Genetic Engineering & Biotechnology News

JUN15 2018

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30 | JUNE 15, 2018 | Genetic Engineering & Biotechnology News | GENengnews.com rising out-of-pocket costs for consumers; and foreign govern- ments free-riding off of American investment innovation." The agency also listed what it called four key strategies for reform: "improved competition; better negotiation; in- centives for lower list prices; and lowering out-of-pocket expenses." According to HHS the U.S. spends over $300 billion an- nually on prescription drugs, with Medicare and Medicaid accounting for 40% of that cost. HHS Secretary Alex Azar strongly backed the president noting that the time to act is now. "Not only are costs spiraling out of control, but the scien- tific landscape is changing as well. Securing the next genera- tion of cures for the next generation of American patients will require radical reforms to how our system works. Our blueprint will bring immediate relief to American patients while also delivery long-term reforms." Scott Gottlieb, M.D., FDA Commissioner, said he ap- plauded the president's proposals. "The FDA shares the goal of ensuring that American pa- tients have access to quality and affordable care that meets their needs," he said. "This is why we're prioritizing actions to encourage the timely development and approval of gener- ics and biosimilars." Among the president's other proposals, in addition to support for generics and biosimilars, were "streamlining and accelerating the approval process for over-the-counter drugs; take steps to end the gaming of regulatory and patent pro- cesses by drug makers to unfairly protect monopolies; evalu- ate the inclusion of prices in drug makers' ads to enhance price competition; speed access to and lower the cost of new drugs by clarifying policies for sharing information between insurers and drug makers; and avoid excessive pricing by re- lying more on value-based pricing by expanding outcome- based payments in Medicare and Medicaid." Controversial Aspects of the Plan Controversy over the president's drug price reduction plan did arise, however, based on his support tor two issues during his run for president: importing prescription drugs from other countries and letting Medicare officials negoti- ate drug prices. Pharmaceutical companies and a number of Trump ad- ministration officials oppose the importation idea with HHS Secretary Azar calling it a "gimmick." Nevertheless, the Re- publican governor of Vermont, Phil Scott, signed legislation to allow the importation of prescription drugs from Canada. HHS has to approve the plan. However, the bigger bone of contention was over the president's about-face on Medicare: the administration will not allow it to directly negotiate drug prices. The Trump team does plan to make it simpler for private health plans to negotiate for seniors under Part D of Medicare. According to HHS Secretary Azar, Part D spends about $30 billion a year on drugs. That's almost 10% percent of what the U.S. spends on drugs each year. Yet, contends Azar, Part D plans are hamstrung by current rules from really ne- gotiating over drugs in these protected classes—allowing pharma to run up huge profits on patients who desperately need these often-expensive drugs. "You heard President Trump make it clear on Friday how important tougher negotiation is. That is exactly what our plan brings to Medicare, in an effective and targeted fashion. We are delivering on President Trump's promise to do smart bidding and tough negotiation in Medicare: We are going to bring negotiation to where it doesn't exist [in physician administered drugs], in Part B, and making negotiation more effective than it is today, in Part D," he said. "You can imagine what happens when you're developing a drug: It's much more appealing for the drug to go into Part B, where the government just pays the bill you send them, than Part D. ... In short order, we will be issuing a request for proposal to make new use of an alternative system for buy- ing Part B drugs, a Competitive Acquisition Program. "We believe there are more private sector entities equipped to negotiate these better deals in Part B, and we want to let them do it. More broadly, the President has called for me to merge Medicare Part B into Part D, where negotiation has been so successful." Encouraged But Regretful While noting that AARP is "encouraged that the presi- dent is focusing attention on lowering prescription drug prices," Nancy LeaMond, AARP's executive vice president and chief advocacy and engagement officer, expressed regret that the plan does not allow Medicare to negotiate prices with pharma firms. The negotiation referred to is between individual Medi- care Part D prescription drug plans (administered by private insurers) and drug makers. The Trump proposal does not include asking Congress to allow Medicare to negotiate with pharmaceutical firms. With 60 million beneficiaries, Medicare is the single larg- est purchaser of prescription drugs in the U.S., according to AARP. It is prohibited by law from negotiating prices with pharmaceutical firms. "High-priced drugs hurt everyone, and seniors, who on average takes 4.5 medications a month, are particularly vul- nerable," noted LeaMond. Holly Campbell, deputy vice president, public affairs, Pharmaceutical Manufacturers of America, said that while PhRMA believes change is needed, "we have concerns that some of the far-reaching proposed changes to Medicare Parts B and D could disrupt care and raise costs for beneficiaries. Proposals to merge Part B coverage of medicines into Part D could increase patient costs and reduce access. In fact, hun- dreds of thousands of Part B beneficiaries not currently en- rolled in a Part D plan, could lose coverage altogether. Benefi- ciaries could also see higher Part D premiums and, for some, higher out-of-pocket costs at the point of care." While some of these proposals could help make medicines more affordable for patients, others would disrupt coverage and limit patients' access to innovative treatments, added PhRMA president and CEO Stephen J. Ubl. "The proposed changes to Medicare Part D could un- dermine the existing structure of the program that has suc- cessfully held down costs and provided seniors with ac- cess to comprehensive prescription drug coverage. We also must avoid changes to Medicare Part B that could raise costs for seniors and limit their access to lifesaving treat- ments," said Ubl. "Misaligned incentives in the supply chain are resulting in savings for middlemen, but higher costs for patients. After negotiations, medicine prices increased just 1.9% last year, below the rate of inflation, and yet patients' out-of-pocket costs continue to skyrocket. Giving patients access to negoti- ated discounts at the pharmacy counter and protecting se- niors in Medicare Part D from catastrophic costs would help make medicines more affordable." For the record, GEN reached out to several U.S. sena- tors and representatives to obtain their thoughts on the presi- dent's drug price plan. Only one staff member replied saying "Sorry to be the bearer of bad news, but the [Republican] Senator does not wish to comment." President Reveals Plan to Cut Drug Prices Continued from page 1 Translational Medicine President Trump announced his plan to lower drug prices. Jose A. Bornat Bacete/Getty Images " Securing the next generation of cures for the next generation of American patients will require radical reforms to how our system works."

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