TAPP Responds to U.S. Senate Finance Committee Request for Information Seeking Input on Commonsense Policy Options to Lower Drug Prices for Patients
The Trade Alliance to Promote Prosperity today responded to a U.S. Senate Finance Committee Request for Information (RFI) seeking input on commonsense policy options to lower drug prices for patients.
In part, TAPP wrote:
Congress should resist the temptation to equate “drug pricing reform” with government controls on pharmaceutical manufacturers. Instead, policymakers should focus first on increasing competition, eliminating distorted incentives, protecting patients from unnecessary out-of-pocket costs, and bringing transparency and accountability to pharmacy benefit managers (PBMs) and vertically integrated healthcare conglomerates.
TAPP recommends that Congress pursue these four principles:
Enact comprehensive PBM transparency and accountability reforms, including delinking PBM compensation from drug prices and rebates.
Ensure that negotiated discounts and savings benefit patients rather than being captured within the supply chain.
Address the anticompetitive consequences and conflicts of interest associated with vertical integration among insurers, PBMs, and pharmacies.
Reject international reference pricing and other government price-control mechanisms that could undermine American medical innovation and instead address foreign government policies that shift the cost of global pharmaceutical innovation onto American patients…
The Committee’s RFI correctly recognizes an important truth: Prescription drug affordability cannot be understood by looking only at the price established by the manufacturer.
Between the manufacturer and the patient sits an extraordinarily complicated system of PBMs, insurers, pharmacies, wholesalers, rebates, fees, discounts, formularies, networks, and increasingly vertically integrated corporations. At nearly every stage, financial incentives can affect which medicine a patient receives and how much that patient ultimately pays. Congress should make reforming that system its priority.
Thus, TAPP urges the Committee to pursue bipartisan legislation that delinks PBM compensation from drug prices and rebates; requires meaningful transparency regarding rebates, fees, spreads, and affiliated transactions; gives plan sponsors meaningful auditing authority; prevents anticompetitive pharmacy steering; protects patient cost-sharing assistance; ensures patients benefit from negotiated discounts; improves transparency surrounding generic drug markups; and scrutinizes conflicts created by vertical integration. At the same time, Congress should reject international reference pricing and other policies that risk weakening the American innovation ecosystem.
A prescription drug market built on competition, transparency, accountability, patient choice, strong intellectual-property protections, and properly aligned incentives offers the best opportunity to lower costs while ensuring that the United States remains the world’s leader in developing the next generation of lifesaving treatments and cures.