Richard Burr: There is a path to reducing anti-patient drug price abuses | Opinion

One of the most controversial issues consistently debated during my almost 30 years in Congress, and still hotly debated today, is the price of prescription drugs in the U.S. Policymakers have worked to target some of the root causes of high drug prices, yet more can be done to reduce the costs patients and employers pay for prescription drugs.

At the center of the debate sit the pharmacy benefit managers (PBMs), which were originally intended to manage prescription drug benefits for employee health plans. Their original goal was to negotiate cost-effective terms and lower drug prices for plan sponsors. Over time, the PBM industry experienced significant consolidation and vertical integration, fostering business tactics that encourage higher, not lower, prices for patients.

Today, PBMs influence virtually every aspect of prescription drug costs and access for Americans.

PBMs make money from hefty rebates they demand from manufacturers in exchange for preferential placement on drug formularies. Meanwhile, patients do not experience the benefit of the lower, post-rebate drug price that PBMs negotiate. The out-of-pocket cost patients are paying at the pharmacy counter does not reflect the discount provided to the PBM.

Another abusive tactic used by PBMs is their use of restrictive formularies to steer patients toward higher-priced drugs, on which the PBMs are collecting greater profits and blocking access to lower cost generics.

Congress has the opportunity to act to address these anti-patient practices and pass policy solutions that can make medicines more affordable. Bipartisan policy solutions have been approved by the health committees in the Senate and the U.S. House. These solutions would reform our broken drug pricing system and take steps to create a more transparent and accountable process. Congress should bring an end to the misguided financial incentives making big corporations richer at the expense of patients.

The bipartisan legislation pending before Congress would de-link PBM revenues from the price of drugs. In other words, a fair fee would be set for the services PBMs provide and the financial incentive to elevate a drug’s cost and force patients towards higher-priced medicines would be gone. To ensure a level playing field and improved access to medicines, it is critical that these reforms are realized for both commercial and federal coverage markets.

Modernizing PBM practices is a far more pragmatic and transformative solution than the unprecedented concept of big government seizing privately held intellectual property. The Biden administration’s recent attempt to lower drug prices by allowing the federal government to exercise “march-in” authority under the Bayh-Dole Act will result in severe unintended consequences. Bayh-Dole was designed to encourage private investment in research and provide a way for the government to intervene if the supply of the invented product is not reliably available.

The administration’s proposal is an abuse of the law as it would take back the patent rights for new inventions, including drugs, if the government deems the list price of the drug product is too high, a factor that is not included under current law. Allowing Uncle Sam to swoop in and arbitrarily take away a drug patent right will disrupt the protections provided to inventors and discourage public-private partnerships investing in new lifesaving medical innovations.

For Americans to benefit from the tremendous medical innovation that brings treatments and cures, they need to be able to afford them. Patients deserve a transparent and fair process that helps make the drugs they need more affordable, not less. The most effective and quickest way to end anti-patient practices by PBMs and reduce the amount Americans pay out-of-pocket for their medicines is for Congress to pass these bipartisan reforms and for President Biden to sign them into law.

I encourage my former colleagues in Congress to seize the opportunity to put in place modern solutions to reduce prescription drug costs for patients and fix a broken system.

Richard Burr is a former U.S. Senator from North Carolina. He is currently Principal Policy Advisor at DLA Piper LLP, a global law firm, where he provides policy advice to a wide range of life sciences and healthcare clients.