Government role needed
In addition to the recommendations for physicians and their institutions, Dr. Rajkumar listed several potential policy-level solutions:
1. At the state and federal level, regulations should protect against excessive drug launch prices through the same type of value-based pricing approaches used in other developed countries. “Capping the maximum price increases to the rate of inflation is needed and can happen only through state and/or federal legislation,” he wrote.
Although some may see this as antithetical to “free market” economics, Dr. Rajkumar points out that, in the case of many prescription drugs, including insulin, “we not only have an unregulated monopoly, but it’s a prolonged unregulated monopoly for a lifesaving product, not a luxury item.”
“When you grant monopoly protection and put a barrier on competition, that’s not a free market. People have always had regulations on monopolies. Unregulated monopoly is a recipe for high prices. You have to have some regulation that protects citizens from exploitation.”
And here, he believes, the United States could adopt price negotiations as practiced in Europe and other parts of the world, but which are currently forbidden in the United States.
“Other countries negotiate the price in exchange for monopoly protection. You don’t have to reinvent the wheel,” he said.
2. Reform of the regulatory and legal processes to ease the path for approval of generics and biosimilars to enter the market. This could include reciprocal approval so that biosimilars approved in Canada or the European Union could automatically be granted FDA approval in the United States.
3. Reform of the patent system to prevent overpatenting and patent abuse, by capping patent life to 7-10 years and forbidding use of additional patents as a way of prolonging market exclusivity.
To this point, Barnhizer pointed out that “none of the Lilly insulins are patent protected. Our most commonly used insulin, Humalog U-100, lost patent protection in 2014.”
4. A nongovernmental agency should oversee pricing and make recommendations to Medicare and insurers on the maximum price of new and existing drugs, including insulin. One body poised to do that work is the Institute for Clinical and Economic Review, which receives 77% of its funding from nonprofit foundations. “I have worked with them and they are the best there is,” Dr. Rajkumar said.
5. Any rebates paid by manufacturers to PBMs should be transparent to all stakeholders, including patients.
6. Nonprofit generic manufacturing should be established. The Mayo Clinic has recently partnered with Intermountain Healthcare and several other organizations in creating Civica Rx, a nonprofit generic company.
7. Measures and laws that provide access to insulin in emergency situations are needed, particularly for people with type 1 diabetes.
Recent proposed and enacted legislation has been aimed at some of these goals.
The Insulin Price Reduction Act, introduced in October 2019 and just endorsed by the American Diabetes Association, would reduce insulin costs by providing incentives for manufacturers to revert to the 2006 list price of all insulins.
The Affordable Insulin Approvals Now Act, introduced in July 2019, aims to speed up approvals of generic and biosimilar insulins.
And in May 2019, the state of Colorado passed a bill to cap patient copays for insulin at $100 a month, and similar legislation has been introduced in several other states.
Dr. Rajkumar says that an overall fix will require changes at the federal level.
But, he said, they do not need to happen all at once.
“There are a number of changes that need to happen, but we can do one legislation at a time. ... I’m optimistic that something will happen. This is a national conversation. Both sides of the aisle want to do something about it. People are indeed feeling the pinch, so maybe something will get done,” he said.
Dr. Rajkumar has reported no relevant financial relationships.
This article first appeared on Medscape.com.