Ahead of WH Meeting: Don’t Be Fooled By Big Pharma’s Spin

WASHINGTON, DC — Big Pharma has spent millions of dollars on a full-court press to stop the Trump Administration from implementing an International Pricing Index for one reason: The plan will lower drug prices in America. Today, industry lobbyists will meet with administration officials to press their case that Americans should continue to pay twicewhat other countries pay for drugs.

“We have no doubt the drug corporations will dust off their favorite scare tactics — like ‘rationing medicine,’ ‘reducing access,’ and ‘socialism,’” said David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs Now. “But the claims are outrageous, offensive, and wrong.”

Here are the facts:

FACT CHECK: PhRMA’s False Claims About the Medicare Part B demonstration

MYTH #1: The Part B demonstration will restrict access to lifesaving drugs.
FACTS:

  • All protected classes of drugs in Medicare will be maintained.

    • HHS: “We propose no changes to the Medicare benefit, just more discounts from drug companies.”

    • Bloomberg: “The aim is to drive down the cost of those medications by 30 percent.”

  • There is no evidence the Part B demonstration would harm patient access to drugs unless drug corporations choose to withhold drugs from patients.

    • HHS: The proposal is to “lower drug prices—without any restrictions on patient access.”

  • The Part B demonstration does nothing to slow the FDA approval process or change U.S. incentives for new drug approval.

    • Multinational drug corporations will still want early access to the largest market and higher prices in the U.S.

    • It would not change “regulatory incentives such as accelerated approval and priority review mechanisms” which Forbes points out play a key role in early approval in the U.S.

  • Americans ration drugs today based on price.

    • NPR: “Insulin's high cost leads to lethal rationing.”

    • CDC: “Among adults with diagnosed diabetes who were prescribed medication in the past 12 months, 13.2% did not take their medication as prescribed, and 24.4% asked their doctor for a lower-cost medication."

    • Vox: “It means that our system, even if we don't like to admit it, has to pick and choose who gets access to lifesaving drugs.”


MYTH #2: The Part B demonstration will establish drug prices that are impossibly low — stifling innovation, damaging drug companies and hurting our health system.
FACTS:

  • Americans would still pay Pharma more for drugs than other developed countries.

    • The New York Times: “A government study that said Medicare was paying 80 percent more than other advanced industrial countries for some of the most costly physician-administered medicines.”

    • Secretary Azar: “Over the next five years under this model, we will go from paying 180 percent of what other countries pay for these drugs to 126 percent of what they pay.”

  • Lowering prices in Part B will have little to no impact on innovation.

    • National Academy of Sciences: “NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016. “

    • HHS: “The possible savings American patients would receive over five years represents less than 1 percent of pharmaceutical R&D spending during that time; and the pharmaceutical industry has offered no evidence of that amount having a meaningful impact on innovation.”

  • Drug companies can easily make that up by reducing advertising and marketing spending.

    • Washington Post: “Nine out of 10 big pharmaceutical companies spend more on marketing than on research.”

    • JAMA: “From 1997 through 2016...DTC prescription drug advertising increased from $1.3 billion to $6 billion with a shift toward advertising high-cost biologics and cancer immunotherapies.”


MYTH #3: The demonstration will result in worse care for patients. The government should not replace a market-based system with government price setting.
FACTS:

  • We do not have a market-based system in the United States. Our system is completely based on laws and regulations.

    • Avik Roy, Foundation for Research on Equal Opportunity: “Medicare Part B does not represent a “free market” for prescription drugs. Instead, the program uses government-administered reimbursement rates to pay for drugs. The structure of this system is far removed from how a true market would work.”
      Peter Bach, MD, Director of Memorial Sloan Kettering's Center for Health Policy and Outcomes: “There is no free market for prescription drugs in the U.S. The U.S. system of drug pricing is completely built on a foundation of government imposed laws and regulations that grant monopolies and market power to large players.”

    • JAMA: “High drug prices are the result of the approach the United States has taken to granting government-protected monopolies to drug manufacturers, combined with coverage requirements imposed on government-funded drug benefits.”

  • The 16 countries used for reference by and large have better health outcomes and longer life expectancy than the U.S., while spending about half as much per capita for health expenditures.

    • Kaiser Family Foundation and Peterson Center on Healthcare: Of the 16 other developed economies in the IPI, Americans have worse health outcomes than: Austria, France, Germany, Japan, Sweden, and the United Kingdom.

    • Central Intelligence Agency: Of the 16 other developed economies in the IPI, Americans have shorter life expectancies than 13 of them: Austria, Belgium, Canada, Finland, France, Germany, Greece, Ireland, Italy, Japan, Spain, Sweden, and the United Kingdom.

    • World Bank: Of the 16 other developed economies in the IPI, Americans spend more on health care as a percentage of GDP than all of them: Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden, and the United Kingdom.

  • The current system is broken.

    • CNN: “Americans pay anywhere from two to six times more than the rest of the world for brand name prescription drugs.”

    • Wall Street Journal: “Compared with the U.S., drug prices are far lower in many overseas countries...Critics have long held that the [U.S.] percentage-based ‘add-on’ fee creates incentives for doctors to use higher-priced drugs.”


MYTH #4: Americans do not support the Part B proposed changes.
FACTS:

  • According to a GOP pollster, Americans overwhelmingly support the International Pricing Index to lower drug prices.

    • Voters support the HHS proposal to lower drug prices by a 71-point margin (80 percent support vs. 9 percent oppose).

    • Majorities from both parties agree that Democrats and Republicans in Congress should support the proposal.

    • Notably, 8 in 10 voters believe the proposal will result in better care or have no impact on the care they receive.

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