Politicians of all stripes have run on promises to lower drug prices over the years, and outgoing President Donald Trump was no different. Fast-forward four years—past several attempts to rein in drug costs—and pricing dynamics largely remain the same.
Now, the issue will be President Joe Biden’s to handle. While the COVID-19 pandemic will be the new administration's “first, second and third” priority, said Rachel Sachs, law professor at Washington University in St. Louis, there are reasons to expect drug pricing action down the road.
It just might not be as aggressive as some advocates might hope. Lawmakers could find common ground on "low hanging fruit" on drug pricing, another expert argued, but measures such as Medicare pricing negotiations remain a long shot.
The public overwhelmingly supports action. A recent poll from the Harvard T.H. Chan School of Public Health and Politico found that drug pricing action is Americans’ second highest priority for the new government behind tackling the COVID-19 pandemic. In all, 87% of respondents said the issue is “extremely important.”
David Mitchell, founder of Patients for Affordable Drugs, said the U.S. is “looking at the best environment for passage of meaningful legislation to lower drug prices that we have seen in many, many years.”
The Georgia Senate runoffs—which Democrats won in both cases—“changed the landscape completely,” Mitchell said in an interview last week. Across the country, lawmakers on both sides of the aisle ran on the drug pricing issue, he said, and with the “Senate now in the hands of the Democrats, those promises can be realized.”
Likely pricing attempts
In 2019, the House of Representatives passed their ambitious H.R.3 bill—which would have allowed Medicare to negotiate drug prices and apply those lower stickers to private insurance. Something similar could take shape during the Biden term, Sachs said. The bill also included out-of-pocket caps in Medicare and more.
Alternatively, senators Ron Wyden and Chuck Grassley had been working on legislation that called for rebates when drugmakers raise prices above inflation in Medicare and Medicaid, plus lower out-of-pocket costs. Wyden, set to chair the Senate Finance Committee, plans to focus on drug prices this year, Politico reports.
While Republicans in the Senate are “not excited” about Medicare drug pricing negotiations, measures like Medicare Part D reform and penalties for extreme price hikes could be “palatable” for GOP lawmakers, Sachs said.
The results from the Senate runoffs in Georgia “change what is possible,” Sachs said. As the majority leader, Sen. Mitch McConnell was “reticent” to bring any pricing bills to the floor, she said. The change in Senate leadership, including on committees, could open that door.
Walid Gellad, M.D., director of the the University of Pittsburgh's Center for Pharmaceutical Policy and Prescribing, said via email he thinks there is a “very high chance” of legislation "eventually" passing in Congress and being signed by Biden. The legislation will likely resemble the Senate Finance Committee bill, Gellad said. "Given the limited majority in the Senate,” he doesn’t see a proposal like Medicare pricing negotiations “having a strong chance.”
Plus, there's “low hanging fruit” in Medicare Part D, according to Stacie Dusetzina, associate professor at Vanderbilt’s department of health policy. Streamlining the benefit design or capping patient costs could be an easy target for lawmakers. Redesigned plans could make it “more predictable what a patient would pay and try to incentivize lower prices,” Dusetzina said.
As for potential timing, Sachs noted the government will need to reauthorize the Prescription Drug User Fee Act in 2022. It’s a “must-pass bill” that could carry some drug pricing provisions this time around, she said. Both Sachs and Mitchell said drug pricing reform could generate savings Congress could use to pay for other government priorities.
The pharma industry’s response to the COVID-19 pandemic could complicate things, though, as Dusetzina points out. The industry rushed vaccines to the market in record time, and that “may play into decisions about how aggressively to pursue drug pricing reform,” Dusetzina said.
While Dusetzina doesn’t see Trump’s 2020 executive orders on drug prices sticking around, his push to reduce prices in Medicare based on lower costs abroad helped “normalize the concept that there are evaluations to help with negotiations,” Dusetzina said. One of Trump's executive orders called for lower prices in Medicare based on lower prices in other developed countries, some of which use drug evaluations to inform pricing talks.
Using drug assessments such as those by Institute for Clinical and Economic Review (ICER)—and groups in various countries—to negotiate prices is a “big departure” from the current system in the U.S., she said, but “maybe we’re closer to it than we have been.”
Instead of a broad, industrywide approach to drug evaluations, she said there could be opportunities to use limited government programs to explore the concept, Dusetzina said. She's a member of ICER’s Midwest Comparative Effectiveness Public Advisory Council.
Like Sachs, Dusetzina said drug pricing action will be “complicated” by the Biden administration’s other priorities such as controlling the pandemic and stabilizing the economy.