hi everyone and thank you for joining us for today's webinar getting it right drug pricing reform that works for patients and the medicare program my name is sue peschen and i serve as president and ceo of the alliance for aging research the leading non-profit organization dedicated to advancing research and improving healthy aging for all the alliance is co-convening today's event with the usc shaffer center for health policy and economics this the schaefer center is a collaboration between the usc price school of public policy and the usc school of pharmacy whose mission is to measurably improve value and health through evidence-based policy solutions for those interested in learning more about our organizations and funding sources you can visit our respective websites we have enabled live transcription of this webinar and you'll see a notification above closed caption live transcript at the bottom of your screen and we posted info here on how to turn closed captioning on and off throughout today's discussion we encourage you to use the q a feature to submit questions to our panelists submit your question at any time and as we move to the final portion of the webinar i'll pose as many of these questions as time allows to our panelists our first speaker is congressman scott peters congressman peter serves california's 52nd congressional district first elect first elected in 2012 he currently serves on the house budget committee and the house energy and commerce committee as well as the joint economic committee representative peter's emphasis has been on promoting and expanding san diego's innovation ecosystem advocating for san diego's pivotal role as a partner in the national defense and making government work again one month ago representative peters and representative curt schrader from oregon introduced the reduced cost and continued cures act or the rcc rcca which the alliance supports to lower patients prescription drug costs and protect our nation's ability to find cures the proposal includes an annual cap on out-of-pocket costs for seniors as well as provisions to address loopholes in the health care system and reduce the cost of drugs for the medicare program congressman peters thank you so much for all the work you've been doing welcome and thanks for being with us today thanks so much for having me and for the chance to talk a little bit about uh drug pricing reform and where we are in congress um let's start with an understanding that um it's wrong for seniors to have to choose between paying their rent and affording their medicines i think every democrat actually would like to tackle that i think a lot of republicans would as well um and obviously there's been some discussion about what's the best way to do that the democrats um proposed bill from last term which we call hr3 that's the number of the bill would put a cap on the amount that seniors could pay at the counter and would put a cap on the amount drug prices could be increased from year to year but i had one thing that i had a problem with which is um the negotiation regime that they suggested would set a reference price based on international prices could be a different reference price but i would say to companies who produce these cures take our price or we'll take 95 percent of your profits 95 excise tax i expressed concern last term in in the past that that's a pretty um strong signal to investors that you may put all this money at risk to develop these cures but um you also may not be able to to get a return on that money we thought that there was a real concern we had a real concern that it would dissuade people from investing now why is that important uh the development of drugs is a partnership of the public and the private sectors so in my district in san diego we rely heavily on the national institutes of health to fund our scientific research institutions we have the salk institute scripps research institute joy immunology stanford bourbon and previous cancer ucsd all of them compete for funds from the national institutes of health nih to do basic scientific research not directed toward creating a product but really to understanding the basics of science and chemistry that affect people's health i'm one of the biggest advocates i'd say there's no bigger advocate for the funding of nih than me i mean there's a lot of us but none are more ardent than me and since i've been in congress in 2013 i'm proud to say that the budget for nih has gone from about 29 billion to over 40 billion dollars and that's so vital for our science ecosystem here but nih doesn't develop um products that's left to the private sector and if you think about the investment that the federal government made in the internet years ago or in gps taxpayer money had a lot to do with inventing those things but we don't commercialize that's left to the private sector and if you think about the role the private sector sometimes it's pooh-poohed but in 2018 the private sector invested 102 billion dollars in research um into life sciences now again 40 billion dollars for the nih it's a lot of money but it's dwarfed by the private investment that money comes into the uh comes in as risk capital it um it's um totally without risk to taxpayers and we taxpayers don't pay for anything until at the end it's certified to be safe and reliable by the fda so there's no risk to taxpayers but the cost it is risky because the cost of a drug that's successful costs about a billion dollars to get from beginning to end and um the you know if you account for failures it's more on the line more in the lines of two billion dollars because 95 don't make it to market so um this is very important for us to preserve um and if you dissuade those investors from taking that risk we face the we face the possibility that those cures won't be there at the end um i we heard from a number of investors not the big pharmaceutical companies but the people who actually put risk capital up that if you did this 95 excise tax that funding would dry up for this and that the job losses would be sudden and immediate and then over time we would see the loss of cures now one of the reasons i'm important to me is i'm from san diego which is the third leading biotechnology cluster uh in the country we have about 68 000 jobs directly in life sciences 175 000 in directly or indirectly relying on it almost a thousand companies um doing this work now so that of course we're proud to have eli lilly and johnson and johnson and pfizer and those big companies here they're important employers but almost a thousand companies that means that there's a lot of small scrappy uh entrepreneurs out there trying to rely on risk capital to develop these cures a lot of autoimmune diseases a lot of risky diseases the work's going on every day to solve the really big ones like alzheimer's which are expensive and widespread and the little ones that are so meaningful to the to the hundreds of people who may have a rare disease but um but not as widespread and uh that's a that's a real reflection of the importance of american science uh in terms of jobs here um and i would just say to you that um you know if if you're from michigan you're for cars if you're from iowa you're from porn you gotta expect that if you're from san diego you've got to stand up for biotechnology and i do um the uh but it's not just about the money and the jobs i want to say um just in conclusion that it's really about the cures and i think you know this association for aging research but other groups that advocate for the development of cures for things like als for alzheimer's lupus ms have all expressed concern that we not put at risk this ecosystem that develops these cures by shutting off the faucet of private investment so um the the bill that we've and i also would just say that the except the the disability council is also concerned that the way other countries keep costs low is that they cut off access and we don't want to do that either so the bill that we produce as an alternative to hr3 uh would put some of the same caps on on what people could spend on the counter the hr3 is a two thousand dollar cap we we did a great uh radiations based on income 3100 is the max you could spend in a year 1800 1200 more relief for the neediest seniors we also put a 50 a month cap on insulin we we also included an inflation cap and we clawed we started the inflation cap in 2016 so we fall back uh profits from pharma over the cost of inflation um to pay for this and it generates at least 200 billion dollars more for the for investments in other health care priorities uh and we stopped patent gaming so that when companies sometimes try to extend out their patent exclusivity uh beyond um beyond the eight years or the twelve years it's allowed by law we kind of put an end to that so that there can be competition from generics and other other manufacturers um i guess the other thing i would just say too is that we do allow negotiation for medicare that's been one of the interests of democrats um but we we make sure that it's tailored for when there's no competition uh after the period of exclusivity after people have a chance to get a return which is what induces that continued investment so we think it's a good uh a good alternative we are encouraged that uh it's being discussed by some of the senators senators who shared this concern uh the white house has uh has been in touch with us and we really have to get this done we want to make sure that seniors don't overpay at the counter we want to make sure that we don't also just disrupt or even endanger the ecosystem that generates these cures both on the public side and private side so i appreciate the the support a chance to explain my position um and i'm i'm optimistic that democrats will come up with a build back better plan that includes a drug pricing plan a drug pricing program that meets all of those objectives thank you congressman peters that was terrific um i just wanted to reiterate one of the points you made uh research america used to put out an annual report their last one was a couple of years ago and i think they're going to be re-upping it in the coming year but it was looking at r d investment and for every one dollar of federal investment there were three dollars of industry investment the rest were from you know academic and all that but just in very small percentages so i think it's a really important point that gets lost all right our next speaker is dr erin trish co-director of the usc shaffer center and an assistant professor of pharmaceutical and health economics at the usc school of pharmacy in addition dr trish is the non-resident fellow in economic studies at the brookings institution and a scholar with the usc brookings shaffer initiative for health policy dr trish welcome and thank you so much for being with us today thank you so much for the introduction and for everyone for joining us today uh let me just get my screen share okay well thank you so much uh congressman peters did an excellent job of of describing the important issues that we're uh discussing today and the real difficult trade-offs that you know this these are complex issues with difficult trade-offs with very real and high-stakes consequences and ultimately that's in large part why the creation of the part d program was predicated on competition among private plans now i'm sure everybody on the call today is familiar with the fact that there's a pretty significant amount of policy focus and discussions going on in around drug pricing reform today and you know the specifics of these various proposals vary but in general they kind of share the common sentiment that would have the federal government take a more active role in determining drug prices or at least many of them do and that seems to be you know driven by a sense that the market is not functioning as it should to constrain prices through competition and so given that kind of prep basic premise i think it's important to take a look under the hood at what we actually have in terms of the medicare part d market today and in fact if you look at the part d standard benefit design what you see is that it's actually the federal government that bears the largest risk for spending once beneficiaries reach catastrophic coverage or reach a high level of prescription drug spending this is through the federal reinsurance program you know this program made a lot of sense if you think back to 2003 and the creation of part d there was a lot of real concern about whether plans were even going to be willing to participate in this kind of unprecedented standalone prescription drug insurance program and a lot of risk about the financial liability that they would take on in doing so and so this made a lot of sense to provide a backstop to encourage this market to get off the ground but what's happened over time is that with the evolution of the prescription drug market since the inception of part d we've seen a considerable shift in the concentration of prescription drug spending so that we're nearing now a significant share of spending occurring among this small fraction of beneficiaries who reach catastrophic coverage and that means that the federal spending on this reinsurance program has become quite sizable and in fact our research at the shaffer center has found that part d plans you know despite the the kind of nature expectation of competition in this market part d plans are only actually liable for about a third of the total spending that occurs in this program and they're particularly limited in terms of their exposure to the the high cost or high expenditure region and that really limits their incentive to kind of effectively or strongly manage spending uh that happens among among the spending and utilization that happens when beneficiaries are in that high cost region instead it's actually the federal government that's directly financing the majority of spending that occurs in this program today it's also the case that if you look at the evolution of the beneficiaries enrollment and plans over time we've seen a considerable reduction in the share of beneficiaries that are enrolled in basic plans and basic plans are important because that's what the part d competitive bidding design or the program design is is modeled around is really encouraging value and competition among this basic uh benefit design what we've seen instead is considerable increase in enrollment in enhanced plans largely because of the growth in the medicare advantage program and also in employer plans uh largely because of changes in the aca and so what that means is that it's actually a minority of beneficiaries that are enrolled in plans that face these strong competitive incentives today one other impact or effect that's been you know in some sense driven by this benefit design is this increasing presence of rebates or these after the fact discounts paid from manufacturers to pbms and plans we've seen considerable growth in rebates as a share of part d spending over the last decade and that's really driven a wedge between the list price of drugs and the net price of drugs after these rebates have been applied what that means from the beneficiary's perspective is that because the cost sharing percentages of the standard benefit design are tied to the list price and the list price is inc increasingly not reflective of the net price the part d benefit has actually been considerably diluted in terms of what it provides beneficiaries the protection it provides beneficiaries over time research from my colleagues at the schaefer center has found that in fact beneficiaries are paying a much higher share of spending when you base it on the net price of drugs and coming back to the competition point unfortunately beneficiaries are most exposed to this overspending in classes of drugs that have the most competition because that's where the rebates are biggest and this wedge is most significant so what do we do from where do we go from here well fortunately there are a number of proposals under discussion that would significantly redesign and modernize the part d benefit structure to give plans more skin in the game so that they would face more risk and have stronger incentives to effectively manage utilization and spending throughout the entirety of the benefit design particularly included in in the catastrophic or high cost spending region as well as capping patients out of pocket expenditures and their liability to high spending you might be wondering though you know even if we give plans more skin in the game is there enough competition there for the taking or are these just drugs that you know that have no competition and there's nothing plans can do so some research that we've done at the schaefer center indicates that actually the vast majority of spending that occurs in catastrophic coverage is spent on branded drugs that face some degree of competition and so in fact there are opportunities for plans to use their their leverage at the negotiating table in these conversations with manufacturers if they're given the stronger incentives to do so and finally our research suggests that the real way to make the biggest difference in terms of beneficiaries and and the the uh where they feel at in terms of their pocketbooks at the pharmacy counter is to ensure that these redesign provisions like those included in representative peter's bill uh based the cost sharing on net price rather than list price where we found that that would make a difference in terms of reducing out-of-pocket costs for about half of beneficiaries who don't receive low-income subsidies in the part d program and would also uh significantly reduce the share of beneficiaries who reach reinsurance or reach the catastrophic coverage to uh to begin with so just to kind of wrap this up i think it's important that as we have this conversation we recognize it in the context of it's not so much that we tried the private market and it failed but rather that we somewhat failed at trying the private market these are really important issues in terms of thinking about the cures and the the lives and the improvements in health that are at stake and the consequences of getting it wrong are quite significant and so i want to kind of provide this concluding perspective that there is a lot to be gained from reforming the part d benefit design and through this we can truly kind of harness the the goals of of market-based competition in this program and provide uh optimal value for beneficiaries and taxpayers alike thank you dr trish okay our next speaker is michael ward who serves as the vice president of public policy for the alliance for aging research michael advances research for aging related conditions through his leadership of the alliance's legislative and regulatory advocacy efforts he directs the alliance's efforts to reduce out-of-p out-of-pocket costs for patients through project lower out-of-pocket costs also known as project loop and co-leads the accelerate cure and treatments for all dementias coalition michael also represents the alliance on the innovation and value initiative patient advisory council and the adult vaccine access coalition steering committee welcome michael thank you sam so we're at a key juncture in u.s health care and affordability is a key issue as everyone here knows the medicare part d program for prescription drugs currently has no out-of-pocket maximum for beneficiaries the significance of congress implementing a cap cannot be underestimated according to cms 3.8 million beneficiaries entered the catastrophic phase of the part b benefit in 2019 when catastrophic coverage kicked in once the beneficiaries spent fifty one hundred dollars in out-of-pocket costs within a calendar year in 2021 the limit to qualify for catastrophic coverage is even higher at six thousand five hundred and fifty dollars much of the discussion on capitol hill has revolved around the politics of how much congress can save to pay for other priorities within healthcare and for other infrastructure through project loop we're working to return the conversation to where the focus should always be to patients so what can congress do to address affordability as we've discussed today the first is to finally create a part d out-of-pocket cap for patients most prescription drug reform proposals have included a fixed cap whereas as congressman peters mentioned his bill would introduce a graduated cap based on the beneficiary income the cap is important but congress shouldn't stop there many beneficiaries would still face large lump sum payments for out-of-pocket costs before they reach a cap this is a real problem if a patient faces eleven hundred dollars in out-of-pocket costs in january or february they may still face difficult decisions on whether to pay for their medications or to pay for other basic expenses the impact of these lump sum costs can result in patients not filling their scripts earlier this year research from the national board of economic research found that out-of-pocket cost growth of just over ten dollars per prescription led to a 23 drop in direct consumption and a 33 increase in monthly mortality a finding that held true regardless of a beneficiary's socioeconomic status to address these affordability issues congress must pair a cap with a mechanism that will smooth out cost over time such as through zero cost installments most bills have also included this cost smoothing provision but in some cases the flexibility would be difficult to qualify for hr3's provision on cost smoothing is particularly challenging as it would require patients to spend two thousand dollars in their first fill to qualify this is a key example of how the legislative process must return its focus to reforms that patients will actually be able to access and use a third option to address affordability which cms is included in its senior savings model for insulin and congressman peters would codify for those same patients as a flat maximum copay for drugs congress should explore whether expanding a low-cost maximum copay to other types of drugs would broadly benefit patients with other conditions beyond affordability it's essential to understand the unintended consequences on patients of some of these cost-saving proposals such as direct negotiation however the term really isn't an accurate description it isn't a real negotiation it's government price setting two cost setting proposals hr3's international reference pricing and the rumored consideration of utilization of the veteran affairs drug pricing system share a common flaw the use of cost effectiveness standards tied to the quality adjusted life here or the quality quality assessments assign a value to the patient population that a treatment is intended for these assessments are based on the perceived value of living with a given condition in comparison to being in perfect health the actual impact of quality based cost effectiveness is big because if a treatment is for a group that is sicker older or includes people with disabilities or is focused on a population that has historically based in equities in society and in the healthcare system the treatment is assessed as being less valuable another way of saying it is that these groups are considered more expensive to treat by concluding that a treatment is not cost effectiveness is not cost effective payers can justify restricting access by not covering it or by using management techniques such as step therapy that effectively restrict access the national council on this for disability an independent federal agency and others have shown that quality assessments undervalue treatments for conditions that disproportionately impact people with disabilities and older adults the very populations that are served by medicare use of the quality or similar types of metrics would violate civil rights law and president biden and the 2020 democratic campaign platform promised that qualities would not be used to restrict coverage however if we use allow the use of qualities to set prices and then effectively not make the drug available unless that price is accepted this promise could be broken utilizing the va pricing process would retain these problems the va formulary is already more limited than medicare's formulary and who helps the va with creating their formulary since 2017 it's been the institute of clinical and economic review or iser who uses quality based and quality derivative assessments not surprisingly a 2020 analysis of managed care organizations use of icer's quality-based reports in the united states found that three-quarters said that the reports factor into their clinical decision-making price-setting policies would also reduce access to new and current treatments in the us we have access to nearly 90 of new medicines while developed countries with price control mechanisms have access to only 47 the trump administration's most favored nation rule would have implemented by international reference pricing and medicare part b however medicare's actuaries found that one-third of beneficiaries would lose access to a drug that they currently took within three years at the start of the program so what do we do one part of the solution be should be to develop meaningful alternatives to the quality and current cost effectiveness frameworks we also need to advance value-based pricing models that are based on health outcomes that are meaningful to patients if assessments are not based on what patients and their families care about and we are not accurately capturing value valuations also need to incorporate varying needs and values that are held by different communities last month the alliance and project loop were joined by over 130 organizations on a letter to congress to outline the priorities that i've discussed today there is a clear mandate to address the benefit design and lower patients costs without turning our back on advancing equity it is essential that congress not do what is the most expedient but to ensure that they take uh they take have the conversation and sure that that they get this right thanks sir thanks michael okay i'm gonna ask everyone uh on the panel to turn their cameras on and we're going to start with some questions our first question is for representative peters at this point what do you expect democratic leadership will include in its reconciliation package on direct pricing uh i um first of all i think there will be drug pricing as i think the people have pointed out there's a there's a need to deal with the out-of-pocket cost issues at the pharmacy counter and i think that the proposals including mine all throw off a lot of extra savings for the federal government to be able to deploy toward other healthcare priorities whether it's making sure that people are covered by aca or by um or that the medicaid gets expanded or things like that so i think there's a real uh likelihood that if anything does get passed um this kind of drug reform will be drug pricing reform will be included now you ask me you know what's what's that going to be i made a comment at the budget committee that we're just not ready uh we're not ready to vote on this you know the um the premise that i credit the president and the speaker with is that we're going to pay for this uh build back better act or the reconciliation uh analytically to pay to sort of construct something you ought to know how much money you have up front it's very hard to tell what's going to actually be in the bill other than drug pricing until we know what the senate wants to provide in terms of funding once we know that i think we know how to um we'll know what we have to invest and we'll be able to do a better job but i would look for a lot of action uh by the end of october when the transportation funding runs out and there'll be more pressure on us to do another vote okay thank you i'm gonna ask um dr trish the next question so drug developers try and fail multiple times before they succeed but government seems to approach drug pricing more narrowly in other words they should be paid for the cost of goods sold and that's it what's the real world impact of that kind of approach sure thing so you know i think that uh the the congressman you know laid out these issues quite well in his opening remarks in terms of the response and in terms of the investment in in industry right i mean i think this is a very important issue and there's a lot of academic evidence that you know would suggest over the last few decades that the expectation on the return on that investment significantly affects the the magnitude of investment that's going to go into developing these drugs and that they're you know this is a risky industry by nature and we need to recognize that you know there's a lot of failures for everyone's success that comes out of this one of the big concerns that michael raised in his remarks was that hr3 would base prices here on prices set in other countries many of which use value assessments that have problematic implications or limit access to medicines have you heard from beneficiaries with concerns about these issues yeah we've heard from and also the disability community is concerned about that as well they've been very um vocal about their concern about that yes um you know the there's a kind of um wonder and magic to the ecosystem that we have in terms of providing cures and access and i think uh michael and aaron have have pointed out some of the ways we can improve it to make the markets work better you know we don't have to throw the baby out with the bath water and um i think that i think that there's ways to do that without there's ways to deal with the drug pricing issue without doing that absolutely and so as a follow-up dr trish um what what do you consider to be some of the alternative ways to think about assessing value that can overcome the limitations of a price setting type of model sure so some of my colleagues at the shaffer center have been leading research on ways to kind of better incorporate the the kind of risk and uncertainty that's inherent to health and health care in terms of thinking about the way that patients actually you know express their preferences over the existence of cures and things like that so i think our methods and tools to to kind of quantify and assess value are are developing and evolving but i think that the real point here is that you know it's you know probably not the case that any one method is going to get this right and that's why we want to have kind of competing options and uh give beneficiaries the choice of different plans that think of this in different ways i think what we want to be doing is encouraging uh to pay for uh drugs that you know deliver on value in the real world and we've seen examples of that evolving in the market i think there was a stat news article just in the last day or two describing uh pfizer's uh new pfizer's essential warrant warranty on one of their uh older lung cancer drugs right so if this drug doesn't work they're gonna pay back beneficiaries and the plans right that's exactly the type of kind of market-based solutions that uh guarantee that drugs are delivering on value in the real world that we want to be promoting rather than making an upfront decision about the way that this kind of does or doesn't present value across the board absolutely all right next question um there's been a lot of and this for anybody on the panel that wants to answer there's been a lot of emphasis on keeping premiums low in medicare part d is the time to consider a trade-off of higher premiums for lower cost sharing i mean i think one of the the kind of uh underlying reasons why premiums have been so low over time is partly the growth of rebates and that we're really kind of transferring dollars from beneficiaries who are taking these highly rebated drugs they're paying more at the pharmacy counter to subsidize the premiums of everyone else in this market and so i think you know it's not the case that premiums are low kind of for free but that's coming from funding sources which are really uh you know beneficiaries are feeling that at the pharmacy counter and so i do think that presents presents a challenge for how we kind of get our minds around the fact that you know premiums probably need to be a little bit higher to be able to restore the coverage generosity to where it should be today especially for these beneficiaries taking these highly rebated drugs where we actually see the most competition in those classes and i'll just add to that i think you know research that we've done polls we've done with morning consult have shown that over half of seniors would be willing to pay a few more dollars a month you know you know five to ten dollars a month just to have some of these protections in place i think you know when you look at the the ecosystem of how insurance has evolved there's been kind of uh pushing more focus uh more liability on on patients both you know and you definitely see that in the private market through high deductible plans um but i think you know as we're as we're serving the medicare program especially you know uh people that are on incomes that are fixed that kind of have um you know kind of a steady stream of of income but it may be limited you know we think we need to think carefully about kind of what you know what type of costs that we expose them to absolutely premiums are considered the sacrosanct that you can't touch and uh it's um it's really what the plans compete on and so consumers are not as you know well informed about what's underneath the hood so to speak and uh we actually think that's an area for reform uh so next question for congressman peters would you entertain negotiation in part d if the excise tax were dropped significantly um you know like i entertain anything i just think i think that we have to be really careful about this notion of the excise tax at all um and uh what what you know it's standard patent law that we provide inventors a certain amount of time to recover their um their investment that's kind of the notion of uh in drug pricing as well um what i've suggested is that negotiation should occur after the period of exclusivity when there's no competition um we've suggested in part b where a a lot of the most expensive um therapies uh are but also where there's an incentive today that i'm sure dr trish could explain better than i to actually inflate prices whereas in part d there is some downward pressure from the market on prices so i mean i think that the um you know that the negotiation can be used uh where the markets fail and that's where i would concentrate it but this suggestion that we would lower the excise price still implies i believe from the question that we would be regulating um prices right from the go and i think that that's that's a dangerous message to send to risk capital who are trying to invent these cures yeah erin did you want to follow up on that i think no that's great okay i love the professor gives me a decent grade that's check i mean i guess i will say that you know we are on the we are starting to see evidence on the um the part b side right these physician-administered and hospital-administered drugs that there is in fact competition coming through the biosimilars market as well and and kind of increasing evidence that that's picking up to deliver value on that side of the market too and so i think this delineation between you know letting them the competition uh kind of evolve as it will in a in the understanding and recognizing the evidence that suggests that that's happening is a is an important distinction to make in terms of thinking about uh the types of policies that the congressman's describing and i point out too that one of the reasons that the biosimilars may becoming more available is that we've extended the period of exclusivity for them to recover those of their investments so again uh you know we want to provide the incentives for these cures to come online and we don't have to be scared of that i think we should be we should be happy for that it's particularly in a year by the way when um you know the the vaccines that have saved our lives are named mark pfizer and johnson and johnson they're named not named after presidents there this is a really important part of a public-private partnership that generates these cures um i don't want that to move offshore i don't want that to disappear and i think that's clearly i have a a little bit of parochial interest representing san diego but i really do stand for american science on the public and the private side yeah and you got to represent your district all right uh one question that's more specific to your bill um i think this is a good one your bill would negotiate drug prices for medicare part d drugs that are off patent but don't have a generic competitor which is a narrower narrower universe of drugs that would be affected than hr3 how do you address criticism that your bill would have comparatively minor impact on overall drug prices for consumers well that right off the bat is wrong i mean the consumer we want consumers to go to the pharmacy counter also i think michael mentioned smoothing we have that in our bill as well maybe maybe our process could be improved but we want consumers to feel that when they go to the to the pharmacy counter they can afford their drugs and actually in many ways our bill gives more relief to consumers by setting a lower threshold for low-income seniors at twelve hundred dollars a year than hr three fifty dollar a month um fifty dollar a month uh limit on those expenditures for insulin and a cap on inflation i don't accept any any suggestion that my bill gives less relief to consumers than hr3 if anything we do better so that's one thing a two is that the criticism i do here is it doesn't throw off as much money for other things and okay that's probably true that is true but i'm not willing to pay the price of losing american science to do that i don't think i don't think we have to provide consumers relief democrats promised consumers patience relief at the pharmacy counter every single one of us is going to deliver that and my bill would deliver that just as well if not better than hr 3.
And just the minor thing is the the question talked about negotiation and part d delta where actually my bill is b bravo not d we were just talking about that too just just make sure we're clear but that's you know this notion that we're not providing relief to consumers is just flat manifestly wrong yep i think it's also just really important to make the point that you're going to be cutting access and they'll likely be shortages too i mean we all experienced this in the late set well those of us who remember in the late 70s with gas prices and oil sitting in those long lines and it's likely to have a similar effect with pharmaceuticals and folks don't want to have shortages they don't want to have to you know give up newer treatments and new cures so there's a lot of impacts that even go beyond the innovation piece and where folks are going to be getting their business from so this next one is for everybody on the panel uh what is the role of pbms and insurance companies in setting the prices actually paid by patients at the pharmacy counter and what can be done to counteract the influence of these supply chain intermediaries to the benefit of the individual consumer um i'll start with you aaron sure so i mean i think ultimately the the pbms and insurance companies are the ones who are you know negotiating formularies and determining what cost-sharing patients will face at the pharmacy counter pbm industry in particular is a highly concentrated industry and as you know we've described in several instances across the conversation today there's a lot of perverse incentives related to uh essentially inflating list prices or negotiating for higher rebates rather than lower uh prices that are kind of lower cost sharing for patients at the pharmacy counter i think there's a number of provisions included in in representative petersburg's other bills that would increase transparency in this market and would try to improve uh essentially the functioning of this supply chain you know we've done a lot of work about the significant share of the dollars that are spent in in this market that are actually captured by these intermediaries and not going back to the innovators and i think the goal of this is to try to you know increase the competition in this market to try to make it better function and to deliver that that value to the patients uh rather than some of the intermediaries i think from the patient's side it you know as as aaron mentioned i mean it's and there is at first the way that we have it now where you know the the beneficiary sure of you know co-insurance is based on the sticker price rather than you know the price that they're their plans insurers actually paying for the drug um does you know does kind of strike us it strikes me as being you know very non-patient-centric and so i think you know as we're approaching direct pricing reform yes prescription drug companies need to come to the table and you know they have a big part to play but we also need to realize the role of pbm is of insurers of groups throughout the ecosystem that kind of touch that touched a prescription drug you know from the point of of its creation to the point the time gets to the patient or else that they all have a role in helping reduce drug costs and make sure that they remain sustainable congressman peters last word on this before we wrap up i don't have anything to add to that those are pretty smart academic uh comments i don't want to dilute okay yeah i mean i i just i just want to flag you know that you know and um you know that i think that's kind of something unique about your bill is that we haven't seen kind of that approach uh to basing cost on net price rather than on this price and other proposals so you know i think that's that's a key differentiator and would create you know as aaron you know as dr chris talked about you know would be a fair bit of savings for you know in addition to the cap in addition to the smoothing provisions that we talked about so i think it's a really important provision absolutely well thank you to congressman peters dr trish and michael for their insights today and thanks to everybody here for joining us um our recording of today's webinar is available on the alliance and usc shaffer's individual facebook pages which we encourage you to visit and subscribe and the recording is also going to be available on the alliance and usc shaffer's respective youtube pages in the coming days we thank you for joining us for today's program and we look forward to continuing the conversation have a great day
