Retiree Best Interest

BIG PHARMA VS. RETIREES:

WHO’S FIGHTING FOR THE LITTLE GUYS?

The price of Daraphrim skyrockets 5,000 percent. The list in their cost sharing. This proposed legislation would
price on the EpiPen climbs from $57 to $500 in just 10 years. add a cap for out-of-pocket drug costs beyond a certain
We see it in the news and shake our heads. Retirees see threshold. This is critical because people with high drug
it and shake in their shoes. Reducing the cost of medical costs end up entering a “catastrophic” phase of coverage.
care for seniors isn’t easy, especially when the first point
of reform is Big Pharma. Who’s protecting retirees who
take high-priced specialty drugs? Who’s confronting this
challenge felt by millions of Americans? Here’s a round-up
of actions being taken on national and state levels. A sobering statistic: the number of seniors who
reached the catastrophic phase has almost
The FDA: New Policies to Spur Competition doubled over a four-year period, to more than 1
million people in 2015, according to a study by the
Although the FDA doesn’t control drug pricing, their Kaiser Family Foundation.
policies can help leverage competition in the marketplace.
For example, they plan on releasing policies aimed at
spurring competition for complex drugs. To accomplish
this, they want to improve the efficiency of the generic
The Senate: Out to HELP
drug approval process.
The Senate Health, Education, Labor and Pensions (HELP)
The FDA’s goal is to bring generic competition to a category Committee is holding three hearings this year concerning
of drugs known as complex drugs. This is a difficult task for the high price of prescription medicines. The first hearing
generic drug developers because these drugs, by nature, took place in October and looked to answer key questions:
are complex, requiring more scientific and regulatory
oversight for approval. Their challenge is establishing that • What are rebates and how do they impact
the generic versions are bioequivalent and have the same consumers?
active ingredient as the brand-name drug.
• Who pays the cost of prescription drugs?
New policies may help the process. The FDA is issuing
Under the microscope were Pharmacy Benefits Managers
a draft guidance to assist ANDA (Abbreviated New
(PBM), accused of benefiting and even incentivizing higher
Drug Applicant) and prospective applicants in creating
prices for prescription medicines. To combat this, Senator
and submitting meeting requests. These meetings are
Ron Wyden (D-OR), introduced a bill earlier this year that
designed to jumpstart communication between generic
would require PBMs in Medicare to disclose rebates
drug applicants and the FDA early in the generic drug
provided by drug manufacturers. For the second and third
program.
upcoming hearings, the HELP Committee’s focus will be on
the process of bringing drugs to market and how they’re
The Congress: Creating a Maximum Out-of-Pocket
paid for.
Expense for Seniors
Congress is considering adding a provision to Part D which In other Senate news, Senator Dick Durbin (R-IL) recently
would create an out-of-pocket maximum for any senior introduced the sweeping Drug Price Transparency in
Communications Act of 2017, a piece of legislation
designed to stop unfair and deceptive trade practices.
The States: Making Their Own Efforts to Curb Rising
Drug Prices
All around the country, states aren’t waiting for the U.S.
government to act. Instead they’re taking matters into their
own hands by working to lower drug prices in actionable
ways. Here are some notable highlights:
Michigan
Democratic legislators in the Wolverine State have
proposed a bill to reduce prices for prescription drugs by
demanding pharmaceutical companies to justify excessive
price increases. According to ASH Clinical News, the bill
would create a 13-member Prescription Drug Consumer
Protection Board comprised of consumer advocates,
drug purchasers and state department heads who would
review price increases on prescription medications. The
bill would also allow Michigan’s state attorney general to
investigate “grossly excessive” price hikes. To comply with
the bill, pharmaceutical companies would need to submit
documents justifying any price increase of more than 10
percent in one year or 30 percent in five years. Companies
that violate the rule would be fined $100,000.
Nevada
Companies in Nevada manufacturing diabetes medications
are required to disclose price histories and hikes above
the inflation rate.
Maryland
The state attorney general can take legal action when
“essential” generic drug prices are raised by 50 percent or
more in a two-year period.
California
In 2016, the Golden State drafted Proposition 61, a ballot
measure that was designed to control prescription prices
by legislating that state agencies would pay no more for
medicines than the Federal Department of Veterans Affairs.
Unfortunately, the proposition was narrowly defeated.
State of the Union
Nearly 176 bills on pharmaceutical pricing and payment
have been introduced this year in 36 states, according to
the National Conference of State Legislatures. State by
state drug pricing transparency legislation can be tracked
here.
This is a Good Start.
But Retirees Need — and Deserve — More
The U.S. federal government and states must find new and
strategic ways to incentivize Big Pharma to sell prescription
drugs at lower prices to all Americans — especially retirees
and seniors. Avenues that could be explored include:
• Tax credits to defray the cost of drugs
• Joint pharma and insurance industry subsidization
of Colleges and Universities to defray the cost of
research and development through private and
public partnerships
The bottom line is that a multi-channel, local, state and
federal approach will be imperative in order to control
Big Pharma and help the little guy — retirees and seniors
who need critical prescription medication to help maintain
health and decrease the risk of costly hospitalization.
If you would like to learn more about how
AmWINS Group Benefits could support your retirees,
please visit: www.retireebenefitchoice.com.
References
Capazzo, Christi. “Michigan Legislators Propose Bill to Curb Drug Prices.” ASH
Clinical News, STAT News, 5 Sept. 2017, www.ashclinicalnews.org/
online-exclusive/michigan-legislators-propose-bill-curb-drug-prices/.
Cubanski, Juliette, Tricia Neuman, Kendal Orgera, and Anthony Damico. “No
Limit Medicare Part D Enrollees Exposed to High Out-of-Pocket Drug
Costs Without a Hard Cap on Spending.” The Henry J. Kaiser Family
Foundation, 7 Nov. 2017, www.kff.org/medicare/issue-brief/no-limit-
medicare-part-d-enrollees-exposed-to-high-out-of-pocket-drug-costs-
without-a-hard-cap-on-spending/.
Tirrell, Meg. “In Drug Price Hearing, Congress Tries to Answer Some Basic
Questions.” CNBC, 13 June 2017, www.cnbc.com/2017/06/13/in-drug-
price-hearing-congress-tries-to-answer-some-basic-questions.html.
The Council of Insurance Agents & Brokers:
https://www.ciab.com/resources/drug-prices-tax-bill-flood/
https://www.ciab.com/download/11028/