Top Wyden priority for drug price reforms: Medicare negotiations
As the Biden administration tries to wrangle the details of its infrastructure bill, Senate Finance Committee Chair Ron Wyden (D-OR) took a concrete step forward on drug pricing reforms on Tuesday and unveiled five principles for such reforms, including providing Medicare with the ability to negotiate prices.
“Allowing the Secretary of HHS to negotiate the price Medicare will pay creates a much needed mechanism to achieve fairer prices when the market has failed to do so,” Wyden wrote.
The call for such negotiations represents a shift for Wyden, as he previously authored a drug pricing reform bill with Sen. Chuck Grassley (R-IA) that did not include such negotiations.
So why the shift? Wyden said that many older drugs command high prices because they face no competition from generics and other new drugs launch at steep prices with little justification. As an example of an unfair launch price, he pointed to Biogen’s new Alzheimer’s drug Aduhelm, which launched at a price that’s “far beyond any reasonable justification of the clinical value to patients, caregivers, or society.”
The new plan comes as a coalition of employers and health care purchasers are calling on the top House and Senate leaders to take a hard look at the “astronomical price” of Aduhelm and “move boldly” to enact prescription drug pricing reform.
But Wyden sounds more keen on a targeted, rather than a one-size-fits-all approach.
In crafting a price negotiation policy, Congress must tackle four issues, according to Wyden: “a. Establish clear criteria for market failure and for which drugs to negotiate the price; b. Define what constitutes a fair price in these circumstances; c. Give the Secretary both tools and guidelines to negotiate a fair price; and d. Create the right incentives to ensure that pharmaceutical companies participate in the negotiation process.”
While the timeline on when a bill may be drafted is unknown at this point, price reform advocates have been pushing for something this summer, while industry advocates are looking to do what they can to stop price controls.
Another top priority for Wyden in addressing drug pricing is ensuring that patients see savings at the pharmacy counter, especially for specific types of critical drugs, such as insulin, for which “the rebate dynamics are extreme and inhibiting access.”
Wyden also said he wants to require rebates on drug price hikes above inflation to rein in companies that gouge the millions who take older drugs, and he wants to extend these pricing reforms beyond Medicare and Medicaid.
“Policies that target both exorbitant prices of drugs and reduce out-of-pocket spending for patients must extend beyond Medicare,” he wrote.