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  • D. Maurice Kreis

An Open Letter to my Member of Congress

Dear Representative Kuster:


As the parent of a young person with cystic fibrosis, I was pleased to learn that you and your colleagues in the House Democratic Caucus have resurrected plans to include drug pricing reform in the comprehensive budget reconciliation package you are hoping to get to President Biden for his signature. I expect that, in due course, I will be receiving some kind of statement from you lauding this as progress in the quest to reign in bloated prices for prescription medications.


Indeed, I hope you continue to support these provisions. But, make no mistake, this is no occasion for dancing in the streets. If anything, the drug pricing provisions in the reconciliation package demonstrate how disproportionately influential lobbyists from Big Pharma truly are.


Yes, creating a $2,000 annual out-of-pocket max for Medicare Part D beneficiaries will make certain drugs significantly more affordable for senior citizens. But, to quote my friends at the Institute for Clinical and Economic Review (ICER), the drug pricing compromise in the reconciliation package "does not solve the structural cost and value concerns associated with the U.S. pharmaceutical market -- particularly related to the launch prices of therapies that lack any market competition."


For my purposes, "therapies that lack any market competition" means "expensive drugs that my daughter must take if she is to survive and thrive as a person with cystic fibrosis."


As you know, what will force Big Pharma to charge more reasonable prices for everyone is allowing the Medicare program to negotiate with pharmaceutical firms on the prices of their expensive medications, in contrast to current law which requires Medicare to be a price taker. Unfortunately, the reconciliation package opens Medicare price negotiation to just a handful of expensive drugs -- one of which are, to my knowledge, drugs that people with CF take.


Indeed, there is an outright exclusion for drugs that treat orphan diseases. Since CF is considered an orphan disease (because there are only 30,000 people in the U.S. with cystic fibrosis) I assume we will never see relief for the high cost of CF medications via the provisions in the reconciliation package. That's awful!


The number of drugs subject to price negotiation slowly creeps toward a maximum of 20 --yes, just twenty! -- and drugs in their period of exclusivity are protected from being placed on the list. "Exclusivity," of course, is a monopoly bestowed upon drugs by the Food and Drug Administration that bolsters the protection drug manufacturers already get via their patents. Drug companies have all kinds of tricks for extending the exclusivity periods, usually by making small changes in the drugs as they hear the end of their exclusivity periods.


Here's what the folks at ICER had to say:


Wall Street appears to view the tentative agreement as a win for industry. In a note to biotech investors, Baird's biopharma analyst Brian Skorney explained that the Medicare negotiation “could have almost negligible impact on biotech and pharma” and that the out-of-pocket max “could drive increased utilization, and thereby more profitability” for pharmaceutical companies. Bernstein’s biopharma analyst Ronny Gal went one step further, arguing that “the compromise seems designed to let legislators claim an achievement while granting pharma protection,” and that the Democrats’ ostensible political victory could be an additional boost for the pharmaceutical sector because it may keep Congress from revisiting the issue in the future. Meanwhile, the financial services firm Raymond James speculated that “pharma’s CEOs are likely popping champagne and smoking cigars.”

Altogether, it is cosmically discouraging to see how influential Big Pharma is in watering down a policy initiative that an overwhelming majority of Americans support.

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