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Senator says 'people believe they are getting mugged at the pharmacy counter,' particularly for insulin.

COURTESY PHOTO - U.S. Sen. Ron Wyden, the Oregon Democrat who leads the Senate Finance Committee, is giving drug pricing limits another shot in the next few weeks.U.S. Sen. Ron Wyden says the Senate Finance Committee will try to keep medication prices in check, particularly the soaring cost of insulin, as it begins work on new legislation.

The Oregon Democrat, who leads the panel that oversees three major federal health benefit programs, said the task is difficult because of the omnipresence of drugmakers and others who want no changes.

"It's often estimated there are more lobbyists for pharmaceutical interests than for any other back in Washington," Wyden said in an interview Monday, June 28, with Pamplin Media Group. "I know there will be a battle. But the American people believe they are getting mugged at the pharmacy counter."

Case in point: Insulin, the focus of a report that Wyden and his Republican predecessor as chairman, Chuck Grassley of Iowa, released Jan. 14. The Wyden-Grassley report noted the links between its three primary manufacturers and three pharmacy benefit managers that are the go-betweens with health plans.

"The Finance Committee found that drug manufacturers increased insulin's whole acquisition cost in part to give them room to offer larger rebates to pharmacy benefit managers and health insurers, all in the hopes that their product would receive preferred formulary placement. This pricing strategy translated into higher sales volumes and revenue for manufacturers."

Insulin, developed a century ago, helps people with diabetes control their blood sugar. But its price has tripled or more in the past decade.

According to the Centers for Medicare and Medicaid, enrollees in Medicare Part D (prescription coverage) rose from 2.1 million in 2010 to 3.2 million in 2017. But the amounts paid for insulin, before discounts from manufacturers, jumped from $3 billion in 2010 to $14.3 billion in 2018.

"The drug is not that much better," Wyden said. "There is price gouging because they can get away with it."

A bill by Grassley and Wyden gave insulin makers a choice between reducing its cost, paying a penalty if they maintain current prices, or paying even more in penalties if they increase prices.

Although the Finance Committee approved the bill on a split vote, it never reached a vote of the full Senate in 2020 because the majority Republicans were divided.

Donald Trump supported some form of legislation while president, but Wyden said he failed to follow through, and Trump backed off after drugmakers criticized it.

President Joe Biden has endorsed legislation, specifically authority for the federal government to negotiate prices for Medicare, the federal program for people age 65 and older, and some people with disabilities; Medicaid, the joint federal-state program for low-income people, and the Children's Health Insurance Program. The Democrat-controlled House passed such a bill in 2019, but it died with the Republican majority in the Senate. The Senate is now split 50-50; Democrats are the majority party with the tie-breaker in Vice President Kamala Harris.

"I look forward to working with members of the Senate and the House to deliver true drug pricing reform to President Biden's desk this year, as he called for in his joint address to Congress," Wyden said. 

Five guiding principles

Wyden said as the committee starts anew, he has stated five guiding principles for the legislation he seeks:

• Medicare must have the authority to negotiate with pharmaceutical companies, especially when competition and market practices are not keeping prices in check. Medicare lost that authority when Congress, back in 2003 when Republicans had majorities in both houses, removed it when prescription coverage was created under Part D.

• American consumers must pay less at the pharmacy counter.

• Prices of drugs that increase faster than inflation will not be subsidized by patients and taxpayers.

• Drug pricing reforms that keep prices and patient costs in check should extend beyond Medicare to all Americans, including those covered by employer and commercial health plans.

• Drug pricing reforms should reward scientific innovation, not "patent games."

Wyden said he is all for innovation in medicine, such as gene therapy. But he said drugmakers go too far when they argue that any form of price control will stifle innovation. Wyden said all too often, pharmaceutical companies patent medications that do not differ greatly from existing ones.

"On my watch, I am not going to let Big Pharma peddle the theory that me-too drugs are innovation," he said. "We have to remember what it means to the person who is suffering if they cannot afford it."

Wyden defines me-too drugs as those "that are not that much different from those already out there, except for their higher price tags."

Wyden spoke as the Oregon Legislature approved a stripped-down version of Senate Bill 844. Under the original version, a new state board was empowered to select nine drugs — including one for insulin — for potential limits on maximum payments.

The approved version allows the board to do so only if a drug's price has led or will lead to affordability issues or to health inequities for communities of color. Otherwise the board is limited to an annual study of the U.S. market for generic drugs, plus recommendations to state lawmakers about product reviews, price trends and how medications can be made more affordable.

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