The Alliance

The Weekly Dose | 02.01.19

February 1, 2019 1:34 pm

Busy week. Congress held its first two hearings on the pricing issue. The Trump administration announced a proposal that could actually lower patients’ out-of-pocket costs at the pharmacy counter. And John and Laura Arnold made some audacious claims about the biopharmaceutical industry in a laughably one-sided segment on NBC Nightly News (do they really think the industry has imposed “a form of…oppression” on patients…?).

The hearings were a testament to the complexity of pharmaceutical pricing. There was plenty of predictable demagoguery about the industry, especially on the House side, but there was no clear consensus about what steps Congress should take to address the issue. To the extent there were flickers of agreement, it was over changing Medicare payments to physicians and insurers. Wherever this conversation ends up, Tuesday was just the beginning of what could be a very long process.


We are committed to having that conversation. Have questions? Need more info for a story? Email us. We look forward to working with you.



Patrick O’Connor – Executive Director

Rosemarie Calabro Tully – Communications Director




APMI Executive Director Patrick O’Connor released a statement this week responding to House and Senate hearings on drug prices.

“Today’s Senate Finance hearing was a perfect illustration of how complex this issue of drug pricing is. We saw a serious conversation about a topic on which there are no obvious answers. That lack of clarity was evident in the broad range of questions and answers, and we look forward to staying engaged in thoughtful debates that acknowledge the complexity and consequences of proposed policy changes.”

O’Connor’s statement and APMI’s communications regarding the hearings were featured in BioWorld and STAT News.


O’Connor also wrote an op-ed that appeared this week in Morning Consult:

“Bashing biopharmaceutical companies has become a popular pursuit for politicians in both parties. … The attacks have become so inflamed — and unmoored from reality — that one group accuses elected officials of taking bribes from the pharmaceutical industry and suggests its executives would rather ‘let children die’ than lower prices. That kind of hot rhetoric obscures the reality of a complex market and feeds a dangerous temptation to adopt policies that would restrict patients’ access to existing medicine and choke off the pipeline of new treatments still in development.”



 The Worth Of A Thing Is What It Will Bring. There’s an English proverb that reminds us, “The worth of a thing is what it will bring.” For patients with debilitating or life-threatening diseases, it’s hard to put a “worth” on breakthrough medicines that “bring” them better health. Value assessments are often insufficient. That’s the conclusion of two new papers examining cost-benefit analyses for prescription drugs. Read the full blog post here.

 Private Sector Drives Drug Research. Discovering and developing a cure is not simple, and individuals working in both the public and private sector are important to the process. So are the dollars that flow from the private sector. Whether it’s at the discovery, development or manufacturing stage of the innovation process, the private sector makes the largest research and development (R&D) contributions to translate basic research findings into therapeutic advances for patients. Read the full blog post here.

In case you missed them, here are some other recent posts on the APMI blog:

- Drug-Pricing Proposals Should Worry Patients Looking For A Cure

- Who Shares Drug Profits?

- ITIF Paper: Price Controls Reduce Innovation



Drug Prices Are Falling. The Wall Street Journal explains pharmaceutical company discounts and rebates and concludes “discounts mean the actual price of many drugs is falling.” STAT News report drug prices are expected to rise slowly over the next five years. Drug Channels Institute CEO Dr. Adam Fein also addresses this issue.  

Price Controls Will Exacerbate Drug Shortages. In an op-ed in The Hill, Dr. Gerard Gianoli, a neuro-otologist, member of The American Association of Physicians and Surgeons, and associate professor at Tulane University argues price controls “would exacerbate the widespread drug shortages — including on basic drugs like intravenous saline (salt water) —that already persist due to existing drug price controls as well as threaten new innovation.” Dee Stewart, president of the Center for Innovation and Free Enterprise, also discussed price controls this week over at Morning Consult.

Illustrating What’s At Risk: Innovation. The New York Times looks at how experimental therapies and advances in gene therapy might eventually cure sickle-cell.

Massachusetts Governor’s Drug-Pricing Experiment Won’t Work. Massachusetts Gov. Charlie Baker (R) has proposed to use the state’s Medicaid program to control drug prices. In a Boston Globe column, MassBio President and CEO Robert Coughlin says the plan “won’t meaningfully reduce the Commonwealth’s health-care budget.”  

Canada Should Reconsider “Cost-Effective Analysis.” A Fraser Institute study has found that introducing “cost-effective analysis” into the pricing of new drugs may underestimate the true benefit of new drug therapies, particularly biologics and other personalized drug treatments, by narrowing the scope of potential benefits.

PBMs Marking Up Generic Prices In New York. FierceHealthcare features as study by the Pharmacists Society of the State of New York, which found PBMs contracted by New York's Medicaid managed care organizations have inflated prices for generic medications. The PBMs paid pharmacies an average of $10.85 per generic prescription but charged the payer an average of $14.34 per prescription, a 32 percent markup.  

Unintended Consequences. Bloomberg examines whether the focus on drug prices risks safety. In a column in the Des Moines Register, experts from the Heartland Institute and the Hastings Center ask the same question.



 At Health Affairs, Tanisha Carino, executive director of FasterCures, advises:

“As policymakers look to take swift action to control drug spending, they should proceed with caution. Drug prices are only part of the picture. As Wamble and colleagues note, a discussion of price is incomplete without consideration of the benefits that accrue to individuals, their families and society.”


At STAT News, Dr. W. David Hardy, chair of the HIV Medicine Association and adjunct professor at Johns Hopkins University School of Medicine, explains why he opposes CMS’ proposal to adopt the International Pricing Index:

“Successfully treating HIV, and the even greater goal of ending the HIV pandemic, are based on a fundamental science-backed premise: that all people living with HIV should have early and uninterrupted access to effective antiretroviral medications that suppress the virus and keep it at undetectable levels for the rest of their lives. That premise for optimal HIV care, along with the great progress that has been made against HIV, is now threatened by proposed changes to Medicare aimed at lowering drug prices.”