Healthcare Reform Efforts Turn to Drug Pricing

September 27, 2017
Kelly Davio

Republican efforts to repeal and replace the Affordable Care Act may have stalled once again with the failure of the Graham-Cassidy bill on Thursday, but advocacy groups intend to keep healthcare—and the high cost of prescription drugs—at the forefront of Congress’ agenda.

Republican efforts to repeal and replace the Affordable Care Act may have stalled once again with the failure of the Graham-Cassidy bill on Thursday, but advocacy groups intend to keep healthcare—and the high cost of prescription drugs—at the forefront of Congress’ agenda.

More than 100 advocates from the American College of Rheumatology (ACR) are at Capitol Hill this week to urge law makers to address growing costs of drugs for millions of Americans who have arthritis and other rheumatological diseases. ACR’s representatives met with congressional leaders and urged them to support legislative solutions to problems in 3 key areas:

  • Specialty drug copayments. Many drugs that treat rheumatologic conditions, including biologics and biosimilars, are placed on specialty tiers of pharmacies’ formularies. Such tiered placement results in higher copays for patients by making individuals responsible for a percentage of a drug’s cost rather than for a fixed copayment amount.
  • Pharmacy benefit manager (PBM) pricing practices. ACR criticizes PBMs for keeping the outcomes of pricing negotiations with drug manufacturers confidential, saying that the practice has been “incredibly effective at keeping much of the savings for themselves by often pocketing the difference between the fees they charge to pharmacies and the prices they negotiate from manufacturers.”
  • Medicare therapy caps. Caps on Medicare that would limit access to physical and occupational therapy for beneficiaries who have chronic diseases are slated to be implemented in 2018.

“All across America, people living with chronic illnesses like rheumatoid arthritis are routinely denied timely, life-sustaining, and clinically appropriate treatments because of cost or access issues,” said Sharad Lakhanpal, MD, president of ACR. “We are urging Congressional leaders to come together around common-sense reforms that will ensure their constituents can access and afford the therapies and services needed to avoid long-term disability, remain active in the workforce and their communities, and maintain quality of life.”

Legislative efforts are underway to address some of these concerns, and ACR urged Congress to continue to support 2 among them. First, Congressman David McKinley (R-West Virginia) has introduced HR 2999, known as the Patients’ Access to Treatments Act of 2017. The bill would amend the Public Health Service Act to limit copayment, coinsurance, and other cost-sharing requirements for drugs placed in specialty tiers to match those of drugs placed on non-preferred brand tiers. The bill has been referred to the House Committee on Energy and Commerce’s Subcommittee on Health.

Second, Senator Benjamin Cardin (D-Maryland) has introduced S.253, known as the Medicare Access to Rehabilitation Services Act of 2017, which would amend the Social Security Act to repeal Medicare outpatient rehabilitation therapy caps. The bill has been referred to the Committee on Finance.

A number of other legislative solutions have been introduced to Congress, including Senator Al Franken’s (D-Minnesota) S.771. Among other provisions, this bill would limit patent exclusivity of new drugs to 3 years (rather than the current 5 years), and would reduce biologics’ exclusivity periods to 7 years (down from the current 12), allowing for faster generic and biosimilar market entry. It would also allow for the importation of drugs, including biosimilars, from licensed foreign pharmacies. Also introduced in the Senate is Senator Sherrod Brown’s (D-Ohio) S.1369, which would establish an excise tax on prescription drugs that have been subject to spikes in price.

House efforts include Congressman Leonard Lance’s (R-New Jersey) H.R.1409, which would require that health plans provide cost sharing for oral anticancer medicines on terms that are equally favorable to terms offered for provider-administered anticancer therapies.

Despite the number of legislative options offered by the House and Senate, and despite pressure from advocacy groups like ACR, some experts see little reason to believe that Congress will make much progress on solving the problem of high drug prices. As Ameet Sarpatwari, JD, PhD, instructor at Harvard Medical School, told The New York Times, “There is a very aggressive lobby that is finding any and all means to thwart any reform to a system that has produced very lucrative profits. Everything that’s coming out is being hit and hit hard—even stuff that’s common-sensical.”