Prices and Competition to Shape the Year Ahead | Pharmaceutical Executive

The pharmaceutical industry faces a tumultuous year in Washington, as policymakers continue to press for curbs on too-high drug prices, and tax and budget reforms may threaten resources and initiatives for the FDA, the National Institutes of Health, and public health programs. Inaction by Congress and the White House will prompt more states to propose price transparency and negotiating strategies (see sidebar below), measures that industry fears will dampen investment in innovative research. Federal agencies will strive to rein in the deadly opioid epidemic, in the process generating more investigations and lawsuits citing manufacturers. These issues will shape the November mid-term Congressional elections, which already are heating up as Republicans seek to maintain control of the House and Senate amid continuing debate over government funding for healthcare and drug regulatory policies.

Coverage and controls
Efforts to scale back the Affordable Care Act (ACA) and state Medicaid and children’s health programs will further limit drug coverage and reimbursement. Pharma companies backed the ACA and agreed to pay millions in taxes to expand pharmacy benefits. Now higher out-of-pocket costs for consumers will squeeze drug utilization and ignite further efforts to rein in pharma prices. The Centers for Medicare and Medicaid Services (CMS) recently revised Medicare Part B drug reimbursement policies and has proposed measures to facilitate Medicare coverage of biosimilars and generic drugs. CMS also has floated a proposal for Part D drug plans to share with patients the rebates and discounts negotiated with manufacturers and pharmacy benefit managers (PBMs). A battle over 340B drug discounts pits pharma against certain hospitals, while the push for more transparency in drug prices and discounts could erode revenues for PBMs and further escalate the finger-pointing by manufacturers, insurers, and PBMs over who’s most to blame for costly medicines.

These trends will heighten interest in value-based pricing strategies that link drug coverage to patient response to treatment. CMS and insurers also eye arrangements to spread reimbursement over several years for one-time breakthrough therapies. Sponsors will need credible data to convince the Institute for Clinical and Economic Review (ICER) and other third-party analysts that the benefits of a new medicine justify costs.

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Prices and Competition to Shape the Year Ahead | Pharmaceutical Executive.

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