The Alliance

The Weekly Dose | 08.02.19

August 2, 2019 2:00 pm

A “quick political hit.” That’s what STAT News’ Ed Silverman called President Donald Trump’s plan to allow Americans to import drugs from Canada. Those three words, unfortunately, apply to many of the plans and outlines we have seen released over the last several months. Few get to the real factors (e.g. hospitals and insurance companies) that are driving health-care cost increases, and most would threaten Americans’ health by reducing innovation.


Want more context than a quick political hit will give you? If you need more info for a story, or have questions, please email us. We look forward to working with you.



Patrick O’Connor – Executive Director

Rosemarie Calabro Tully – Communications Director



.@ChuckGrassley and @RonWyden’s bill would “siphon more than $150 billion from researching and developing new medicines while giving those savings to the government, insurers and #PBMs – not seniors,” says Stephen Ubl. #innovation #drugprices #drugpricing Click here to RT.

.@HHSGov’s @SecAzar once called #drugimportation a "gimmick." It’s also a proposal that will stifle #innovation, limit #patient access to care, and welcome unsafe and unapproved #drugs into our borders. #drugpricing Click here to RT.

‘In reality, #drug companies have relatively little say over how much #patients pay at the pharmacy counter’ - @sallypipes By one estimate, if 100% of #diabetes rebates went to patients—not insurers/#PBMs—out-of-pocket spending would fall by $3.7B/year. Click here to RT.



Check out and share on Twitter our latest blog posts:


- Slogans, Not Solutions Over Two Nights in Detroit. The two-night Democratic debate this week was dominated by discussions of health insurance. And it’s about time policymakers turned their attention to the real drivers of out-of-pocket, health-care costs. Click here to read the full blog post. Share on Twitter here.

- Most Favored Nation: Fewer Jobs, Less Innovation. The president’s “most favored nation” status is not dissimilar to the looming price caps for medications. Arbitrarily limiting drug prices will “erode profit margins,” stifle innovation, and drive away physicians who cannot accept such low payments. Click here to read the full blog post. Share on Twitter here.

- Drug Importation: “Not Your Silver Bullet.” Practicality, safety, shortages. There are many reasons drug importation is not a “silver bullet” for U.S. consumers. Click here to read the full blog post. Share on Twitter here.



- Drug Importation Is No Solution. Axios’ Caitlin Owens writes, “While importation could help some patients afford their drugs, the policy overall is an attempt to take advantage of other countries' lower drug prices while avoiding taking direct action to limit prices in the U.S.” She also says, “There are a lot of reasons to be skeptical about its impact — especially because Canada doesn't have large quantities of drugs compared to the U.S. supply and it's not thrilled about the idea of sending them to us.”

- And Don’t Expect The Canadian Supply To Last Long, Or To Guarantee Safety. STAT News notes, “The Canadian drug market is much smaller than the U.S. market, and if Americans start buying Canadian drugs, it’ll cause serious supply issues for both countries. A 2018 study found that if 20 percent of U.S. prescriptions were filled in Canada, our neighbor to the north would see its drug supply depleted in roughly 200 days.” STAT News also reminds readers, “[N]early every FDA commissioner in recent history, has insisted that drug importation simply can’t be done safely.”

- Patent Bill Will Reduce U.S. Drug Innovation. Anyone who has watched CNBC’s Shark Tank knows “patents are critical for innovation,” says Merrill Matthews, resident scholar at the Institute for Policy Innovation, in Louisiana’s Daily Comet. That’s why federal lawmakers should reject a new bill that would erode drugmakers’ intellectual property rights, Mattews argues.

- Why Aren’t Candidate Examining Hospital Spending? Good Question. As Axios notes, “Hospitals are the largest contributor to rising health-care costs in the U.S., yet have gone unmentioned in the Democratic presidential debates so far — a reflection of their relative political popularity over drug companies and insurers.” Read more at The American Prospect and The Atlantic.

- How Do You Put A Price On Human Life? STAT News examines how the Arnold-funded Institute for Clinical and Economic Review (ICER) does it, and why some patients groups oppose their methods.

- PBM Helps Boost Cigna Profits. Reuters reports, “Health insurer Cigna Corp (CI.N) raised its forecast for full-year adjusted earnings on Thursday after posting a better-than-expected profit in the second quarter, helped by higher revenue from its pharmacy benefits unit and its commercial health plans.”



Why aren’t Americans feeling the savings from generic drugs? As POLITICO reported, it is “largely because consumers are bearing a greater share of generic costs due to changing insurance benefit designs.” Here is how a new National Bureau of Economic Research paper describes the situation:


“We find the chained direct-out-of-pocket CPI for generic prescription drugs declines by about 50 percent between 2007 and 2016, while the total CPI falls by nearly 80 percent over the same time period. The smaller decline in the direct out-of-pocket CPI than in the total CPI is due in part to consumers’ increasingly moving away from fixed copayment benefit plans to pure coinsurance or a mixed package of coinsurance and copayments. While consumers are experiencing more cost sharing that in fact shifts more of the drug cost burden on to them, on balance in the US consumers have experienced substantial price declines for generic drugs.”