A bipartisan group of senators is pressing White House budget chief Mick Mulvaney to get HHS to green light drug imports in select situations as a solution to high prices, coming after Mulvaney signaled last Thursday (May 11) that the administration may try to stem prices through a variety of proposals, including increasing rebates in Medicare Part D, getting combination products to market more quickly and changing how the FDA review process is paid for. The lawmakers also ask the budget director what additional authority the government would need to address potential safety issues associated with drug importation, and call on the White House to support bills aimed at reining in abuses of Risk Evaluation and Mitigation Strategies and pay-for-delay agreements.
In a letter released Monday (May 15), Sens. Chuck Grassley (R-IA), Amy Klobuchar (D-MN) and John McCain (R-AZ) urge Mulvaney to work with HHS Secretary Tom Price to immediately consider certifying importation of drugs from Canada when: a drug is off patent or no longer marketed in the United States by the innovator company; there is a significant and unexplained increase in price; a drug is sole source and “introduction of a competitor drug will benefit the prices paid by taxpayers and consumers;” or “[t]he drug is produced in another country by the name brand manufacturer that initially developed the drug or by a well-known generic manufacturer that commonly sells pharmaceutical products in the United States.” Grassley, Klobuchar and McCain made an identical request to Price in a February letter.
Importation, to date, hasn't garnered any support from FDA heads. A bipartisan group of four former FDA commissioners on March 16 urged Congress not to move forward with drug importation, and argued the policy would do little to bring down costs.
Critics of importation have also argued it would introduce threats of counterfeit drugs into the U.S. drug supply. “[T]he growth of globalization has encouraged some policymakers to suggest that importation of prescription drugs would be a worthwhile opportunity for millions of Americans. Nothing could be further from the truth... Passing legislation to allow for a flood of imported, unapproved drugs, would tilt the balance more toward criminal elements, to the grave disadvantage of consumers,” George Karavetsos, former head of FDA's Office of Criminal Investigations, wrote in a recent Miami Herald op-ed.
Grassley, Klobuchar and McCain appear to acknowledge these concerns and ask Mulvaney to specify what additional authority the government would need to address these potential safety risks. “We also ask that you please provide your recommendations as to what additional authority you would require to protect American consumers,” the senators write.
The lawmakers also encourage the administration to support two bills: the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which would allow generic companies to sue brand companies for injunctive relief when a company is allegedly abusing a REMS to block competition; and the Preserve Access to Affordable Generics Act, which would crack down on so-called “pay-for-delay” agreements.
“Of course, we would welcome your support of our legislation to bring down the costs of prescription drugs as well,” the lawmakers write.
The lawmakers' pleas come in response to recent listening sessions held by HHS Secretary Tom Price on drug pricing and remarks from Mulvaney during a May 11 panel held as part of the Leaders in Global Healthcare & Technology (LIGHT) forum at Stanford University.
“We are looking at things that we can do internally, executorially without Congress, what we might have to go to Congress to fix, what we can add to the [American Health Care Act] bill, because the president does keep coming back...the president keeps telling me again and again and again what are we doing to fix this, what are we doing to fix this,” Mulvaney said May 11.
Mulvaney pegged government intervention as a source of America's drug pricing woes. “I think one of the things we are seeing is sort of the end result of the government intervention in the market over the last 60 years. One of the reasons that the pharmaceutical market doesn’t function like the market for my iPhone is that the government has been a major major player in setting some of the prices over the course of several generations. You have to deal with the role of a monopsony, a single buyer, when you start talking about this,” Mulvaney said.
The OMB director highlighted increasing rebates drug companies provide to Part D patients as one policy the administration is mulling. “When Medicare Part D was put in there was a tremendous giveaway to the pharmaceutical companies in terms of the fact they no longer had to rebate, like they did in Medicaid, so we've actually floated that idea with the president trying to be a little bit heavier handed on the rebates that they have to pay in order to try and drive the prices down,” Mulvaney said.
Mulvaney also held up the case of EpiPen, and argued that the Mylan's ability to raise the price of its product by more than 400 percent was largely because regulations kept competitors out of the market. “There's eight manufacturers in Europe, there's one here. It's regulated as both a medical device and a pharmaceutical and its nearly impossible for anyone to compete in that marketplace under our current rules. Under that set of givens it's probably not surprising the thing costs $600 a piece,” Mulvaney said.
Mulvaney argued that making it easier to get devices approved may be a solution to price gouging cases like EpiPen. “Maybe we make it easier to get medical devices done, maybe we come up with fast track. It should be easier to get it approved here,” the OMB director added.
The administration is also eying crafting “a way to pay differently for the review process, to try to get more skin in the game,” according to Mulvaney. While Mulvaney did not offer further details on this proposal, the Trump administration's fiscal 2018 skinny budget, unveiled in March, called on industry to pay double in user fees in exchange for reforms meant to bring products to market faster. However, given lawmakers ignored the request and are moving forward with reauthorizing user fees as negotiated, Trump would likely need to wait until the next reauthorization to overhaul the user fee program.