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Senators Urge Obama to Take Action on Drug Prices

Posted 03 February 2016 | By Zachary Brennan 

Senators Urge Obama to Take Action on Drug Prices

Policy solutions to bring down the rising tide of prescription drug prices should be included in next year’s budget, eight senators said in a letter sent to President Barack Obama on Tuesday.

Examples of ways Obama could help to lower drug costs include requiring drugmakers to provide rebates on prescriptions for Medicare Part D low-income subsidy enrollees “in the same way that it does already for Medicaid recipients,” the senators said, noting that about $120 billion could be saved, according to a Congressional Budget Office report from 2013.

Pew researchers recently looked into how the Secretary of Health and Human Services (HHS) might be allowed to negotiate drug prices in Medicare Part D, noting that a mechanism would need to be created for negotiations to take place between HHS and drug manufacturers.

But as the New York Times noted Tuesday, because Medicare is currently required to cover almost every cancer treatment that is approved by FDA, if a company markets a new cancer medicine with a high price, “there’s not much a Medicare plan can do to talk it down.”

The senators also call on Obama to include some of the same provisions that were in his FY2016 budget (but which failed to make it into the final budget) in this year’s budget plan, which is expected to be unveiled next week. Such provisions include prohibiting pay-for-delay agreements where generic drugs are delayed entry to the market, increasing discounts for Medicare Part D recipients and altering reimbursement for drugs administered under Medicare Part B.

Rising generic drug prices is another concern of the senators, who include Democrat candidate for president Bernie Sanders (VT), Al Franken (D-MN), Sheldon Whitehouse (D-RI), Sherrod Brown (D-OH), Tom Udall (D-NM), Angus King (I-ME), Jack Reed (D-RI) and Tammy Baldwin (D-WI).

“The price of more than one-fourth of generic drugs rose 10 to 100 percent or more in 2014. In your budget for FY17, we encourage you to include policies that will promote competition in the generic market, improve market transparency, and prevent companies from gouging prices on essential medicines,” they write.

Value-based decisions, as opposed to volume-based decisions, is another goal of the senators, who noted that private-sector initiatives testing the value of new therapies are already underway.

“Your administration can begin this engagement by launching demonstration projects testing various models of value-based payments, such as indication-specific pricing, reference pricing, bundled payments, or other pay-for-performance models,” the senators say.

The letter comes as the House Oversight Committee will address rising drug prices in a hearing on Thursday


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