Biden’s Push to Drive Down Drug Prices

Biden’s Push to Drive Down Drug Prices

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Plus, FDA asks for review of Alzheimer's drug approval
Friday, July 9, 2021

Biden Signs Sweeping Executive Order to Promote Competition, Lower Prices

President Joe Biden on Friday signed a sweeping executive order that aims to foster competition and limit or reverse corporate consolidation, steps that the president says will lower prices, increase wages and build a healthier economy for consumers, workers, farmers, and small businesses.

"What we’ve seen over the past few decades is less competition and more concentration that holds our economy back. We see it in big agriculture and big tech and big pharma and the list goes on," Biden said before signing the executive order at the White House. He added: "Let me be very clear: Capitalism without competition isn't capitalism. It's exploitation."

Biden’s executive order encompasses 72 initiatives across more than a dozen federal agencies, according to the White House, with potentially major implications for key sectors of the economy, ranging from technology to financial services to agriculture.

We’ll focus here on health care, an area where the White House says a lack of competition increases prices and reduces access to quality care. "Just a handful of companies control the market for many vital medicines, giving them leverage over everyone else to charge whatever they want," Biden said. "As a result, Americans pay two and a half times more for prescription drugs than in any other leading country and nearly one in four Americans struggles to afford their medication.

Biden’s order:

* Directs the Food and Drug Administration to work with states on importing drugs from Canada;
* Directs the Department of Health and Human Services to issue a plan to combat high drug prices and price gouging within 45 days;
* Directs HHS to boost support for generic and biosimilar drugs;
* Pushes the Federal Trade Commission to ban so-called "pay for delay" agreements, in which the makers of brand-name drugs pay generic manufacturers to stay out of the market;
* And calls for new rules within 120 days allowing hearing aids to be sold over the counter.

The executive order also takes aim at hospital and insurance industry consolidation, trends that the White House says have left patients, especially those is rural areas, with fewer choices and higher prices. "Thanks to unchecked mergers, the ten largest healthcare systems now control a quarter of the market," the White House said in a document detailing the executive orders. "Research shows that hospitals in consolidated markets charge far higher prices than hospitals in markets with several competitors."

Biden’s order encourages the Justice Department and FTC to revise their guidelines to ensure patients are not harmed by hospital mergers and directs HHS to address hospital billing and "support existing hospital price transparency rules." It also directs HHS to standardize plan options on the Obamacare exchanges to make it easier for people to comparison shop.

Business groups say Biden is off base:
Business groups criticized Biden’s order — and the premise behind it. "Today’s executive order is built on the flawed belief that our economy is over-concentrated, stagnant and fails to generate private investment needed to spur innovation," said Neil Bradley, executive vice president of the U.S. Chamber of Commerce. "Such broadsided claims are out of touch with reality, as our economy has proven to be resilient and remains the envy of the world." Hospital and drug industry trade groups also pushed back, warning that Biden’s order could slow critical care and claiming that the U.S. already has "the world’s most competitive market for prescription medicines."

The reality ahead:
These presidential orders have a long way to go before they become federal rules and regulations. The process could take months, and there are likely to be additional hurdles ahead. "The eventual rules and regulations that follow from the White House’s direction are likely to set up heated battles with top U.S. companies that could take years to resolve," The Wall Street Journal notes.

The Trump administration, for example, issued rules for states to apply to import drugs, but no imports have begun. "Several states, including Florida, have expressed interest in importing drugs as a way to lower costs," CNN notes. "But Canada has opposed the idea, and experts question whether the country has enough of a supply to make a significant dent in US drug prices. Manufacturers have also filed a lawsuit to stop the effort."

The bottom line:
Biden’s order is the most ambitious effort in decades to counter monopolies and the concentration of market power, a key theme that has emerged among Democrats in recent years. "The move marks a sea change from four decades of a hands-off-big-business approach ushered in by Ronald Reagan," Axios’s Margaret Harding McGill notes.

Biden himself made that shift explicit. "We are now 40 years into the experiment of letting giant corporations accumulate more and more power," he said. "And what have we gotten from it? Less growth, weakened investment, fewer small businesses. … I believe the experiment failed."

FDA Chief Calls for Watchdog Review of Alzheimer's Drug Approval

The acting commissioner of the Food and Drug Administration on Friday asked an independent watchdog to review the process that led to the controversial approval of drugmaker Biogen’s new Alzheimer’s treatment, Aduhelm.

In a letter to the Office of Inspector General at the Department of Health and Human Services, the FDA’s Dr. Janet Woodcock asked for "an independent review and assessment of interactions between representatives of Biogen and the FDA" during the approval process.

The request follows a report from STAT News late last month that detailed an unusual back-channel collaboration between Biogen and the FDA during the approval process, including an "off-the-books" meeting with the agency’s top regulator of Alzheimer’s drugs. "FDA played an extraordinarily proactive role, even drafting a road map on how the company could win approval," the STAT report said. "Several experts said that relationship was not typical and raised serious concerns."

In her letter Friday, Woodcock wrote that she has "tremendous confidence" in the integrity of the FDA officials involved in the approval process "and their commitment to unbiased and science-based decision-making." But she added that, given the concerns raised about the contacts between the FDA and Biogen during the review process, an independent review was necessary. "We believe an independent assessment is the best manner in which to determine whether any interactions that occurred between the manufacturer and the agency’s review staff were inconsistent with FDA’s policies and procedures," Woodcock said on Twitter.

Progressives Demand Climate Measures Be Included in Infrastructure Bill

A group of 11 House progressives is pressing Democratic leaders to ramp up investments to address climate change as part of a budget reconciliation package.

In a letter to House Speaker Nancy Pelosi and the rest of House leadership Thursday, Rep. Cori Bush (D-MO) and 10 colleagues criticized President Joe Biden’s American Jobs Plan and the infrastructure deal negotiated by the White House and a bipartisan group of senators.

"As the urgency to invest in public climate infrastructure and jobs intensifies each day, we urge you to work with us to deliver robust and lasting investments at a scale that directly addresses the climate crisis," the letter says. "We are very concerned that the American Jobs Plan (AJP), and more so the bipartisan compromise as it presently stands, will not reduce the greenhouse gas emissions that are driving the climate crisis to the extent that science and justice require."

The letter, written in collaboration with climate groups and first obtained by CBS News, also complains that, since Biden’s budget request was released at the end of May, "the conversation has become a discouraging, tepid dance between the already compromised AJP and plans from Republicans and bipartisan coalitions that leave climate out entirely."

Among the other House Democrats signing the letter were Reps. Pramila Jayapal of Washington, who chairs the Congressional Progressive Caucus, as well as Alexandria Ocasio-Cortez of New York, Ayanna Pressley of Massachusetts, Rashida Tlaib of Michigan and Ilhan Omar of Minnesota.

The group calls for a Green New Deal, with $1 trillion in annual spending for the next decade, including $1 trillion to "build public renewables with union labor," $600 billion to expand public transit and electrify transportation, $600 billion to upgrade public housing and schools, and "$250 billion in climate and environmental justice funding for local governments."

Why it matters: The letter from progressives does not threaten to oppose a budget reconciliation that falls short of their demands, but it reinforces how difficult a task Democrats — with a narrow majority in the House and an evenly divided Senate — face in trying to craft a package that can get through both chambers.

Quote of the Day

"If you add the two plans together, it would be the biggest bill in the history of the country. There's no way it’s going to be easy."

– House Budget Committee Chair John Yarmuth (D-KY) in a Politico article on the challenges and choices facing Democrats as they look to enact twin infrastructure bills that, combined, could be the largest spending bill in history.

Chart of the Day: The Growing Red-Blue Vaccination Divide

The stark partisan divide on Covid-19 vaccinations has resulted in a growing gap in vaccination rates between counties that voted for Joe Biden in 2020 and those that supported Donald Trump.

A new analysis by the Kaiser Family Foundation finds that the difference between average vaccination rates in Biden counties and Trump counties has widened, rising from 2.2 percentage points in late April to 6.5 points by May 11 to nearly 12 points by July 6 (see the Axios chart below). The average vaccination rate in Trump counties as of earlier this week stood at 35%, compared to 46.7% in Biden counties.

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