What you need to know about the forces reshaping our industry.


September 19, 2016

New bipartisan bill would require drugmakers to justify price increases

Daily Briefing

A bipartisan group of Senate and House lawmakers last week introduced a bill that would require drugmakers to justify price increases of more than 10 percent.

According to USA Today, the bill was proposed in response to the controversy over Mylan's EpiPen price hikes.

Facing backlash over EpiPen price spike, Mylan will provide more discounts

The Fair Accountability and Innovative Research (FAIR) Drug Pricing Act is co-sponsored by:

  • Sen. Tammy Baldwin (D-Wis.);
  • Sen. John McCain (R-Ariz.); and
  • Rep. Jan Schakowsky (D-Ill.).

At least 30 days prior to increasing the price of a particular drug by more than 10 percent, the bill would require drugmakers to disclose to HHS their spending on advertising, development, manufacturing, and research for the drug, as well as their net profits from the drug. The bill would not regulate drug prices and instead aims to increase transparency.

McCain said the bill "would bring much-needed transparency to prescription drug prices." He added, "Transparency leads to accountability, and it is past time that mantra applied to the skyrocketing cost of prescription medication."

Schakowsky said, "Prescription drug corporations should not be allowed to hide behind a curtain, refusing to disclose information on drug prices, and price gouging with impunity."

According to Baldwin, the bill is unlikely to pass this year because it was introduced so late in the session. However, she said the effort is "intended to create momentum" for next year when the lawmakers plan to reintroduce the measure.

Separately, John Rother, executive director for the Campaign for Sustainable Rx Pricing, called the effort a first step in repairing the "broken prescription drug market."

Mylan, advocates seek to add EpiPen to USPSTF's list of preventive medical services

In related news, Mylan said it is seeking to add the EpiPen to the United States Preventive Services Task Force's (USPSTF) "A" list of preventive medical services.

Under the Affordable Care Act, insurers must cover services with the exclusive status at no cost to patients.

According to the New York Times, the designation could limit out-of-pocket costs for insured patients but also allow Mylan to further raise prices because insured patients wouldn't bear any of the treatment's cost. In addition, costs could still be passed on to consumers through higher premiums or copays for other drugs if their insurer seeks to mitigate the costs of covering the EpiPen at no cost.

Getting the EpiPen on USPSTF's list could be difficult. According to the Times, the list does not include any other prescription drugs for diagnosed conditions. USPSTF has recommended at least one over-the-counter drug, aspirin, but it typically lists treatments for patients only if there are "no signs or symptoms of the specific disease or condition" (O'Donnell, USA Today, 9/15; Flom, Roll Call, 9/15; Lipton/Abrams, New York Times, 9/16; Abrams, New York Times, 9/16).

What providers can learn from the drug pricing debate

We already knew that patients are becoming more sensitive to health care costs. But public uproar over one drug's 5,000 percent "overnight" price hike proves that patients are more discerning—and vocal—than ever. With more of their money on the line, patients are actively deciding when and where to access care based on cost.

We saw it coming—and we laid out concrete tactics for dealing with price sensitivity in your market. The first chapter in our study, The Consumer-Oriented Ambulatory Network, focuses on how you can retain market share by making services more affordable. Download the study to learn more.


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