Biden sets a 45-day countdown for 'comprehensive' plan to tackle drug pricing — while championing some familiar policies
Should the pharma industry be bracing for new battles on drug pricing?
In an executive order that might serve as a prelude for what’s to come, President Joe Biden spotlighted some familiar policy proposals while directing the HHS to “issue a comprehensive plan within 45 days to combat high prescription drug prices and price gouging.”
The EO announcement comes on the heels of a call by House Speaker Nancy Pelosi to attach drug pricing reform to the current budget bill. The central figure behind a sweeping bill to tackle drug prices that’s passed the House, Pelosi publicly rejected the industry’s argument that lowering prices would harm innovation.
Biden’s preliminary plan, released Friday afternoon, was painted in much broader strokes, and notably excluded the most radical ideas, such as empowering Medicare to directly negotiate prices or pegging US list prices to an international index.
Rather, framing the main issue as a lack of competition, Biden focused on three specific measures engaging a trio of government agencies: The FDA shall work with states and tribes to safely import drugs from Canada; the HHS shall increase support for generics and biosimilars; and the FTC shall ban “pay for delay” or similar types of arrangements designed to stifle new market entrants.
From the White House:
One strategy that drug manufacturers have used to avoid competing is ‘pay for delay’ agreements, in which brand-name drug manufacturers pay generic manufacturers to stay out of the market. That has raised drug prices by $3.5 billion per year, and research also shows that ‘pay for delay’ and similar deals between generic and brand name manufacturers reduce innovation — reducing new drug trials and R&D expenditures.
All three directives echo policies or approaches that have been championed by his predecessor Donald Trump or other politicians across the aisles.
With the exception of his controversial endorsement of a Covid-19 vaccine IP waiver, Biden has been seen as cordial to the biopharma industry, especially in contrast with Trump’s often confrontational style. The government spent the past few months mainly tying administrative loose ends — his HHS withdrew two requests for proposals days ago on the reimportation of insulin and personal importation of prescription drugs, citing a dearth of response — leaving Congress to sort out policy positions.
That could well change in 45 days when the HHS lays out its plan. Or not.
The largest pharma players, a fact sheet on the new EO states, reaps average annual profits of 15% to 20%, much higher than the 4% to 9% reported by the largest non-drug companies.