Perspectives On Drug Costs: Government Patent-Use Power Should Be Employed Against Pharma’s ‘Strategic Holdout’
A selection of opinions on drug costs from around the country.
The Washington Post:
A Simple Way For The Government To Curb Inflated Drug Prices
When the government launches an ambitious public-works project — say, building a railroad or airport — one problem it can face is a “strategic holdout.” People who know that the government needs their land to complete a project may demand a price for their property far beyond its actual value. Today, we face a similar problem with certain high-cost drugs. (Zain Rizvi, Amy Kapczynski and Aaron Kesselheim, 5/12)
Health Affairs Blog:
Is High Prescription Drug Spending Becoming Our New Normal?
Lately it seems as if specialty drugs are everywhere. While it used to be that only a small number of patients were treated using these expensive drugs, manufacturers are increasingly developing specialty products to treat conditions that affect much larger populations over a longer period of time. One example is PCSK9 inhibitors, a new type of cholesterol-lowering drug that cost more than $14,000 per year. Although this product is currently indicated for those with familial hypercholesterolemia and certain patients with heart disease, the patient population is expected to eventually expand to as many 15 million people. PCSK9 inhibitors are also used on a chronic basis, meaning patients and payers will feel the costs associated with these products—estimated to be as much as $150 billion annually—for years. (Leigh Purvis and Crystal Kuntz, 5/17)
To Fix High Drug Prices, Stop The Merger Madness
Sky-high prescription drug prices have angered both politicians and patients, and for good reason. Medication prices rose by more than six times the rate of inflation between 2006 and 2013. While drug pricing is a complicated issue, the co-occurrence of soaring drug prices and an all-time record year for mergers in the pharmaceutical and biotechnology industry may be more than mere coincidence. 2015 saw the largest number and value of acquisitions ever in pharma and biotech—168 announced deals with 30 transactions exceeding $1 billion. The total value of mergers and acquisitions in 2015 was more than $300 billion, easily surpassing 2014’s record of $250 billion. (Jeffrey Pfeffer, 5/17)
The Washington Times:
Assessing Blame For High Drug Prices
Americans’ spending on prescription drugs has soared over the past few years. Hillary Clinton has blamed “price gouging” by drug companies and called for more Washington control. A far more likely culprit is actually Obamacare. Obamacare was sold on the false promise that costs would come down if Americans gave Washington more control over their health care. Instead, costs have soared in every aspect of health care, including prescription drugs. According to an April study by IMS Health, net spending on medicines has risen 21 percent since the health care law passed in 2010. (John Barrasso, 5/16)
The New England Journal Of Medicine:
Drug Regulation And Pricing — Can Regulators Influence Affordability?
Public debate in the 1990s over drugs’ clinical toxicity has given way to concerns about their financial toxicity. Although drug regulators aren’t supposed to be concerned with pricing, they’ve been drawn into an acrimonious debate over the cost of medicines. At the European Medicines Agency (EMA), we often hear conflicting arguments: high and inflexible regulatory standards drive up the cost of pharmaceutical research and development (R&D), thereby increasing drug prices; regulators license products even when the data are insufficient for assessing their value and allow drug makers to overcharge; more generics, biosimilars, and me-too drugs are needed to create a dynamic market that will keep prices down; me-too drugs should be discouraged, since they offer no added benefit to patients and lead to overutilization and higher spending; and regulators shouldn’t allow drugs on the market that no one can afford. (Hans-Georg Eichler, Hugo Hurts, Karl Broich and Guido Rasi, 5/12)
The Buffalo News:
Congress Must Act To Help Restrain Soaring Drug Prices
Drug prices continue to rise at an alarming and seemingly irrational rate. As anyone with a chronic health condition well knows, paying for prescription medications is an increasingly difficult challenge demanding immediate and sustainable solutions. Fortunately, Congress has begun holding hearings designed to rein in costs. The topic will no doubt heat up as a campaign issue leading up to the November election, and a number of key stakeholders in the health care industry are joining forces to help find remedies. (Martin Burruano, 5/16)
The Wrong Way To Reduce Drug Prices
Recent reports of pharmaceutical companies sharply increasing their prices for existing drugs highlight the issue of drug pricing. Unsurprisingly, public outrage over price hikes led to increasing calls for European-style price controls. Less-stringent proposals would require pharmaceutical companies to disclose and justify price hikes. While attractive, these measures are misguided, as they do not address the underlying causes of high drug prices: the high cost of drug development. ... Exorbitant drug prices are clearly a problem; however, price controls are unlikely to solve it. While price controls may provide immediate financial relief to some patients, they will also reduce future research and development spending and lead to fewer drugs being developed. They will also make investment in drugs that treat less common diseases unprofitable. Thus, the policy may provide some short-term benefit, but it would impose substantial future costs. (Sherzod Abdukadirov, 5/11)
Drug Price Control: How Some Government Programs Do It
Drug pricing is having its moment. Thousand-dollar pills to treat Hepatitis C, eye-popping price hikes for common generics, and surging overall spending on pharmaceuticals have rung alarm bells from coast to coast. ... Proposed treatments for the drug pricing epidemic are varied, but some call for government to do more. While others resist the idea of government involvement, the federal government, in fact, already employs a number of effective tools for reducing the prices of drug purchased by certain public programs. These fall into two broad categories: Price controls, usually in the form of required discounts off of the average price paid by other purchasers. Negotiated pricing, in which the government wields its market power to bargain for favorable rates from pharmaceutical suppliers. ... it’s worth reviewing the nature and track record of the government’s existing drug price reduction efforts. (David Blumenthal and David Squires, 5/10)