Regulation, Competition Needed to Lower Drug Prices, Says Panel

August 02, 2017 09:25 am Michael Laff Washington, D.C. –

Seven years ago, David Mitchell was diagnosed with myeloma, an incurable but treatable blood cancer. The combination of drugs he requires costs $20,000 per injection -- $440,000 for one year of treatment -- and regularly changes as the cancer becomes resistant to current treatment.  

David Mitchell, president and founder of Patients for Affordable Drugs, discusses the effects of high drug prices on patients during a panel discussion hosted by the Alliance for Health Policy.

Shocked by the high price of prescription drugs, Mitchell now works to lower their costs and increase pricing transparency.

"I am completely dependent upon innovation and new drugs for my survival," said Mitchell, who is president and founder of Patients for Affordable Drugs. "But drugs don't work if people can't afford them."

Mitchell joined other health policy experts July 28 for a panel discussion(www.allhealthpolicy.org) titled "Prescription Drug Affordability and Innovation" hosted by the Alliance for Health Policy (formerly the Alliance for Health Reform).

Some patients try to deal with high drug costs by cutting medication into smaller doses, but panel participants said real solutions will require a combination of government regulation, public action and market competition.

Mitchell said Congress could help by giving Medicare the authority to negotiate prices directly with pharmaceutical companies, thereby reducing the secrecy surrounding how much insurers pay for medications. Mitchell cited pending legislation that could assist patients. The Creating and Restoring Equal Access To Equivalent Samples Act(www.congress.gov) would help generic and biosimilar medications enter the market faster by prohibiting companies from blocking access to the large sample quantities that manufacturers of generic medications require for testing. And the FDA Reauthorization Act,(www.congress.gov) which passed the House and awaits action in the Senate, calls for waiving application fees for generic and biosimilar drugs that are awaiting agency approval.

Henry Waxman, who represented parts of California in the U.S. House for 40 years and is now chairman of Waxman Strategies, suggested changing federal law to permit states to operate their own formularies for Medicaid drug pricing. He cited a range of reasons why drug prices are high. For example, not only do annual increases add to the high prices of new drugs, but brand-name manufacturers pay generic manufacturers to hold off on bringing lower-cost versions to market.

"We know the American public is outraged at the high price of drugs," Waxman said. "We know that people are being overcharged so they can't even afford them."

Waxman and other panelists praised work that FDA Commissioner Scott Gottlieb, M.D., has done to turn the agency's attention to the issue, including pledging to expedite the review of a backlog of 4,000 generic drugs that are awaiting approval.

"In the past, the FDA said they were not going to look at those issues, but the new commissioner recognizes there is a role for FDA in dealing with high prices," Waxman said.

Steve Miller, M.D., M.B.A., senior vice president and chief medical officer of Express Scripts, pointed to competition as one solution to the problem of high prices. His company conducted a study that found transitioning 11 selected drugs to biosimilars that cost 30 percent less would save $250 billion, and Miller said that despite widespread belief to the contrary, lower prices can exist alongside innovation. "You can have both," he said.

Whatever the solution, the United States must address the issue. Prescription drug costs take 10 cents out of every dollar spent on U.S. health care, and the United States accounts for 33 percent of world spending on prescription drugs despite accounting for only 4 percent of the world's population.

"Prescription drugs are the most frequently accessed part of the health care system," said Joel White, president of the Council for Affordable Health Coverage. "You go to the pharmacy once a month; you don't go to the hospital once a month."

Related AAFP News Coverage
AAFP Joins Campaign to Push Back Against Rising Drug Prices
(4/7/2017)

Leader Voices Blog: Unreasonable Drug Prices Force Patients to Skip Meds
(10/5/2016)