Over the last five months I’ve spent more time watching video streams out of the nation’s capital than I did in all of the past five years (thank you C-Span). Lawmakers, overall, have been very obliging to the biopharma industry on a bipartisan basis. And when there was irregular news to report from DC, it generally dealt with issues like an extended period of exclusivity for biologics or fresh demands for swifter drug reviews coupled to new incentives.
Ironically, the drug industry proved one of the very few areas where Republicans and Democrats generally found it easy to cooperate on a bipartisan basis.
That all changed the day Donald Trump was sworn in as president.
Trump made publicly whipping biopharma a regular spectacle. The industry had too many overseas jobs, he declared with populist fervor, didn’t invest in America and more than anything, engaged in ripping off the country with outrageously high drug prices.
Pharma executives are a sensitive sort when it comes to pricing discussions in general, and you’d be hard pressed to find any major player who isn’t painfully aware of the new pricing environment.
The big discount price on sarilumab from Sanofi and Regeneron reflects in part the impact Trump has had. Most of the biggest companies have also come up with some new method for calculating acceptable drug price increases. That didn’t happen in a vacuum.
So some industry insiders may have found it odd that Leerink’s Geoffrey Porges thinks that the whole Big Pharma assault from DC may well just peter out, leaving a few scuff marks behind after limbs had been threatened.
I was thinking that when I watched FDA commissioner Scott Gottlieb testify in front of a Congressional subcommittee on Thursday. Gottlieb has a few good ideas on drug pricing. It’s simple common sense that clearing up a backlog of generics applications and specifically targeting the approval pathway for complex generics can have a real effect on what this country pays for drugs. Generic competition can shred a branded price in months. And we’ll likely see biosimilars start to have an impact after we see a number of rivals appear for every aging blockbuster.
If that’s it — with no Medicare negotiations or tough federal formularies that can kick off the most expensive meds — then the industry chiefs will have dodged a cannon ball. Biopharma can deal with the market realities of generics. And abandoning the end-game of protecting franchise drugs with various delaying tactics is in the public interest.
But that won’t address the underlying issue of branded drug prices in the US.
Ultimately, market forces may be left as the only viable tool for restricting new drug prices. That’s not necessarily a bad thing. But the way it works now creates huge issues for patients.
Left to their own devices, payers have come up with their own way to deny the people they cover access to expensive drugs. Step therapy has become a 100 mile journey for some patients. Rules supposedly aimed at restricting coverage to those who can benefit from a drug are often just drawn up to bar coverage. Out-of-pocket expenses keep going higher to wave off proper use.
US consumers should have access to new drugs at a fair price.
There has to be a better way than this to manage the pricing issue. But we may not see it anytime soon. And that means the pricing controversy will continue to fester indefinitely.
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