News & Views: 6/15 - 6/21

June 22, 2021

Senator Wyden (D-OR) released the principles that will inform the upcoming Senate Finance Committee’s drug pricing proposal.

The principles call to allow the HHS Secretary to negotiate with pharmaceutical manufacturers, and pass on savings to all Americans, not just Medicare beneficiaries. Sen. Wyden also calls for limiting price increases above inflation, restructuring the Part D benefit to reduce beneficiary costs, and ensuring that prices reflect true innovation. To read the full set of principles, click here.

Senate Majority Leader Schumer released the 2022 budget reconciliation proposal, which will be partially funded by drug savings.

The $6 trillion package will include President Biden’s infrastructure plan as well as additional climate change and health care reforms. While there is no outline of how the $6 trillion will be spent specifically, the Budget Committee has released a draft highlighting hundreds of billions in savings from Medicare negotiations, limits on price increases, and changes to the Part D benefit structure. To read the full article, click here.

The Government Accountability Office (GAO) publicly released their report on Medicare spending on drugs through direct-to-consumer advertising.

The report found that drug companies spent an average of $6 billion each year on direct-to-consumer advertising on 553 drugs from 2016-2018. Of the $17.8 billion over the study period, approximately two-thirds of the spending was to advertise 39 of the 553 drugs. The GAO also found that of the $560 billion spent on drugs by Medicare Part B and D beneficiaries from 2016-2018, $324 billion was spent on advertised drugs. To read the full report, click here.

  • Senators Durbin and Grassley announced plans to introduce bipartisan legislation to address unfair drug advertising practices. To read the full press release, click here.

HHS withdrew their advisory letter from December 2020 that instructed drug companies to participate in the 340B program.

The withdrawal occurred after a federal court judge denied HHS’ request to drop AstraZeneca’s lawsuit against HHS, just one of the many lawsuits that large drug manufacturers have outstanding with HHS. HHS also announced that the withdrawal of the advisory letter has no impact of the set of violation letters sent to six large manufacturers last month. Unlike the advisory letter, the violation letters sent to specific manufacturers threatened fines for not offering 340B discounts. To read the full article, click here.

MACPAC’s latest Report to Congress on Medicaid and CHIP addresses the high-cost of specialty drug for Medicaid patients.

The report calls on Congress for immediate, effective action to lower costs for Medicaid beneficiaries. Among the recommendations, MACPAC requests Congress to increase the minimum rebate percentage for drugs approved through the accelerated approval pathway until the clinical benefit has been verified by the manufacturer and to increase the inflationary rebate on drugs that are approved through the accelerated approval pathways. To read the full report, click here.

Former FDA official wrote on the need for consumer input to bring more complex generics to market in a recent Health Affairs blog post.

While Congress passed the Generic Drug User Fee Amendment (GDUFA) in 2012 to increase the number of approved generics and stimulate competition, it was not until GDUFA II passed in 2017 that complex generics were addressed. However, while complex generics were included in GDUFA II, few complex generics have been approved. The article calls on the FDA to make more aggressive efforts to increase the complex generic market to lower prices and increase access by including such measures in GDUFA III. To read the full article, click here.

Researchers from Stanford University analyzed the prevalence of cost-effectiveness studies for drugs with high Part D expenditures in a JAMA article.

The study examined spending on 250 Part D drugs, which totaled $112.8 billion in 2016, and determined what portion of total spending was caused by drugs that had cost-effectiveness analyses conducted. Of the 250 drugs, 115 did not have any cost-effectiveness analyses conducted, yet made up 33.0% of Part D spending. Researchers concluded that a large portion of the Part D spending of 2016 was for drugs that either had no cost-effectiveness analysis or very limited analysis. To read the full study, click here.

CIDSA Experts in the News

Ernst Berndt and colleagues analyzed the use, price, and users of biosimilar products in the US, in a Health Affairs post. The researchers called on Congress to create new policies to encourage more robust biosimilar competition to effectively lower costs and increase savings. To read the full blog, click here.

Sean Dickson coauthored a recent Health Affairs post on intentionally delayed pharmaceutical innovation. Dickson focused on the HIV medication tenofovir alafenamide, manufactured by Gilead, that was purposefully delayed until Gilead’s other HIV drugs’ patents were about to expire. The post also calls on Congress to reduce existing incentives that allow manufacturers to hold out introducing product improvements until the end of a patent lifecycle and to create new incentives for manufacturers to introduce therapeutic improvements as soon as they are known. To read the full blog, click here.

Stacie Dusetzina and researchers from Kaiser Permanente and the University of Washington published an analysis of the association between brand drug rebate sizes to patient out-of-pocket costs in JAMA Open. The study analyzed the recent trend of list prices and rebate increase for branded prescription drugs. To review the entire study, click here.

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