As prescription drug costs rise, reform is needed

Published 11:00 am Tuesday, October 1, 2019

By Warren Lesser

Guest Columnist

Much has been written and spoken about concerning the rising drug prices in America. As the president of a small pharmaceutical company, I understand this issue and have a firsthand view within the industry of rising costs, of the valid and invalid reasons for drug price increases, and of the harmful ramifications for patients.

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Given recent examples and headlines about excessive drug price hikes and the apparent greed of some pharmaceutical executives, the timing may be ideal for Congress to take actions to limit instances of unwarranted price increases that result in astronomical profits for drug makers.

For example, lawmakers on Capitol Hill are working to expose and curtail inflated drug prices and potentially unethical rebate schemes among pharmacy benefit managers, insurance payers, and drug manufacturers.

Also, a large, bipartisan coalition in Congress is seeking to enact the Creating and Restoring Equal Access to Equivalent Samples Act (CREATES Act). This legislation would help control drug costs by eliminating anti-competitive loopholes that makers of expensive brand-name drugs employ to block the production of biosimilar or generic drug alternatives.

If enacted, generic and biosimilar drug manufacturers could acquire samples of brand-name drugs earlier for testing and FDA approval purposes. The Congressional Budget office estimates that the CREATES Act would save taxpayers $3.9 billion in federal spending, and the savings to consumers would be far greater.

Other promising initiatives to reduce drug prices include proposals, supported by President Trump, to create a method of limiting or negotiating the prices of prescription drugs paid by Medicare to pharmaceutical companies. Additionally, there have long been efforts in Congress to allow the safe, regulated importation of less expensive drugs from other countries.

This issue has a renewed focus as President Trump has expressed his support, and his Administration has pledged to assist states, such as Florida and Vermont, who recently passed bills allowing some drug importation from Canada.

Each of these initiatives is promising, but also complex. As Congress considers reform, it is important to protect the financial incentives for those who pioneer in drug research and development to create life-saving drugs.

At the same time, some executives at large pharmaceutical companies have shown a reckless disregard for the need to provide drugs at affordable prices, and they have nefariously abused the law to block open competition in their industry. Americans would therefore benefit from these reforms to curtail skyrocketing drug prices for consumers and taxpayers.

Dr. Warren P. Lesser is the president/CEO of MAGNA Pharmaceuticals, Inc., in Louisville.