Equal treatment under the law. A foundational pillar of American life. Except when it comes to drug makers who benefit from favorable treatment by the federal government.
For far too long, prescription drug companies have profited immensely under a system that affords them monopolistic powers to set prices devoid of government or public scrutiny.
Even during the pandemic, while much of the economy took a beating, the pharmaceutical industry continued to benefit from the high prices they charge. In fact, 9 of the 10 biggest profit margins recorded last summer belonged to drug companies.
As the nation’s economy sputters back, Big Pharma continues to raise prices and block patient access to lower-cost alternatives. It is beyond time to tame the soaring prices of prescription drugs once and for all.
For years, health care players have skirted around concrete actions to truly impact drug prices. Efforts to cut costs for consumers have translated to higher costs for health plans, resulting in a cost shift instead of a cost reduction. We, as private, nonprofit insurers, believe in the ambition and innovation possible in a free market – but the market has failed in this instance and it’s time for the government to take action.
That is why the Alliance of Community Health Plans (ACHP) is putting its support behind reforms that can make a real, lasting impact for consumers and the entire health system. For the first time, a national health care payer organization is stepping up and supporting pragmatic and progressive reforms that can truly begin to rein in the price of prescription drugs.
This includes backing the dramatic step to grant the Secretary of Health and Human Services the power to negotiate lower prices for the highest-priced medications for which there is no competition, in addition to other actions.
We are all are anxiously awaiting the approval and delivery of a cure to the novel coronavirus – or better yet, a vaccine.
Amid the race to develop a safe and effective vaccine, some may be inclined to give drug companies a pass on their well-established bad behavior related to pricing and market competition.
But that would be an awfully expensive mistake.
As the COVID-19 pandemic claims more lives and families’ livelihood, policymakers and the public must press drug makers for more information on the products they are developing. The country must be protected against price-gouging for therapies that could bring the pandemic to a halt.
Yes, we need America’s biopharmaceutical companies to develop a cure or vaccine so we can resume our normal lives. And yes, they should be compensated for their work.
A massive lawsuit filed in May by 44 states accuses 20 major drug makers of colluding for years to inflate prices on more than 100 generic drugs, including those to treat H.I.V., cancer and depression. If true, the alleged behavior is not just a violation of antitrust law, but also a betrayal of the government policies that created and defended the entire generic drug industry.
Most prescriptions in the U.S. today — 9 in 10 — are filled with generics, which are just as safe and effective as their brand-name equivalent. And yet generics account for only 22 percent of U.S. prescription drug spending. These prices are so low because of competition between makers of different versions of the same generic drug. The more competing generic alternatives, the lower the price, theoretically right down to the marginal cost of manufacturing the pill.
This success is the result of decades of careful federal and state policymaking, all geared towards introducing competition in prescription drug markets. The entire generic industry has its origins in the Hatch-Waxman Act of 1984. Prior to Hatch-Waxman, a company that wanted to sell a competing version of a drug whose patents had expired had to conduct lengthy and expensive clinical trials to get approval from the U.S. Food and Drug Administration. Hatch-Waxman established a quicker, less-expensive path to FDA approval that leans on the scientific research supporting the already approved brand-name drugs.
Hatch-Waxman also created incentives for generic drug makers to challenge drug patents that prevent competition. Successful challengers win a 180-day period of exclusivity during which their generic is the only one allowed to compete with the brand-name drug. The floodgates open and additional competition pushes prices down further after the 180-day period.
In this start your weekend off right edition, Jessica DaMassa asks me about Andy Slavitt’s new Town Hall venture fund announced at HLTH, the ATHN buyout, Novartis paying Michael Cohen, Trump’s drug price speech & Lyra Health’s $45m raise….all in 2 minutes–Matthew Holt
In defending the ever-growing cost of drugs, the pharmaceutical industry can’t roll out a single, intuitive explanation. Rather, their justification breaks down into many independent but interacting parts. We have to tease these apart before examining their validity.