An Important Remedy to Pharma's Exorbitant Pricing
By Will Neer and Anisha Sehgal
Imagine being diagnosed with a life threatening illness. The immediate reactions of shock and panic may also be mixed with relief once your doctor informs you that there is an effective treatment available. However, that relief can quickly disappear and instead be replaced with hesitation and fear once the hefty price tag associated with the treatment is revealed. This unfair cycle of emotions is a process too many Americans and their families are forced to experience due to astronomical drug prices.
A type of drug commonly used to treat serious illnesses is a biologic. However, as prescription drug corporations often charge more than $100,000 annually for biologic treatments, many Americans are fighting insurer rationing or even turning to pill splitting. A piece of bipartisan legislation, S. 0394 / H.R. 5573, titled the Price, Relief, Innovation and Competition for Essential Drugs (PRICED) Act aims to remedy this problem. The PRICED Act would amend U.S. law and shorten the time that prescription drug corporations have monopolies on biologic medicines – and how long they can charge monopoly prices, thereby making these treatments more readily accessible.
A biologic drug is a complex molecule produced by a living cell. A biosimilar is to a biologic as a generic is to a name-brand drug; however, because of the way the drugs are produced, biosimilars aren’t exact copies of the biologic. Government-granted exclusivities and patent monopolies prevent less expensive biosimilars from entering the market. As a result, efficient access to affordable treatments for serious illnesses such as cancer, multiple sclerosis, and arthritis is inhibited.
The PRICED Act would amend current market exclusivity provisions in the Public Health Service Act by reducing the amount of time a biologic is eligible for exclusivity from 12 years to 7 years. During the current 12-year exclusivity period, drug corporations faces no competition because potential competitors are prohibited from producing biosimilars, providing pharmaceutical corporations with the freedom to charge whatever price they want. A five-year reduction in market exclusivity would significantly reduce drug prices, promote increased competition and provide Americans with access to the care and treatments that will help them live longer and healthier lives.
Legislation, like the PRICED Act, that places the health of Americans over the profits of corporations is in the best interest of this country. According to the most recent White House budget, reducing the period of exclusivity from 12 to seven years would save taxpayers nearly $7 billion over the next ten years, with savings increasing over time. In addition, several studies estimate the projected savings from the approval of biosimilars for current high-priced biologics to be anywhere from $44 billion to $253 billion over the next 10 years. Those numbers would grow substantially if competition began earlier, as under the PRICED Act.
The Obama Administration recently signed a so-called “free trade” agreement, the Trans-Pacific Partnership (TPP), which threatens access to medicines and potentially price-cutting reforms like the PRICED Act. The TPP would fatten giant drug corporations’ wallets by blocking competition and promoting the sale of high-priced medicines, rather than supporting public health. The TPP’s ambiguous language does not definitively define the exclusivity period on biologics, meaning corporations could try to use the TPP to block the PRICED Act; or even try to sue the U.S. government in unaccountable tribunals that are run by three corporate lawyers who rotate between judging these cases and representing corporations, using the TPP’s investment provisions. Reasonable interpretations of the TPP should mean those efforts fail, but, if enacted, the mere presence of TPP would give corporations a way to intimidate our government and attempt to prevent the reforms we need to protect our health.
By passing the PRICED Act, the U.S. government would demonstrate that it values people’s health and human rights over corporate greed and unjust monopolies. It does not have to be the case that someone’s income determines their ability to access healthcare. The PRICED Act would aid people across this country, regardless of their socioeconomic status, in caring for both themselves and their loved ones.