Last month, Congress decided to abandon its attempt to reform pharmacy benefit managers (PBMs). Advocates say other drug pricing issues need special attention right now.
STEVE KNIEVEL; sknievel@citizen.org
Knievel is an advocate for Public Citizen’s Access to Medicines program.
Knievel told the Institute for Public Accuracy: “PBMs have had some pernicious effects on the drug system and on independent pharmacies as well. But as Peter [Maybarduk, Knievel’s colleague at Public Citizen] said [on February 9, during the Senate HELP Committee hearing on drug pricing], ‘the fish rots from the head.’ The drug corporations are the ones who set the prices. They could set different prices if they chose to. PBMs can arguably exacerbate some of these problems, but it’s the drug corporations that have the monopoly power that is the primary basis of our excessive, out-of-control drug prices.”
PBMs “are only a distraction insofar as policymakers allow it to be one,” Knievel added. “It would have been a misstep to only do PBM reform and exclude various other measures to address monopoly abuses. None of those [reforms] were in the cards to be included in a package, even if PBMs were included this time around.
“Another point that fell by the wayside was the out-of-pocket caps for insulin… Majority Leader Schumer talked about extending that [$35 out-of-pocket monthly cap for insulin] to everyone. We wanted to make sure that the uninsured got low-cost coverage for insulin as well. We were hoping to see PBM reforms, patent abuse reforms, and insulin coverage expansion. But we got none of it. For the foreseeable future, it’s not going to happen. The political realities of an election year are becoming evermore present.”
Right now, one important aspect of progressive drug pricing reform focuses on patents and the Bayh-Dole Act. Bayh-Dole allows government contractors and grantees that make inventions to retain ownership of the patent of that invention; in exchange, the government retains some public interest protections of the patent. For instance, the Federal Trade Commission explains that under Bayh-Dole, “the federal government has the right to ‘march in’ on patents on inventions created using taxpayer funds,” requiring the patent holder to license the federally-funded patent to other applicants. Petitions have previously been sent to agencies like HHS and NIH to exercise march-in rights for prohibitively-expensive drugs like prostate cancer medicines, but this power has never been employed. In pursuit of increasing drug affordability, the Biden administration is currently undergoing an inner-agency review of when march-in rights ought to be employed; in December 2023, the National Institute of Standards and Technology released a draft framework to guide the government’s exercise of march-in rights. In February, the 60-day comment period closed on that draft framework.
“Once that guidance is finalized and comes out,” Knievel said, “we will be looking for ways that agencies can act upon it and explore what more the administration can do with its executive tools to lower drug prices in the coming year. This is an important piece of our work, because as much progress as we have made through the Medicare drug price negotiation system, there are serious limitations there. By using these sorts of mechanisms [like potential expansions to march-in rights], we can do more to expand access to medicines.”
Knievel noted that there is “insufficient public recognition about the benefits of the law that are already kicking in right now. As much as I’m profuse about the limitations of the law, it does go a long way. Progressives need to know about the progress we’ve made. We haven’t had wins like this in years—maybe ever—against Pharma. We can’t be overly jaded about what we haven’t gotten. If we sit back, Pharma is going to roll over us and take it all back.”
