Saturday, 12 September 2015
The U.S. Presidential Race and Pharmaceutical Pricing (and More)
The U.S. Presidential Race is pressing ahead. I’ve written a bit about Donald Trump and the value of his name, here. Trump has continued to receive a mixed response to his ideas about immigration and has come under increased fire from his party. Notably, (mostly) conservative commentator Charles Krauthammer recently confounded conservative talk-show host Bill O’Reilly of Fox News by making the case that Trump’s “rounding people up for deportation and possible reimportation” was not only illegal, but morally wrong (and prohibitively expensive). Krauthammer pointed to the heart-breaking Elian Gonzalez episode.
The number two democratic candidate, Senator Bernie Sanders has introduced a bill in Congress designed to lower the cost of pharmaceuticals (press release). The fact sheet is here. While the bill apparently allows the negotiation of drug prices under the Medicare Part D prescription drug program, it also allows prescription drug importation from Canada. Notably, “The bill also directs the United States Trade Representative to reject provisions in the negotiation of any trade agreement that would raise drug prices in the U.S., extend periods of patent exclusivity, or remove flexibilities in U.S. law regarding drug pricing.” Additionally, the bill:
would prohibit anti-competitive arrangements between brand and generic drug makers where the brand name drug manufacturers pays the generic manufacturer to delay bringing their generic alternative to market. According to the FTC, these anticompetitive deals cost consumers and taxpayers at least $3.5 billion in higher drug costs every year. In FY 2012, the FTC found that there were 40 potential pay-for-delay deals involving 31 branded products with combined U.S. sales of $8.3 billion.
Finally, the bill also would terminate any market exclusivity if fraud is demonstrated, which would include “off-label promotion, kickbacks, anti-monopoly practices, and Medicare fraud.” Interestingly, the bill further requires:
pharmaceutical companies to publicly report information that affects drug pricing, including the total costs incurred for research and development and clinical trials, as well as the portion of drug development expenses offset by tax credits or paid by federal grants.
The legislation also requires drug companies to report not only the price information charged to federal payers, but also requires companies to submit prices, profits, and sale information in other countries in which those products are sold.
The additional information will likely set the stage for more criticism about the current system. More information about the subsidization of federal research through the Bayh-Dole Act for prescription drugs, particularly biologics, will be interesting. The bill in its entirety can be found, here.
Mike Mireles at 00:59:00