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ASHP Continues Working on Solutions to Rising Drug Prices

Feb 27, 2017

Paul W. Abramowitz, Pharm.D., Sc.D. (Hon.), FASHP

RISING DRUG PRICES have affected virtually every segment of healthcare. From consumers to hospitals to third-party payers, all have been forced to make difficult decisions regarding healthcare choices. Patients and ASHP members’ organizations are feeling the impact of escalating drug prices, as is the entire healthcare system. ASHP is well aware of this alarming trend and is diligently working with a wide array of stakeholders and bipartisan policymakers to explore practical and sustainable solutions.

This problem is about public health and the downstream effects that high drug costs have on the health of patients and the ability of our healthcare institutions to care for them. For example, we know that when patients face higher costs they are more likely to not fill their prescriptions and may even ration their medications. Nonadherence often leads to more expensive therapies or hospital stays due to complications resulting from untreated or undertreated conditions. Payers have also had to make difficult choices in the face of spiraling drug costs, including challenging formulary decisions. Hospitals and health systems may be forced to make difficult decisions to offset rapidly rising drug costs.

Even generic drugs widely used to manage the cost burden on individual patients and our hospitals and clinics are now experiencing dramatic price increases. Instead of a robust marketplace flush with competition that drives prices lower, sometimes there appears to be little or no competition, resulting in a single company producing a generic product. Without competition, manufacturers can raise their prices as high as the market will bear. In 2016, a study commissioned by the American Hospital Association and the Federation of American Hospitals noted that drug spending increased 8.5% in 2015, while inflation increased only 0.7%. This trend cannot be sustained. The study provided an example of one hospital where “the price increases for just four common drugs, which ranged between 479 and 1,261 percent, cost the same amount as the salaries of 55 full-time nurses.” Unfortunately, while this may be an extreme example, the typical drug price increases in a hospital or health system place a heavy burden on the healthcare team and its organization to ensure their patients have access to medication therapies.

In 2016, ASHP joined the Steering Committee of the Campaign for Sustainable Rx Pricing (CSRxP), a coalition consisting of physicians, consumers, payers, hospitals, health systems, and patient advocacy groups. We believe that CSRxP, as a coalition of nationally prominent organizations, has the best chance of effecting change at the national level regarding drug price increases. With ASHP’s input, CSRxP developed a policy platform that seeks to address this problem through market-based solutions, focusing particularly on competition, value, and transparency. ASHP and other members of the Steering Committee have begun conducting joint meetings with congressional staff to discuss bipartisan policy solutions. CSRxP has also been implementing an ongoing media strategy to call attention to drug pricing and place this issue on the national agenda.

Efforts to address the problem through legislation are already underway. For example, S. 297 and H.R. 749 would require the Food and Drug Administration (FDA) to expedite approval of an Abbreviated New Drug Application (ANDA) when a drug is in short supply or little or no competition exists. Another bill, S. 124, would prohibit brand companies from paying generic manufacturers to delay introduction of a generic version, otherwise known as “pay for delay.” ASHP believes these are steps in the right direction, but more can and should be done to promote competition and limit marketplace manipulation through pay-for-delay or restricted distribution.

Also under consideration in Congress is legislation (S. 92, S. 183) that would allow drugs to be imported from other countries, such as Canada, where prices are significantly lower. This approach, however, is not one that ASHP supports, due to safety concerns over the origin of the drug and the disconnect of the pharmacist-patient relationship. Another policy option would be to allow the government to negotiate drug prices directly with manufacturers for drugs covered by Medicare Part D. However, this legislation (S. 348, H.R. 242, S. 41) does not have bipartisan support.

Finally, the Prescription Drug User Fee Act (PDUFA) is up for reauthorization this year and may serve as a legislative vehicle to address this problem. This reauthorization is considered must-pass legislation, and we have already begun discussions with key congressional staff about the policy goals of CSRxP and their potential fit within PDUFA.

ASHP remains an active leader in CSRxP and will continue pushing for solutions to the problem of rising prescription drug prices. As the only national pharmacy organization on the Steering Committee, we will continue to work collaboratively with our partners to provide the perspective of our members and to help ensure that affordable medications are accessible to those who need them.

Thank you for all that you do on behalf of your patients and for being members of ASHP.

Paul

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