Public Citizen Priorities for the 2023 Bipartisan Drug Pricing Package

This year, the Senate is anticipated to vote on a package of prescription drug reforms. Public Citizen urges policymakers to be ambitious and expansive in the scope of bipartisan reforms included in the package. Specifically, in addition to reforms targeting PBMs widely expected to be incorporated, the package should include:

• Insulin reform that ensures people with private insurance and those without insurance, who are most vulnerable to insulin rationing, have access to the insulin they need.
• Legislation that addresses anticompetitive tactics of drug corporations, including pay-for-delay settlements, product hopping, and citizen petition abuse.

Insulin

A recent study published in the Annals of Internal Medicine found that 1.3 million people in the United States ration insulin. People without insurance were most likely to ration insulin (29.2% ration insulin), followed by those with private insurance (18.8%). Rationing is disproportionately high for Black Americans, of whom 23.2% ration insulin, compared with 16% of Hispanic and White Americans. Hopefully soon, some of these patients will feel improvements in access and pricing due the policies that have been enacted, but many require further relief. While Eli Lilly CEO David Ricks promised at a Senate HELP Committee hearing that the company would “leave our prices as they are for the insulins on the market today,” other insulin corporations refused to make similar commitments, and none offered any pricing constraint for future products.

This spring, Sens. Warnock and Kennedy introduced the Affordable Insulin Now Act. Crucially, their bill would establish a federal program under which pharmacies and health providers are reimbursed the difference between the out-of-pocket cost to an individual and $35. In other words, the protection now afforded to people with Medicare would be expanded to people without insurance, who are left out of competing proposals like the INSULIN Act.

Some have claimed that the INSULIN Act is broader more comprehensive than the Affordable Insulin Now Act. But this argument fails in two ways:

1) Unlike the Affordable Insulin Now Act, the INSULIN Act does not expand out-of-pocket cost protections to people without insurance, who are most vulnerable to cost-related rationing.

2) While the INSULIN Act includes provisions seeking to lower insulin prices, these sections are in large part redundant with policies in other bills that have advanced through the HELP committee. Specifically, section 201 of the INSULIN Act is redundant with the PBM Reform Act.[1] Section 301 of the INSULIN Act is redundant with the Ensuring Timely Access to Generics Act.

Moreover, there is nothing that would prevent these and other provisions from title III of the INSULIN Act from coexisting alongside more expansive out-of-pocket protections provided for people with private insurance and without insurance. Indeed, combining the more expansive out-of-pocket cost protections of the Affordable Insulin Now Act with INSULIN Act and other policies to lower prices charged by insulin manufacturers and other drug corporations would provide a more comprehensive approach to expanding insulin access than either proposal in isolation.

Anticompetitive Pharma Tactics

For years, drug corporations have attempted to evade scrutiny by pointing at PBMs. While criticisms of PBMs are not unfounded, policymakers should not lose sight of the anticompetitive behaviors of drug corporations as it crafts a bipartisan reform package.

Pay-for-delay deals, also known as reverse payment settlements, occur when a brand-name drug corporation provides something of value to a generic or biosimilar manufacturer in exchange for that manufacturer delaying the launch of a competing product. Pay-for-delay deals post-Actavis decision are estimated to cost taxpayers and patients from $6.2 to $37.1 billion dollars per year. Making pay-for-delay patent settlement deals presumptively anticompetitive and providing the Federal Trade Commission (FTC) sufficient resources for aggressive enforcement would help put an end to this practice.

Product hopping occurs when a drug corporation introduces a follow-on product with no significant therapeutic benefit over its predecessor and makes efforts to switch patients onto the new product to prevent potential generic or biosimilar competitors from gaining market share. This effectively prolongs monopoly pricing and profits for the drug corporation engaging in the abuse. Product hops of just five drugs have been estimated to cost the United States $4.7 billion annually.  Enacting a prohibition on product hopping and empowering the FTC to pursue product hopping claims with clear standards would stop drug corporations from taking advantage of these unfair monopoly extensions.

Citizen petition abuse occurs when a drug corporation formally raises with the Food and Drug Administration (FDA) safety concerns of a generic drug application to delay the launch of competition, and thereby inappropriately prolong the monopoly period for a brand-name drug. Drug corporations that file spurious petitions raise drug prices for consumers and taxpayers and hamper the FDA with the burden of reviewing sham filings. Empowering the FDA to dismiss sham petitions filed with the primary purpose of delaying competition and the FTC to pursue suits against such petitioners would support more timely generic competition and lower prices for patients and consumers.

[1] In fact, the PBM Reform Act is more expansive, providing full rebate pass-through for all drugs, not only insulin products, as proposed under the INSULIN Act.