This week, the White House has been signaling that it sees progress on the problem of high drug prices, a subject of such concern to the administration that it released the “American Patients First” blueprint for reducing drug prices in 2018. However, some groups are calling for redoubled efforts on encouraging biosimilars as a way to generate savings and relieve the burden of high drug costs on the healthcare system and on patients.
This week, the White House has been signaling that it sees progress on the problem of high drug prices, a subject of such concern to the administration that it released the “American Patients First” blueprint for reducing drug prices in 2018.
In remarks delivered on Thursday during the signing of an executive order on Medicare, President Donald Trump said that he was “lowering the cost of prescription drugs, taking on the pharmaceutical companies,” even suggesting that impeachment attempts may have “come from some of the people that we’re taking on.”
Additionally, in a report issued this week, the White House Council of Economic Advisors touted progress on drug prices. According to the report, the Bureau of Labor Statistics’ Consumer Price Prescription Drug Index (CPI-Rx) is the most appropriate tool to assess price changes. When using the CPI-Rx as its preferred measure, “not only are drug prices increasing more slowly than general price inflation; in the most recent period, drug prices have been decreasing. As of August 2019, the CPI-Rx has declined by 0.7 percent over the previous 12 months.”
The report makes the claim that “the measurements cited in the media” that show that drug prices are increasing—including a newly released AARP report that shows that drugs’ retail prices in 2017 were 2.1% above the general inflation rate—are misleading. In part, says the council, that’s because “what matters are the changes in the prices of the most commonly prescribed drugs,” not high-cost, less frequently prescribed therapies, and list prices are “a less meaningful measure” of drug prices.
Despite the administration’s claims of progress on drug prices, however, some groups are calling for redoubled efforts on encouraging biosimilars as a way to generate savings and relieve the burden of high drug costs on the healthcare system and on patients.
First, this week, conservative think tank the Pacific Research Institute (PRI) published an issue brief in which it said that if biosimilars are able to achieve a 25%, 50%, or 75% market share, the US could increase its current annual $240 million in biosimilar savings to $2418 million, $4681 million, or $6999 million, respectively. Individual US states stand to see substantial savings, too; the brief estimates that, given 75% market share for biosimilars, annual state savings could range from $5.86 million in Wyoming to $598.95 million in Florida.
“These estimated savings are conservative,” says the brief, noting that some biosimilars have reached 90% or greater market penetration in some European nations, and greater savings could also result if more biologic drug classes become open to competition.
Pointing to those numbers, biosimilar industry group the Biosimilars Forum said in a statement that “There is no question that we must create policies that increase biosimilar use should be part of any executive order to lower Medicare costs. By implementing solutions that increase biosimilar access—such as eliminating out-of-pocket costs (co-pays), increasing physician add-on payments and implementing a shared savings program—President Trump can quickly generate competition that will reduce the cost of prescription drugs for seniors and patients in Medicare Part B.”