WASHINGTON, D.C. — In response to the House Judiciary Committee passing a legislative package that would stop REMS abuses, curb anti-competitive pay-for-delay deals, address sham citizen petitions, and regulate PBM spread pricing, David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs Now, issued the following statement:
“We are encouraged by continued Congressional action to address an array of abusive tactics Big Pharma uses to block competition and keep drug prices high. I am grateful to Chairman Nadler, Ranking Member Collins, and members on both sides of the aisle for their work on one of the most critical issues facing Americans — skyrocketing prescription drug prices.
“We still have a long way to go to fix our broken system and lower drug prices for all Americans. Today’s actions are a step forward, but certainly not the last. We are eager to work with Congress to continue down this path of reform.”
BACKGROUND:
Today’s hearing is the latest in a flurry of action on Capitol Hill to address what 8 in 10 Americans say is the “unreasonable” cost of prescription drugs. This year, the Senate Finance Committee, Senate Aging Committee, House Committee on Oversight and Reform, House Ways and Means Committee, and the House Energy and Commerce Committee have all held hearings or markups on the topic of skyrocketing drug prices. The latter two committees have both passed a bipartisan package of bills aimed at addressing Pharma abuses.
The topics included in today’s bipartisan-passed legislative package address:
REMS ABUSES: Brand drug companies use a safety program called Risk Evaluation and Mitigation Strategies (REMS) as a pretext for not selling drug samples to generic companies, which need the brand product in order to develop an equivalent and lower-priced competitor. The CREATES Act — part of today’s legislative package — would address delay tactics that are used by brand drug manufacturers to block lower-priced generic drugs. Taxpayers could save $3.9 billion by stopping this abuse, which the FDA has called “unfair and exploitative.”
PAY-FOR-DELAY: Brand drug companies pay off generic companies that plan to bring a competitor to market. In exchange for this payment, the generic manufacturer delays its product’s entry into the market and the companies share in the fruits of the extended monopoly. The Preserve Access to Affordable Generics and Biosimilars Act, passed by the Judiciary Committee today, would limit deals in which brand and generic drug manufacturers use anti-competitive pay-off agreements to delay cheaper generic and biosimilar drugs from reaching patients.
SHAM CITIZEN PETITIONS: Citizen petitions can be filed at the Food and Drug Administration requesting FDA action. But brand name drug makers filed 92 percent of all citizen petitions between 2011 and 2015 — all aimed at blocking cheaper generic drugs. The FDA denied more than 9 of every 10 of those petitions. Today, the Judiciary Committee took a step toward ending that abuse by passing the Stop STALLING Act.
PBM SPREAD PRICING: Pharmacy Benefit Managers, the drug pricing middlemen, rip off taxpayers and patients with a practice called spread pricing, in which PBMs retain the difference between what they bill insurers and employers and what they pay to pharmacies. States like West Virginia, Ohio, Arkansas, Connecticut, and Kentucky have already investigated or cracked down on spread pricing in state Medicaid programs. The Prescription Pricing for the People Act of 2019, passed by the Judiciary Committee today, would authorize the FTC to study reimbursement practices of PBMs and issue a report with policy recommendations.
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WASHINGTON, D.C. — It’s easy to get lost in the day-to-day shuffle, but at the end of this week, one fact is undeniable: Big Pharma is on the run. Over the last week, Washington took meaningful steps on legislation that would curb drug company price gouging, end abuse of citizen petitions, stop drug companies from abusing the patent system, demand more transparency from pharmacy benefit managers, and protect people who are insulin dependent.
“At the end of this week, it’s undeniable that the momentum lies with patients working to fix our broken system,” said Ben Wakana, Executive Director of Patients For Affordable Drugs Now. “Drug corporations reach into the pockets of hardworking Americans through dirty tactics like evergreening, pay-for-delay deals and unfair price gouging — and it’s time it ends. The fact that both parties are coalescing around this issue should terrify the greedy executives running drug corporations.”
BIPARTISAN LEGISLATION CONSIDERED THIS WEEK WOULD:
END CITIZEN PETITION ABUSE: Brand-name drug makers were behind 90 percent of all citizen petitions filed between 2011 and 2015 –– all aimed at blocking cheaper generic drugs. The FDA denied more than nine of every 10 petitions. The Ensuring Timely Access to Generics Act, introduced yesterday, would give the FDA the ability to reject citizen petitions if it determines the purpose of the petition is to delay generic drug entry.
Lead Sponsors: Senators Bill Cassidy (R-LA), Cory Gardner (R-CO), Jeanne Shaheen (D-NH), and Michael Bennet (D-CO)
STOP DRUG COMPANY EVERGREENING: Drug corporations make tiny changes to their products in order to extend patent protections and stall cheaper generic options from hitting the market. Introduced yesterday, the REMEDY Act would address evergreening by rooting out non-innovative patents filed by brand drug corporations.
Lead Sponsors: Senators Bill Cassidy (R-LA) and Dick Durbin (D-IL)
CLOSE AN INSULIN LOOPHOLE: The FDA is in the process of recategorizing insulin as a biologic. The Protecting Access to Biosimilars Act, introduced Thursday, would ensure recategorized insulins do not receive an extra 12 years of market protections. That would mean less-expensive insulins could come to market sooner, giving patients relief.
Lead Sponsors: Senators Bill Cassidy (R-LA) and Tina Smith (D-MN)
CURB DRUG COMPANY PRICE GOUGING: Currently, drug corporations can raise prices without notice or justification. Language included in the Prescription Drug STAR Act would require drug manufacturers provide written justification for price increases at least 10 percent or $10,000 over 1 year, 25 percent or $25,000 over 3 years, or a starting drug price of more than $26,000. The drug company’s justification would be made public on the HHS website and failure to report justification would result in a $10,000 per day fine. The bill passed out of the House Ways & Means Committee unanimously on Tuesday.
Lead Sponsors: Rep. Richard Neal (D, MA-01) and Kevin Brady (R, TX-08)
INCREASE PBM TRANSPARENCY: Pharmacy Benefit Managers –– the drug middlemen who are supposed to operate on behalf of patients –– are a black box. PBMs negotiate drug discounts, but the public doesn’t know how much, if any, of the rebate reaches patients and consumers. Language passed unanimously by the House Ways and Means Committee on Tuesday as part of the Prescription Drug STAR Act would make information on PBM rebates public on HHS’ website. The information would include, by drug class, the aggregate amount of rebates, discounts, or price concessions that are passed through to the plan sponsor.
Lead Sponsors: Rep. Richard Neal (D, MA-01) and Kevin Brady (R, TX-08)
BONUS (from last week, but still):
PROTECT AMERICANS FROM PAYING MORE THAN OTHER COUNTRIES: Americans pay two times more for prescription drugs than citizens in other developed countries. The Transparent Drug Pricing Act, referred to the Senate HELP Committee April 1, would ensure the list price for prescription drugs does not exceed the lowest retail list price for the drug among Canada, France, the United Kingdom, Japan, or Germany.
Lead Sponsors: Senators Rick Scott (R-FL) and Josh Hawley (R-MO)
RESTRICT SHADY PAY-FOR-DELAY DEALS: Brand drug companies pay off generic companies that plan to bring a competitor to market. In exchange for this payment, the generic manufacturer delays its product’s entry into the market. HR 1499, the Protecting Consumer Access to Generic Drugs Act, which passed unanimously out of the Energy and Commerce Committee last week, would limit deals in which brand and generic drug manufacturers use anti-competitive pay-off agreements to delay cheaper generic and biosimilar drugs from reaching patients.
Lead Sponsor: Rep. Bobby Rush (D, IL-1)
END REMS ABUSES: Brand drug companies use a safety program called Risk Evaluation and Mitigation Strategies (REMS) as a pretext for not selling drug samples to generic companies, which need the brand product in order to develop an equivalent and lower-priced competitor. The CREATES Act which passed unanimously out of the Energy and Commerce Committee last week would address delay tactics that are used by brand drug manufacturers to block lower-priced generic drugs. The U.S. could save $3.9 billion by stopping this abuse, which the FDA has called “unfair and exploitative.”
Lead Sponsors: Representatives David Cicilline (D, RI-1), James Sensenbrenner (R, WI-5), Jerry Nadler, (D, NY-10), Doug Collins (R, GA-9), Peter Welch (D, VT-At Large), David McKinley (R, WV-1)
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WASHINGTON, D.C. — During a noteworthy exchange at today’s Energy and Commerce Committee hearing, Health and Human Services Secretary Alex Azar publicly endorsed four legislative proposals to lower drug prices and help patients: curbing REMS abuses, ending pay-for-delay deals, banning evergreening, and ending sham Citizen Petitions.
“With the Trump Administration endorsing four common-sense solutions to address a problem eight out of 10 American voters agree must be solved, it’s time for Congress to act,” said Ben Wakana, Executive Director of Patients For Affordable Drugs Now. “Congress should pass these proposals immediately to crack down on anticompetitive behavior and stop insidious tactics that disrupt the free market and hurt patients.”
During today’s hearing, Secretary Azar told Democratic Congressman Peter Welch (VT), the administration supported legislation to fix:
REMS ABUSES: Brand drug companies use a safety program called Risk Evaluation and Mitigation Strategies (REMS) as a pretext for not selling drug samples to generic companies, which need the brand product in order to develop an equivalent and lower-priced competitor. The CREATES Act would address delay tactics that are used by brand drug manufacturers to block lower-priced generic drugs. The U.S. could save $3.9 billion by stopping this abuse, which the FDA has called “unfair and exploitative.”
PAY-FOR-DELAY: Brand drug companies pay off generic companies that plan to bring a competitor to market. In exchange for this payment, the generic manufacturer delays its product’s entry into the market. Legislation would limit deals in which brand and generic drug manufacturers use anti-competitive pay-off agreements to delay cheaper generic and biosimilar drugs from reaching patients.
EVERGREENING: Drug corporations often change drugs incrementally and patent the new product, which extends a corporations’ monopoly pricing power. For example, a company might move from a tablet to a capsule and apply for a new patent. This gaming of the system should not be permitted under U.S. law.
CITIZEN PETITIONS: Brand drug makers were behind 92 percent of all citizen petitions filed between 2011 and 2015 –– all aimed at blocking cheaper generic drugs. The FDA denied more than nine of every 10 of those petitions. Congress should stop sham citizen petitions.
TRANSCRIPT
Congressman Peter Welch: You do support, as I understand it, ending pay-for-delay. Is that the case?
Secretary Alex Azar: We do. In fact, our budget has a unique pay-for-delay provision in that if you do a pay-for-delay agreement, you would actually be penalized in the Medicare Part B system.
Welch: Right. And you want to curb the REMS abuses?
Azar: Absolutely do. So, the CREATES Act and working with you on that.
Welch: Right. And the product hopping that has been occurring is another way. Are you opposed to that as well?
Azar: I want to make sure I’m understanding.
Welch: It’s the abuse of Citizen Petitions, it’s product hopping, and other forms of evergreening.
[Crosstalk]
Azar: Yes, we want to crack down on any forms of manipulation or evergreening of patents and exclusivity beyond what the original deals were.
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