Republicans and Democrats Express Dissatisfaction with Drug Industry's Answers
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Monday, October 23, 2017 07:25 AM

Do you think the federal government ought to be able to negotiate all drug prices? – Sen. Elizabeth Warren (D-Mass.)

“No, we don’t,” – Lori Reilly, executive vice-president for policy, research, and membership at the Pharmaceutical Research and Manufacturers of America (PhRMA), a lobbying group for drugmakers.

Senators from both sides of the aisle appear to be growing weary of the pharmaceutical industry’s responses to the problem of high prescription drug costs.

“Let's talk about one of the best market based solutions and that's competition," said Sen. Elizabeth Warren (D-Mass.). "If the restrictions that prevent purchasers from importing drugs at lower prices from places like Canada were removed ... We’d see some competition and that would lower prices."  Another solution is negotiation, she continued — "If Medicare was allowed to negotiate prices for beneficiaries, then prices would come down."

“Price controls are not a market-based solution," responded Lori Reilly, executive vice-president for policy, research, and membership at the Pharmaceutical Research and Manufacturers of America (PhRMA), a lobbying group for drugmakers.

“I'm sorry; I didn't ask about price controls," Warren said.

“Bringing in drugs from other countries that price-control their products is not a market-based way to get drug prices down,” said Reilly, adding that all countries other than the U.S. use such controls.

“So there is no place we could import from that could satisfy your requirements ... How about the federal government competing and saying, 'We're going to negotiate prices'?" asked Warren.

"I think there's a [misconception] that because the federal government is not setting prices, there's not negotiation. That couldn't be further from the truth," Reilly said. “As we've seen in Medicare Part D; there has been robust negotiation; rebates are over 35% on average -- "

Warren interrupted her. “Let me stop you there; [do you think] the federal government ought to be able to negotiate all drug prices?"

“No, we don't," Reilly said. 

Warren wasn't happy. “Drug competition from Canada and price negotiation are solutions, not government mandates, and I would have thought that if you believed in market-based solutions, you would embrace them."

Sen. Bill Cassidy, MD (R-La.), was focused on one example of rising drug costs: the price of insulin. He noted that the price of some insulin products increased at a rate of 20% annually for several years, ”so from 2010-2014, [it] goes from $114 to $228 … as deductibles have grown. Patients can't afford this! Americans with diabetes and all Americans are upset. What do you say about that?" he asked Reilly.

She responded, “The diabetes marketplace is often confusing; today it's one of the most competitive marketplaces -- "

Cassidy interrupted her, asking her to return to the issue of the 5-year price increase; he interrupted her twice more to read figures on the price increases. "There's been more of an emphasis on raising prices of established drugs, than on new, innovative drugs," he said.

Sen. Al Franken (D-Minn.) gently admonished all of the witnesses, including Reilly as well as those representing pharmacy benefit managers, pharmacists, generic drug firms, and drug distributors. "It seem like every one of you is responsible for getting prices down," he said. “The U.S. spends more on prescription drugs than any other industrialized country, in part because drug prices are higher in the U.S. than any other country."

He gave the example of the asthma medication fluticasone (Advair), which is made in the U.S; the price of the drug was $309.60 in the U.S., $74.12 in Canada, and $37.71 in Germany. "Why are prices so much higher in the U.S. for a drug produced in the U.S.? I think Americans really want to know this.”

Reilly defended the drug industry. "In many other countries, prices are artificially depressed; they also pay more when something goes generic, and there are fewer generics," she said. "Our country incentivizes new products to come to market, and then, when the patent expires, 95% of the market shifts overnight to generics. That’s why we have 90% of drugs sold [being generics] as opposed to 50%-to-60% in other countries."


 Source:  https://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/68614