March 31, 2017 – With growing bipartisan support for feasible measures to control skyrocketing prescription medication costs, a Health Affairs Blog post published today describes four proposals to strengthen and modernize cost control measures that already exist in the United States. The Blog post, co-authored by Tim Horn, Treatment Action Group’s Deputy Executive Director of HIV & HCV Programs, and Sean Dickson, Senior Manager, Health Systems Integration, at NASTAD (National Alliance of State and Territorial AIDS Directors), is based on a critical analysis, Tackling Drug Costs: A 100-Day Roadmap, produced in conjunction with the Fair Pricing Coalition (FPC) and circulated widely among Congressional leadership.
“Federal legislation has not maintained pace with drug manufacturers’ tactics to circumvent statutes and regulations already in place to control prescription drug costs,” said Dickson, lead author of the original report. “Political inertia and existing statutory penalties are failing to stop exorbitant drug prices. Our analysis clearly indicates that the Trump Administration and Congress can readily fix the existing framework to reduce federal drug spending and discourage egregious price increases in the private market.”
The Health Affairs Blog post highlights four pathways to promptly modernize and strengthen existing regulations and statutes to control drug costs, drawing on existing authority and concrete legislative actions:
- Fix the Formulas: Modernize and strengthen current ceiling price formulas to ensure that government payers are not paying more than commercial payers;
- Enhance Existing Penalties: Remove inflation penalty caps, increase penalties on drugs with the most egregious price hikes, and apply penalties to new drugs with launch prices far in excess of top sellers in the same class;
- Pool Purchasing Power: Increase inter- and intra-agency collaboration to consolidate Federal and State negotiating power; and
- Pull Back the Curtain: Buttress existing transparency tools while studying the effects of additional manufacturer price and payer cost disclosures.
“It is high time for the government to clamp down on drug pricing tactics that drive up health care costs and invariably hurt health care consumers,” said Horn, collaborating author on Tackling Drug Costs. “There’s a populist impetus for prescription drug cost restraints and growing support for executive and legislative action. The Trump Administration and Congress must honor campaign promises in this regard and move swiftly and decisively to reduce drug prices while incentivizing scientific ingenuity and discovery – the health care system, taxpayers, and those who rely on life-saving prescription drugs, are demanding it.”
Horn T and Dickson S. Modernizing and strengthening existing laws to control drug costs. Health Affairs Blog. 2017 March 31. Available from: http://healthaffairs.org/blog/2017/03/31/modernizing-and-strengthening-existing-laws-to-control-drug-costs/