PhRMA’s Lori Reilly warns that, as US policymakers seek to reduce drug prices, they must avoid policies that reduce access and choice.
America is the centre of cutting-edge biopharmaceutical innovation. Not only are many of the latest treatments and cures developed in labs by researchers across the United States, but they’re also available to American patients first. For instance, cancer patients in the United States had access to a breakthrough immunotherapy treatment– the same one that treated President Jimmy Carter – eight months before many other countries. And patients with HIV in other countries had to wait 18 months longer for a groundbreaking treatment for drug-resistant forms of HIV after its approval in the United States.
These delays in access to medicines in other countries weren’t due to shipping issues or supply chain problems. They arose because, in other countries, governments decide what the value or price of a treatment is worth and whether patients can have access to it by setting a national formulary. Here in the United States, current Medicare law prohibits the federal government from interfering in these critical, and often life and death, decisions. As a result, Americans enjoy unparalleled choice.
Instead of pursuing solutions that get to the heart of patient costs, the debate in Washington D.C. is not focused on what’s best for patients, but what can raise the most revenue to fund other unrelated government programs
However, this does not mean the system is working well for all patients. Many of America’s sickest and most vulnerable patients continue to face high out-of-pocket costs even though the prices for brand medicines paid by health plans declined 2.9 percent in 2020. That’s because insurers and pharmacy benefit managers are increasingly shifting more health care costs to patients through high deductibles and coinsurance.
Patients with deductibles and coinsurance often pay their out-of-pocket costs based on the undiscounted list price of a medicine, rather than the lower negotiated net price their insurance plan receives. A patient with a deductible may pay the full price of a medicine, while the health plan pays nothing and receives a rebate. This perverse system can lead patients to abandon their medicine at the pharmacy counter or cut their doses in half. This is not how health insurance is supposed to work.
These are the real challenges in our health care system that policymakers should help address. We are willing to work with leaders on both sides of the aisle on common-sense, patient-centred reforms, including modernizing how Medicare covers and pays for medicines by capping out-of-pocket costs in Part D, lowering cost-sharing and spreading those costs over the calendar year and making sure the savings negotiated with health plans are passed to patients at the pharmacy counter.
But instead of pursuing solutions that get to the heart of patient costs, the debate in Washington D.C. is not focused on what’s best for patients, but what can raise the most revenue to fund other unrelated government programs.
Some policymakers say they want the government to “negotiate” drug prices, but what they are really trying to do is give the government the power to dictate prices for innovative medicines. This government interference will strip agency from doctors, seniors, and people with disabilities without fixing problems in the system that drive up costs for patients.
The danger is a policy outcome that combines the worst of two worlds: government price setting with less access to innovative treatments and an insurance system that imposes more and more costs on patients. The Congressional Budget Office found that government interference in Medicare could save the government money only if access to medicines is sacrificed, for example, by establishing a restrictive national formulary that limits patients’ access to medicines today, or by administratively setting prices which would limit access to future cures and innovations.
This is not what American voters want. Data show 72 percent of Americans oppose government price setting if it results in fewer new medicines being developed in the future, something studies have shown it would do. Instead, they prefer solutions that address their out-of-pocket costs without sacrificing innovation. For instance, 83 percent of voters support requiring insurers to pass along negotiated rebates and discounts to patients at the pharmacy counter and 75 percent support placing a cap on the amount insurers can make patients pay for deductibles, copays and other out-of-pocket costs.
Government price setting is a lose-lose proposition: It threatens patients’ access to critical treatments and fails to address the true affordability challenges facing patients. That’s a hard sell to American patients who are counting on the biopharmaceutical industry to find treatments and cures for cancer, heart disease, diabetes and other serious disorders.
Congress should reject this dangerous plan and instead accept our industry’s offer to help advance patient-centered solutions. That way, we can lower costs at the pharmacy counter and preserve access to the groundbreaking treatments Americans need.