Will prescription drugs get cheaper this year? An expert rates the odds.
As a 25-year veteran of the drug-pricing battle on Capitol Hill, I’m skeptical anything ambitious is coming. Still, there’s new momentum for change.
Health care affordability ranks first or second among issues voters want Congress to tackle in 2019, according to numerous polls following the 2018 midterm elections. While Democrats and Republicans have very different opinions on hot button issues such as the Affordable Care Act and Medicare for All, they unite when it comes to anger over pharmaceutical costs.
President Donald Trump has a plan to cut prescription drug prices, Democrats of all stripes have campaigned on tackling this. Should we expect to see big changes this year? As a 25-year veteran of the drug-pricing battle on Capitol Hill, I’m skeptical anything ambitious will be coming. Even so, there’s new momentum for change. Here are my predictions for action on drug pricing in the new 116th Congress:
Require drug firms to list prices in TV ads
In October, Health and Human Services Secretary Alex Azar unveiled a proposal to require pharma companies to publish a drug’s list price in TV ads that blanket the airwaves. The drug industry has argued that the information could be misleading because patients often don’t pay the list price. Even after these concerns are shared with the American public, a new Kaiser Health poll finds that a majority still supports it although by smaller margins.
The administration now appears amenable to a plan floated by industry group PhRMA that would provide more context to what a patient might actually pay at the counter. Assuming that the administration is able to overcome First Amendment challenges, I give it an 80 percent chance of becoming reality.
Allow Medicare to negotiate drug prices
On the campaign trail in 2016, Trump embraced allowing the government to negotiate with pharmaceutical companies to lower drug prices for seniors. Democrats have introduced a series of bills that would accomplish this goal and have vowed to make this a top priority. But while a remarkable 92 percent of Americans support the idea and virtually every other country utilizes this approach, I highly doubt anything this ambitious will become reality any time soon.
The Trump administration would like to move forward on a pilot program to tie pricing for certain costly Medicare drugs to what other countries pay — which is often dramatically lower than what U.S. customers pay. But even before the regulation has been formally proposed, big pharma has launched an all-out assault. Considering that doctors, hospitals and patient groups have also come out against it, I would give it a practically zero chance of moving forward.
Put restrictions on drug coverage
The Trump administration has also proposed allowing Medicare to restrict what drugs would be covered by health plans that negotiate prices on behalf of the 45 million seniors who participate in the Medicare Part D program. The tactic, commonly used in the private sector and in other countries, is to avoid the use of very expensive medications when there are cheaper versions that are therapeutically equivalent. Despite the drug industry’s impressive ability to kill measures like this, I would give it an 80 percent chance of becoming law in a watered-down form.
Let people buy medicine from other countries
Every new session of Congress, a bipartisan group of lawmakers introduces bills to allow Americans to buy pharmaceuticals from Canada. While the bill sponsors often change, the legislation always ends up in the proverbial trash heap. The drug industry and some medical professionals have raised concerns about counterfeit medicines ending up in the hands of patients.
Could 2019 be different? The stars are aligned for action. Food and Drug Administration Commissioner Scott Gottlieb has formed a work group to explore the option of importing drugs in certain instances of price gouging. The work group’s mandate is very limited, but no one expected that an agency overseen by a longtime advocate of the pharmaceutical industry would even consider this idea.
Sen. Chuck Grassley, R-Iowa, a maverick and the new chairman of the Senate Finance Committee, will be pushing for a more ambitious plan to allow importation from Canada and will have plenty of support from congressional Democrats. Even the esteemed American Medical Association recently endorsed drug importation from Canada. Nonetheless, I give importation no more than a 25 percent chance. If it passes, it will be permissible only if patients travel north to get their medicine and pick it up in small quantities at licensed brick-and-mortar stores.
Weaken monopoly power
Under the U.S. system, drug companies are granted patent protection and market exclusivity to produce new medicines that treat some of our most debilitating diseases. This is an important way to encourage innovation and risk-taking, but many academics and policymakers have pointed out that drug companies often abuse this monopoly power.
A whopping 78 percent of patents approved by the FDA are for existing drugs rather than new ones. Drug manufacturers, already entitled to up to 20 years of patent protection, need only make slight modifications to get additional protections. To make matters worse, many brand name manufacturers will pay a generic company to delay introduction of cheaper alternatives.
Led by Grassley and Sen. Amy Klobuchar, D-Minn., lawmakers have introduced several bills to spur competition. More than 100 House Democrats have even proposed to strip a company’s patent rights when it refuses to lower prices. But don’t count on any type of patent legislation to become law in the 116th Congress. A much better bet is the CREATES Act, which would speed generic drugs to market by giving generic companies early access to samples for comparison tests. I give it a 95 percent chance of passage.
Is there anything that will definitely happen in 2019? In 2018, the drug industry spent a potentially record sum lobbying Congress. There is a 100 percent guarantee they will surpass that milestone this year.