Earlier this month, a federal appeals court heard arguments in Texas v Azar. If the judge sides with the Republican point of view that the entire Affordable Care Act (ACA) is unconstitutional and invalidates the landmark law, the Biologics Price Competition and Innovation Act (BPCIA), the pathway for biosimilars included in the ACA, would have to start over from scratch. That shouldn’t be a problem, according to 2 conservative healthcare and pharmaceutical observers interviewed by The Center for Biosimilars®.
There’s no shortage of policy ideas and legislation about how to lower drug prices, including ways to boost the US biosimilar market—just witness the latest bill, the 40-page Prescription Drug Pricing Reduction Act (PDPRA) of 2019, which will be heard in the Senate Finance Committee Thursday.
While this bill, like others (such as a healthcare package released by the Senate Committee on Health, Education, Labor, and Pensions), is bipartisan, their chances of passage are unknown. The pharmaceutical industry, for instance, is opposed to the bill being heard Thursday.
Another unknown, of course, is the future of the Affordable Care Act (ACA), which was created to increase access to health insurance markets, rein in healthcare costs, and alter the delivery of care with new models and quality improvement measures.
Earlier this month, a federal appeals court heard arguments in Texas v Azar. If the judge sides with the Republican point of view that the entire ACA is unconstitutional and invalidates the landmark law, the Biologics Price Competition and Innovation Act (BPCIA), the pathway for biosimilars included in the ACA, would have to start over from scratch, but given the bipartisan support for biosimilars, that shouldn’t be a problem, according to 2 conservative healthcare and pharmaceutical observers interviewed recently by The Center for Biosimilars®.
However, there are possible pitfalls, said both Alex Brill, an economist and senior fellow at the American Enterprise Institute (AEI) as well as chief executive officer of consulting firm Matrix Global Advisors, and Tara O’Neill Hayes, the deputy director for healthcare policy at the American Action Forum (AAF).
The ACA “is much more than just the individual market exchanges and Medicaid expansion…There are so many other pieces in it,” said Hayes. “I think everyone pretty much across the board, you know, as far as members of Congress, policymakers, know the importance of biosimilars. Congress and the President, they all are committed to lowering drug prices, and there's no way you're going to do that without biosimilars.”
Hayes said she “can’t imagine” the BPCIA not being reinstated.
Brill also said that when the various ACA repeal votes were happening (more than 70 times, by some accounts), Republicans never had any intent of doing away with the BPCIA portion of the law. The question of what would come after the BPCIA is a theoretical one, he noted.
“I think that's the key here, is that there are provisions within the Affordable Care Act that are not controversial. And even when we saw Republicans repeatedly voting to repeal ACA, they weren't willing to repeal this [the BPCIA],” he said.
Brill was referring to votes on the GOP’s American Health Care Act, which would have repealed the ACA’s insurance affordability provisions, individual and employer mandates, taxes, and Medicaid expansion, but would have left biosimilars alone.
Brill, who recently took exception to the idea that it is time to give up on the idea of a biosimilars market in the United States and start regulating biosimilars as a monopoly, said he would expect legislators to move quickly to address any parts of the ACA they want to keep.
Would legislators take the opportunity to redo some parts of the BPCIA, if they had the chance? Both Brill and Hayes said while that, too, is theoretically possible—such as shortening the period of patent exclusivity or changing other aspects of the patent dance—the danger is that it would then get stuck in the quagmire of politics.
“I think that Congressional leadership would resist that, for the simple reason that is, they open that door, that it becomes very, very difficult for them to pass anything,” said Brill. “And so I think that'd be a strong sense by Congress, that even if provisions of the Affordable Care Act that lawmakers want to keep, even if those traditions are imperfect, if you start to renegotiate them, you'll never get anything done.”
On the other hand, if lawmakers were to start changing the BPCIA, such as by shortening the period of patent exclusivity from 12 years, Brill said he still stands by his earlier work, which said that a period of 7 years is sufficient to ensure both innovation and competition. “I think 7 was the good, fair, and honest duration,” he said. “I thought that in 2009 and I still think that’s true.”
However, he does not think that a court decision repudiating the ACA “will propel Congress to reform the BPCIA.”
Hayes said her organization, the AAF, has not stated a position on what an optimal length of time would be for a patent exclusivity period. “Frankly, it's something that I don't think we really know exactly what the right number of years is,” she said, adding that, “so much of these issues in the drug pricing phases, so much of it is a black box.”
There are other steps that could be taken to improve the biosimilars marketplace, they said.
“We're definitely seeing the biosimilars market is still very fragile,” said Hayes, citing the use of rebates by brand-name drug makers and patent thickets, which need reform so that biosimilars can compete.
Brill said that he sees both industry and agencies as needing “to do a better job with the physician community.” Citing hesitation on the part of prescribers, he said, “People may either think that these are poor substitutes, or they just don't know what they are. Or they know what they are, but they just don't care about something being cheaper because they're not paying. And so I think we need to do better to ensure that the subscribing community sees value in biosimilars.”
That’s going to take time, he said, “but I think that there's a lot of power there, a lot of power in the ability of physicians, if they understand the importance and opportunity of a robust biosimilar marketplace for them to influence the penetration rates or the uptake rates for these products.”
Discussing other pricing issues, Hayes noted one idea being proposed to pay for even more expensive medicines; contained in the bill to be discussed on Thursday is a proposal under which Medicaid would pay for certain high-cost therapies over a certain number of years. That could be counterintuitive, she said.
“There's concern among some people that if you do that, you basically reduce the burden. And so you, you might potentially lose some of the will to really push to get that drug price down, because it would just be a little bit easier to pay for if you pay for it over so many years. And so maybe we end up paying more than we otherwise would in the long term.”