Congress has a 'time-limited window' to shake up drug pricing, employers, health groups say

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The call to action comes shortly after President Joe Biden inked an executive order targeting high prescription drug costs and anti-competitive practices in the pharma industry. (efetova/iStock/Getty Images Plus/Getty Images)

A chance for meaningful drug pricing reform is upon us, dozens of purchasers, healthcare and employer groups contend. But Congress needs to capitalize on its “time-limited” opportunity, or the problem could stagnate or worsen.

In a letter to a bipartisan group of lawmakers, groups comprised of Families USA, Lower Drug Prices Now, Patients for Affordable Drugs and more called on (PDF) Congress to empower Medicare and the Department of Health and Human Services (HHS) to negotiate drug prices, install price-hike limits and redesign Medicare Part D to slash costs for beneficiaries and taxpayers.

Given fresh movement in the reform sphere, such as Senate Finance Chairman Ron Wyden’s recently blueprinted (PDF) pricing principles and the reintroduction of a prominent bill, Congress now “has a unique and time-limited window for crafting meaningful drug pricing reform this year,” the groups wrote to the leaders of both political parties in the House and Senate.

If Congress doesn't act on the three pillars outlined in the letter, though, their efforts “will fail to meet the needs of the moment,” the groups wrote to Sens. Chuck Schumer and Mitch McConnell along with Reps. Nancy Pelosi and Kevin McCarthy.

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For Medicare pricing negotiations, those talks should be informed by R&D costs—including financial support from the government—plus net pricing data, cross-market sales, projected revenue, production costs and more, the groups said. 

Concerning Part D reform, the groups want to slash both out-of-pocket expenses and overall costs, which includes "holding the line" on consumers' insurance premiums, regardless of their coverage type or insurance status. 

American taxpayers, consumers and employers paid roughly $358 billion for prescription drugs in 2020, or about $1,100 for every adult and child, the letter states. The problem is getting worse, too, the groups argued.

Nearly 25% of Americans have trouble paying for their prescriptions, while about 30% say they've had to forego prescribed drugs because of the cost, the groups wrote.

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Pricing aside, the groups also took aim at anti-competitive behaviors that have grown out of the Hatch-Waxman Act, which lawmakers introduced seven years back to strike a balance between innovation and access to affordable drugs. In the ensuing years, "this finely tuned balanced has failed," the groups wrote, flagging the use of "patent evergreening" and "patent thickets" to scupper the entry of cheap generic competitors to brand-name drugs. 

They specifically flagged AbbVie's top-seller Humira, which is safeguarded by "more than 130 patents and counting," and pointed to Biogen's controversial Alzheimer's disease drug Aduhelm as a recent example of the current system that's turning out pricey yet "clinically-marginal drugs." Aduhelm bears an annual list price of $56,000. 

The call to action comes just a few days after President Joe Biden penned an executive order targeting high prescription drug costs and anti-competitive practices in the pharma industry. The president tasked HHS to draft a pricing strategy within 45 days. He also called for promotion of lower-cost generic and biosimilar drugs, and specifically enlisted the Federal Trade Commission to identify and tackle efforts to stymie copycat competition through "false, misleading, or otherwise deceptive statements” about those products.

Biden campaigned on the promise of lowering drug prices, but so far, the administration hasn't made any major progress on the issue.