therapies are already underway, and showing promise," the lawmakers wrote. "However, these efforts have confronted challenging societal questions, including whether a value metric should consider impact on the federal budget, which requires public-private engagement." They go on to cite ideas such as bundled payments, indication-specific pricing, and reference pricing as avenues for potential reform.
Some in the biopharma sphere have admitted that a pay-for-value system may be necessary, including executives from firms such as Sanofi and Novartis (Sanofi EVP Suresh Kumar even said so much in an interview with BioPharma Dive earlier this month).
But the big question for these players is how such a pay-for-value system would be implemented, and how industry stakeholders would come together to discuss such arrangements.
The letter is yet another in a barrage of events showing that the pharmaceutical industry's pricing practices will continue to be scrutinized during the 2016 election cycle. The House Government Reform and Oversight Committee will be holding a hearing on Thursday in which Valeant CEO Howard Schiller (and potentially Martin Shkreli) are expected to testify on drug pricing.