A Chance to Cure America’s Drug-Price Sickness
(Bloomberg Opinion) -- This year’s prescription-drug price hikes may have been a bit less exorbitant than in years past. But they were plenty high enough to hurt American patients — and strengthen resolve in Washington to push back.
“The list price increases must stop,” was the response from Health and Human Services Secretary Alex Azar. “Prices must start coming down.”
So far, the Trump administration hasn’t made much headway against drug prices, but a new Congress is poised to help. It’s not just that Democrats have retaken control of the House of Representatives; it’s also that many Republicans have decided to act. Majority Leader Mitch McConnell says he’ll allow the issue on to the Senate agenda this year, and Republican Senator Chuck Grassley, the new chairman of the Finance Committee, has endorsed specific measures to increase competition.
This favorable political landscape can yield real progress against America’s extraordinary drug prices, if lawmakers and the White House look for common ground on common-sense strategies.
A good way to start is by boosting competition. That means ending the games brand-name drugmakers play to preserve their patent protection: They block generics makers from getting the samples they need to test copies, and they pay those companies to delay or abandon their plans to compete. Legislation that Congress has been ignoring for years would enable generics makers to sue for the samples they need. Many Democrats support it, and now Grassley does, too.
And Grassley is sponsoring a separate bipartisan bill to stop pay-for-delay tactics. If he can get his Senate colleagues to cooperate, then President Trump would only need to sign his name.
Another way to lower prices for many Americans would be to enable them to legally buy drugs from other countries — where prices are half or less those in the U.S. Here again Senator Grassley is lending his name to legislation that would allow imports from Canada. This could be a first step toward wider importation from all countries with pharmaceutical oversight as reliable as that provided by the U.S. Food and Drug Administration.
Then there is the Trump administration’s promising — if not yet fully formed — proposal to benchmark the prices of drugs administered by doctors to Medicare patients against prices in other countries. Grassley and other Republicans have not yet signed on to this strategy. Democrats should join forces with the White House to sell the idea. Unfortunately, some of them are instead pulling in a more radical direction, proposing to index the prices of all drugs to those of other countries, and to punish companies whose prices are too high by rescinding their patent rights. That approach won’t win the broad support that is necessary to change policy.
Other countries have cheaper drugs partly because governments negotiate with pharmaceutical companies. The U.S., too, could have lower prices if it were to negotiate on behalf of Medicare’s 43 million drug-insurance beneficiaries — rather than have the private companies that provide the coverage negotiate individually. This would work even better if Medicare could refuse to pay for certain drugs that cost more than they are medically worth. The pharmaceutical industry has fought against this since the dawn of Medicare drug coverage, alas, and Grassley and other Republicans aren’t budging on the issue. Democrats should keep pressing, even if the idea won’t fly right now.
Any number of other strategies would be worth bipartisan consideration — including requiring greater transparency on price increases, as some states are demanding; having the National Institutes of Health set pricing conditions when it transfers intellectual property to drug companies; and giving doctors more incentive to consider price in deciding which drugs to prescribe. Every effort will require that Congress and the White House stand together against pressure from the pharmaceutical industry. There’s never been a better moment to try.
Editorials are written by the Bloomberg Opinion editorial board.
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