AAFP Calls for Wide-ranging Approach to Lowering Drug Prices

Academy Urges HHS to Boost Access to Generic Drugs, for Starters

July 24, 2018 01:38 pm News Staff

A fast-rising tide of Americans with diabetes who require medical treatment, potential cost barriers separating children from crucial immunizations, drugmakers' strategic manipulation of patent details to delay a product's entry to the generic marketplace -- these are just a few of the challenges family physicians face as they prescribe medications for their patients.  

[doctor writing prescription and holding pill bottle]

They were, therefore, among the concerns outlined in the Academy's response(6 page PDF) this month to an HHS policy statement and request for information(www.gpo.gov) (RFI) on lowering drug prices and cutting out-of-pocket costs for consumers.

"The number and complexity of conditions, complaints and diseases seen in family medicine is far greater than those seen by any other physician specialty," said the letter, which was signed by AAFP Board Chair John Meigs, M.D., of Centreville, Ala. "Ensuring access to medications is an integral part of a physician's role as an advocate for their patients.

"Unfortunately, and too frequently, family physicians encounter patients who cannot afford their medications or adhere to treatment recommendations."

Story Highlights
  • Increasing access to generic drugs must be a top priority, the AAFP recently told HHS in response to a request for information on how to lower drug prices.
  • When considering ways to lower drug prices, the agency should embrace a "prevention first" approach that reduces the nation's disease burden.
  • The Academy warned against proposals "that might restrict patient access to essential health care services and drugs, especially in family physician offices," such as moving certain drugs from Medicare Part B to the Part D program.

A key obstacle to treatment, the AAFP noted, remains prior authorization protocols, which the Academy has already resolved to address. The July 16 letter to HHS cites a 2017 AMA survey indicating that 92 percent of respondents reported care delays due to prior authorizations, and 78 percent reported that prior authorizations could lead to treatment abandonment.

The AAFP's response to the RFI went on to outline 10 specific areas of concern for family physicians regarding drug costs, out-of-pocket spending for patients and HHS policy. Those areas are

  • Generic drug access,
  • Drug-pricing principles and priorities,
  • Off-patent drugs,
  • Site-neutral payments,
  • Value-based drug pricing,
  • Medicare negotiation authority,
  • Prevention first,
  • Transparency,
  • Medicare Part B drugs, and
  • Six protected drug classes.

Generic drug access

Given that generic products make up more than 89 percent of medications ordered by prescribers, "increasing access to these products must be a top priority," said the Academy.

"We are pleased that the administration's blueprint includes plans to prevent companies from using the Risk Evaluation and Mitigation Strategy process to create barriers for new generic manufacturing," the letter said. "The plan, however, did not address other important practices that contribute to high drug prices."

Specifically, the letter called for HHS to bring its policy in line with Federal Trade Commission and legislative standards regarding "reverse payment patent settlements." These so-called "pay-for-delay" practices -- in which pharmaceutical manufacturers delay manufacture of generics in exchange for settlement payments -- are recognized as anticompetitive and run counter to the Hatch-Waxman Act(www.everycrsreport.com).

The letter also addressed "patent ever-greening," a widespread practice in which even a minor variation in a drug product can extend the life of the drug's original patent. This, too, "should be addressed as a top administration priority," said the Academy.

Drug-pricing principles and priorities

As a member of the Campaign for Sustainable Rx Pricing, a nonpartisan coalition of medical organizations, insurers and hospitals committed to addressing drug price increases by balancing innovation and affordability, "The AAFP supports transparency and stronger regulatory enforcement to lower the cost of prescription drugs," said the letter. "The AAFP also supports the availability of affordable generic medications as a cost-effective substitute for many brand-name prescription medications."

Off-patent drugs

Citing Turing Pharmaceuticals' licensure -- and subsequent 5,556-percent price increase -- of a life-saving antiparasitic drug,(www.washingtonpost.com) the Academy wrote that Congress and federal officials should develop strategies to "address rising drug prices among older, off-patent drugs."

Site-neutral payments

The AAFP's letter stated that under Medicare Part B and in other circumstances, physicians are reimbursed at comparable levels for drugs they administer to patients, but facility fees when drugs are administered in hospitals or hospital-owned outpatient departments are far greater than those independent physician offices charge. Moreover, according to a 2015 study,(archinte.jamanetwork.com) visits to physicians in hospital outpatient departments cost an average $68 more than to those in stand-alone offices.

The Government Accountability Office has said that this type of "inconsistency in Medicare payment policy is not justified." Citing these and other points, the Academy asked HHS to address such inconsistencies.

Value-based drug pricing

Noting that two years ago, CMS proposed a value-based drug pricing demonstration project that would tie "payment for drugs to patient outcomes and cost-effectiveness rather than solely to the volume of sales," the AAFP lauded the agency's efforts to apply such common-sense, value-based payment (VBP) principles. "Physicians, hospitals and other Medicare providers are aggressively pursuing VBP models, and HHS should explore the applicability of VBP principles and models to the pharmaceutical industry," the letter said.

Medicare negotiation authority

In light of research data(jamanetwork.com) indicating that between 2004 and 2014, Medicare's share of U.S. drug expenditures rose from 2 percent of $193 billion in total drug spending to 29 percent of $298 billion in total drug spending, "the AAFP encourages HHS to take steps to ensure Medicare and Medicaid prescription drug programs can best take advantage of recent developments in value-based purchasing so all parts of the U.S. health care system benefit from market-based negotiating efforts to lower drug prices," the Academy told the agency.

Prevention first

Citing supporting data regarding diabetes, contraception and infectious diseases, the Academy wrote that HHS should "embrace a 'prevention first' approach when considering ways to lower drug prices by reducing the nation's disease burden." The letter emphasized that Americans of all ages, regardless of socioeconomic or insurance status, should have access to all recommended immunizations, for example, while also calling for adequate payment to physicians for vaccines and associated overhead.

Transparency

"Transparency policies do not directly lower drug costs but may provide more data that could help federal agencies and policymakers increase accountability and would allow physicians and patients to make more informed treatment choices," said the Academy in its letter. With 30 states already reviewing their own transparency laws, "the AAFP urges HHS to require pricing transparency, including for off-patent and generic drugs."

Medicare Part B drugs

The RFI asked respondents to highlight drugs or classes of drugs that could be moved from Medicare Part B to the Part D program. The AAFP's response warned against proposals "that might restrict patient access to essential health care services and drugs, especially in family physician offices."

Six protected drug classes

Finally, the AAFP reiterated its longstanding opposition to any change to Medicare formularies' protection of anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals and immunosuppressants for the treatment of transplant rejection.

"We recognize there may be noteworthy proposals under consideration that may result in lower costs but urge the administration to prioritize patient access to these essential drugs," the letter concluded.

Related AAFP News Coverage
In the Trenches blog: It's Still the Prices, Stupid
(7/17/2018)

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

AAFP to Congress: Expand Site-neutral Physician Payment
(2/16/2016)

More From AAFP
American Family Physician Editorial: How the FDA Ensures High-Quality Generic Drugs
(6/1/2018)