Think Tank Recommends Policies to Rein in Drug Costs

by admin | September 21, 2015 3:18 pm

September 21, 2015—A think tank aligned with the Democratic Party has published a 45-page plan aimed at cutting prescription drug costs and giving drugmakers a bigger incentive to bring highly effective products to market. [ms-protect-content id=”2799″]

The Center for American Progress said its new report “recognizes that enough is enough and that the time has come for the public and private sectors to come together and implement changes to halt sky-high drug prices.”

“Prescription drugs save lives and can prevent costlier, more invasive treatments, but that doesn’t mean the status quo is working,” said Topher Spiro, the group’s vice president for health policy. “The growing crisis around drug costs is unsustainable. We are proposing a set of reforms that would lower drugs costs across the board and ensure that prices reflect the benefits to patients.”

The center’s founder, John Podesta, is chairman of Hillary Clinton’s presidential campaign, and the center’s president, Neera Tanden, has been a senior domestic policy adviser to her, President Clinton, and President Obama.  Hillary Clinton is expected to address rising drug costs in detail later this week.

Clinton’s main challenger for the Democratic nomination, Sen. Bernie Sanders (I-Vt.), recently introduced legislation[1] to make generic and brand-name medicines more affordable, including giving the federal government authority to negotiate Medicare Part D drug prices with manufacturers. In a break from center-left orthodoxy on that subject, CAP does not call for giving the federal government such power.

CAP’s recommendations include:

• Require drug manufacturers to be more transparent about their research and development, production, and sales and marketing costs. If drug companies do not invest a minimum amount of money in R&D, make them pay a refund to the National Institutes of Health.

• Create an independent panel of experts to rate new drugs based on their effectiveness relative to existing ones and publicize the ratings in drug labeling and advertising. To strengthen payers’ bargaining position with manufacturers, have this same organization recommend what the price should be based on the ratings. If a company charges more than 20 percent above the recommended price, and if the drug’s patent resulted from federally funded research, the federal government could license the patent to others to make cheaper generic versions.

• Give insurers and pharmacy benefit managers a limited exemption from antitrust laws to collectively negotiate specialty drug prices.

• Reform Medicare payment for physician-administered drugs.

• Pay more for new drugs relative to existing drugs only if the new ones are more effective. Likewise, pay different amounts for different uses of the same drugs based on the effectiveness of the drug’s use. Vary Medicaid drug rebates based on comparative effectiveness research, with more-effective drugs paying a lower rebate and less-effective drugs paying a higher rebate.

• Cap cost-sharing for drugs at $3,250 per year and give beneficiaries more information about prescription drug coverage.

The full report is available here[2]. [/ms-protect-content]

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