WASHINGTON, DC — President Trump today gave a highly-anticipated speech on his Administration’s plans to lower drug prices. He railed against high prices and a rigged system, and we appreciate that he brought the rhetorical heat. But we must judge this set of proposals based on the substance and the standard the president set himself in his State of the Union Address: “Prices will come down, watch.”
“Today’s announcement contains some good, some bad, and some missing components to lower drug prices,” said David Mitchell, a patient with incurable cancer and founder of Patients For Affordable Drugs. “We hope to work with the Administration to strengthen the policies that work, add those that are missing, and remove the idea that other countries should pay more because they negotiate with drug corporations.”
Looking at a few specifics of today’s announcement, here are the good, the missing, and the ugly:
- Action to prevent drug corporations from blocking cheaper generics: We applaud the Administration’s efforts to deter brand manufacturers from unreasonably and indefinitely blocking generic competition.
- Transparency into drug prices in pharmaceutical advertisements: This is a step in the right direction. We encourage the administration to work to terminate the tax deductions for pharmaceutical direct-to-consumer advertising expenses.
- Capping out-of-pocket costs for Part D beneficiaries at the catastrophic level: For the 1 million Americans with exceptionally high costs, this proposal would provide meaningful financial relief. However, it’s important that this proposal be coupled with additional future action that lowers the list price of drugs so as to offset any potential premium increases.
- Part B reforms: The current reimbursement structure of ASP+6 incentivizes more expensive drugs. We welcome action by the Administration to change that structure across the program so the incentive is to provide the best drug — not the most expensive drug.
- Requiring PBMs to act in the best interests of patients and outlaw gag clauses: Three pharmacy benefit managers control about 75 percent of the drug market. Americans can’t tell if these corporations provide value in the form of rebates for patients or if they keep rebates to increase profits, because PBMs negotiate deals in secret. We applaud the Administration’s proposal to outlaw gag clauses, which are used to stop pharmacists from telling patients about the best deal at the pharmacy counter.
- Direct negotiations as the President promised on the campaign trail: The proposals today are a slew of technical changes, but it is not clear how they will lower list prices. The proposals aim to “hold drugmakers accountable for their price increases,” and “reserve certain Part D incentives only for drug makers that stop raising prices,” but the proposals do not articulate how that happens.
- A clear set of proposals to stop Big Pharma patent abuse: We hope the administration will support a bipartisan package of bills to stop patent abuse and allow Hatch-Waxman to work as intended under law. These bills could include the Grassley-Klobuchar legislation to stop pay-for-delay abuse, the Cotton-McCaskill bill to limit transfer of drug IP to sovereign entities, the Grassley-Leahy bill to end REMS abuses, and the McCain-Baldwin bill to bring transparency to drug prices.
- Targeting other countries when we should target Big Pharma: Other countries are not freeloading — they negotiate with drug corporations, and President Trump accurately diagnosed that America should do the same. There is absolutely no evidence that raising prices in other countries will cause Big Pharma to lower prices here. Prices must come down in America, not go up in other countries.
- Encouraging outcomes pricing deals between drug companies and insurers. Outcomes pricing doesn’t lower drug prices. It allows drug companies to continue to set high prices. Outcomes-based purchasing has been tried in Italy and it didn’t work. Reimbursements from drug corporations represented on average less than 1 percent of the Italian regulator’s total spending on drugs between 2013 and 2016.
We are grateful that patients had the chance to meet with Administration officials in the lead up to the speech. We appreciate that two of our patient advocates were invited to attend the Rose Garden event today. We look forward to continuing to work with the Administration and Congress on bipartisan solutions to lower the prices of prescription drugs.
Patients For Affordable Drugs advocates who attended today’s speech included Pam Holt and Sue Lee.
Sue Lee from Crestwood, Kentucky is a retired executive assistant who worked in health insurance for years. She lives with plaque psoriasis and had been on Humira, an AbbVie drug, for over 4 years prior to her retirement last year at the age of 75. Humira was a miracle drug for her, but upon retirement she was going to have to pay over $10,000 a year for her Humira. She does not want to empty her savings to pay for Humira, so she has stopped taking it. Plaque psoriasis has no cure, so Sue will continue to suffer with the disease.
Pam Holt from Granger, Indiana is a widow, and a retired teacher. She is currently living with multiple myeloma, an incurable but treatable cancer. In order to keep her cancer at bay, she takes Revlimid, a Celgene drug. Her copay for Revlimid is $640 per month. Last year she took on debt in order to afford the drugs. She had to refinance her home recently to retire that debt—it was three years from being paid off.