Restoring sanity to drug pricing
The Washington Times
Senator Mike Braun
March 6, 2019
Before being elected to the U.S. Senate last year, I spent 37 years building a business in my hometown, hiring hundreds of Americans and taking on the insurance industry to give my employees quality affordable health care while covering pre-existing conditions.
Today, I’m offering solutions to address the rising cost of prescription drugs by adding transparency to our pricing negotiations, clearing the way for more prescription drug approvals by the Food and Drug Administration (FDA), and providing oversight and accountability for the pharmaceutical industry.
According to President Trump’s Health and Human Services Secretary Alex Azar, Americans pay more than we need to for prescription drugs in large part because of a “hidden system of kickbacks to middlemen,” known as pharmacy benefit managers (PBMs). PBMs play a role in negotiating with drug companies, and the current rebate-driven system — facilitated by PBMs — is characterized by high drug-list prices and hidden rebates.
These middlemen usually receive negotiated rebates from drug manufacturers and pocket an undisclosed portion of the rebate. Generally, the higher a drug’s list price, the bigger the rebate — which equals more money for these middlemen.
Recently, HHS confirmed that “all or nearly all” of the drug price increases from drug manufacturers last month were being paid as rebates to pharmacy benefit managers or insurers, leaving Americans with higher drug prices. As a result, HHS proposed prohibiting these hidden rebates in government health care programs, which is a good first step, but we need to do more.
To drive down high drug costs, we need to shine a light on the negotiations between drug manufacturers, middleman negotiators and pharmacies. That’s why I’m proposing legislation — to complement HHS’s proposed rule for government health care programs to end these hidden rebates for private health insurance plans and require that any rebates be reflected in the price you see at your local pharmacy.
The FDA’s lengthy and complex drug approval process is a significant obstacle to lower drug prices, which is contributing to shortages of life-saving drugs already available in other developed countries.
That’s why I’m introducing a bill to create an accelerated approval pathway to act as a passing lane for prescription drugs that have already been approved for sale in other developed countries like the U.K. and Canada with a history of good clinical trials and available data.
Most drugs sold in the United States are produced outside of the country, and if we can ensure supply chain safety for these drugs there’s no reason to prevent them from being sold in the United States. This accelerated approval pathway will foster competition, cut down on a long listof drug shortages and create a better functioning drug market more reflective of the global economy without sacrificing safety for Americans.
Some big pharmaceutical companies have engaged in dirty tricks to extend their patents, holding monopolies on certain drugs to pad their profits at consumers’ expense. While I support granting drug companies patents to recover their investment and encourage innovation, companies that take advantage of this goodwill to build a monopoly must be stopped.
One dirty tactic big pharmaceutical companies use is keeping drug prices artificially high through anti-competitive conduct, such as paying competitors millions of dollars to stop them from creating generic drugs.
Another shady practice by big pharmaceutical companies is filing serial and frivolous “citizen petitions” against generic companies to the FDA, delaying final FDA approval by months to years. Last year, the FTC filed a lawsuit against Shire ViroPharma which had submitted no less than 24 of these citizen petitions — delaying approval for a generic version of a drug that treats life-threatening gastrointestinal infections.
According to some healthcare experts these delays can yield drug makers millions of dollars in revenue, and this gaming the system at Americans’ expense needs to stop.
That’s why I’ve introduced the Efficiency and Transparency in Petitions Act, which will require the FDA to publish additional information on these petitions and require petitioners to file them within a year of discovering the issue their petition is based on.
In my business, I was told it would be impossible to insure hundreds of employees, cover pre-existing conditions with no cap on coverage, and hold premiums flat for a decade. I did it by taking on big health care industries and fighting for solutions.
Career politicians have been talking about this problem for decades, and the only result we’ve seen is higher drug prices.
By enacting my three solutions — simplifying our drug price negotiations, clearing the path to the U.S. market for safe drugs, and cracking down on underhanded business practices by big drug companies — we can begin to restore sanity to drug prices and security for Americans.
Mike Braun, an entrepreneur who created hundreds of American jobs, is the freshman Republican senator from Indiana.