Driving Down Drug Costs
By: Colorado BioScience Association Date: 04/16/2018
Three Solutions to Help Patients and Support Innovators
Current proposals under consideration at the Colorado State Legislature propose a simple fix for a complex issue. We agree, patients and their families need access to affordable medicines and health care. However, we believe patients need innovators and policymakers at the federal and state level to and address our health care system as a whole.
We want to provide patients with lower-cost solutions and promote innovation. Fortunately, with a holistic approach to the drug price conversation, there are better solutions. Here are our three recommendations:
1. Encourage competition from biosimilar and generic drugs. New competition from generic and biosimilar drugs over the next five years will reduce prescription drug spending by $143.5 billion. Food and Drug (FDA) Commissioner Scott Gottlieb, M.D., is making it a priority to deliver more generic medications. In June of 2017, the FDA announced new steps toward that goal, including speeding up the review of generic drug applications for medicines without significant competition.
Increased availability of generic medications will provide new opportunities for cost savings. The FDA approved a record 1,027 generic drugs in 2017, more than its previous record of 813 in 2016.
2. Share negotiated rebates with patients. In 2015, the discounts and rebates provided by biopharmaceutical manufacturers totaled over $100 billion. Often, rebates on prescription drugs go back to insurance companies or pharmacy benefit managers. Providing more access to discounted medicines at the pharmacy could save certain patients with high deductibles between $145 and $800 each year and would only increase insurance premiums by 1%, according to recent research by Milliman for PhRMA.
3. Examine the role of PBMs and insurance companies in drug pricing. Employers, insurance companies and pharmacy benefit managers (PBMs) all play an important role in the final cost of prescriptions. What patients pay can vary significantly, depending on what kind of insurance they carry or if they pay cash. Insurance companies and PBMs maintain the most control over prices, increasingly shifting the cost of medicines to you, the patient.
There’s a reason why close to 730 bioscience companies call Colorado home. Our state works to create an innovation-friendly environment. Colorado BioScience Association represents tens of thousands of researchers and entrepreneurs who work every day to improve the quality of life for patients.
Let’s work together to create federal and state policies that support patients and encourage innovation.
Proposed transparency legislation would only increase regulation and government intervention, which will make the marketplace less competitive and less responsive to patients.