BioPharma, Policy

Policy makers should ‘set their sights higher’ on U.S. drug pricing regulations, researchers say

A review published in JAMA found that bills introduced into the House and Senate don’t go nearly as far as existing drug pricing regulations other countries. The researchers listed eight key lessons from six nations.

Money pile and medicine pills representing medical expenses

Despite massive resistance to pricing controls in the U.S. from drugmakers, bills introduced into the House and Senate are nowhere near as comprehensive in what they propose compared with existing policies among several peer nations of the U.S., according to a new paper.

For starters, the bills mainly cover only Medicare patients, not patients as a whole, and they don’t incorporate key lessons learned by other countries.

The study, published in the Journal of the American Medical Association by University of Pennsylvania researcher Dr. Ezekiel Emanuel and colleagues there and at the medical universities of Harvard and Yale universities, compared the bills – two introduced in the House and one introduced in the Senate – with existing regulations in Australia, France, Germany, Norway, Switzerland and the U.K. In particular, it focused on what the researchers called eight key lessons from those countries’ regulations.

Citing data from analytics firm IQVIA, the researchers noted that retail and non-retail drug spending in the U.S. is twice as high as Switzerland, the country with the next highest per capita spending, while prices in the U.S. are nearly twice those of Australia, Canada and the U.K. Overall, the U.S. accounts for more than 40% of drug spending despite having only 4.25% of the world’s population.

“This review suggests that US policy makers should set their sights higher,” the researchers wrote. “Proposals should focus on prices for the entire US population, not only Medicare patients.”

The eight lessons gleaned from the experiences of the other countries included that drug regulations are national and apply to all patients, without separate payment schemes for different patient groups; reimbursement is linked to comparative therapeutic value; reimbursement is informed by objective standards like cost-effectiveness analyses; prices are established through negotiation with manufacturers or direct determination of maximum reimbursement rates; mechanisms are used to lower prices from time to time; annual spending growth is sometimes capped; price limits can be implemented by non-government bodies like insurer trade groups; and some countries require political decisions to cover drugs that exceed affordability thresholds.

With some surveys showing 70% of Americans want to see drug prices controlled, it’s likely that the issue will grow in prominence regardless of who wins the election. However, the researchers noted that the three proposals in Congress incorporate few of the lessons from other countries. For example, they apply mainly to Medicare beneficiaries rather than all patients, though one of the House bills allows commercial insurance plans to adopt Medicare’s negotiated prices. Meanwhile, they wrote, the House bills include therapeutic value and objective standards, but the Senate bill does not. And none of them limit national drug spending growth.

The researchers further noted the aversion in the U.S. to using cost per quality-adjusted life year – or cost per QALY – due in part to pressure from drugmakers as well as certain patient advocacy groups, as as to health technology assessments. Moreover, the U.S. is “unique” among high-income countries in granting market exclusivity and then accepting monopolistic manufacturer pricing. All of these features of U.S. policy, they wrote, must be confronted.

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