This week’s post from our blog “Prescription for Change” is also published this week in Harvard University Press’ Health and Human Rights Journal. That article, available here, says that President-elect Donald Trump’s ambitious words about bringing down prescription drug prices do not have to be empty promises—the legal mechanisms to reduce prices are there for him if he wants to use them. The article is also pasted in below:
In the interview that accompanied President-elect Donald Trump’s Time magazine Person of the Year story, he said, “I’m going to bring down drug prices. I don’t like what has happened with drug prices.”
If you don’t find yourself agreeing with Trump very often, you may have finally found common ground. As the man said, there is a lot not to like.
The global crisis in medicine access is deadly and shameful, causing millions of unnecessary deaths each year. Even in the comparatively wealthy U.S., the cost of prescription drugs is bankrupting families and forcing many to choose between paying for medicine or food. Monopoly-protected medicine prices are straining state and federal health budgets. Hundreds of U.S. cancer physicians wrote an angry article in Mayo Clinic Proceedings protesting the fact that one in five of their patients can't afford to fill their prescriptions—not surprising, with the cost of cancer medicines now averaging over $100,000 per patient.
EpiPen price hikes and the greed of “Pharma Bro” Martin Shkreli are just the most high-profile symptoms of a diseased medicines system that features routine double-digit annual price increases on many necessary drugs. As a result, a large majority of Americans are demanding action on drug pricing.
Trump has heard them. And, to his credit, this is not the first time Trump has raised the medicines issue. During the campaign, he had harsh words for pharmaceutical corporations and vowed to support much-needed negotiation of drug prices paid by Medicare.
There are a lot of Trump promises he is never going to deliver on, and maybe never intended to. Good luck getting uniform compliance with everyone saying, “Merry Christmas.” The much-promised wall on the U.S.-Mexico border would be architecturally impossible, among other problems. He may not even be able to get some of his Cabinet appointees confirmed by the U.S. Senate.
But lowering drug prices, meaningfully and quickly? That he can do. I have not seen my name on any list of potential Trump Administration appointees. I have yet to be summoned to an interview at Trump Tower. But here is some unpaid advice, and it has an aggressive ring to it that I think the President-elect will like:
One of the most frustrating aspects of the drug pricing crisis is that most of the truly impactful medicines trace their origins back to government-funded research. The Bayh-Dole Act of 1980 provided the legal foundation for a shameful give-away of taxpayer resources to corporations, allowing the monopoly patents on federally-funded inventions to be claimed by private entities—which then sell back the invented medicines to the U.S. government at monopoly mark-up prices. (Any surprise that both Senators Bayh and Dole have spent a good portion of their post-retirement careers working on behalf of pharmaceutical corporations?)
But Bayh-Dole does contain one safety hatch, which those concerned about the give-away were assured at the time would protect taxpayers and patients: march-in rights. Whenever the federally-funded discovery is not available on “reasonable terms” from the patent holder, or if a health or safety need arises, the government has the right to “march in.” That means the government agencies can license the invention for manufacture by someone else for sharply reduced costs. (Generic medicines are priced as much as 90% less than patent-protected versions.)
But, guess how often the federal government has exercised their march-in rights in the 36-plus years since Bayh-Dole’s passage. Zero. Now guess how many pharmaceutical company officials used to work for those federal agencies or vice versa, and how many corporate lobbyists are devoted to making sure that march-in never occurs? Lots. The industry that is arguably the most profitable in recent history is determined to stay that way.
Those folks have managed to straight-face argue that the “reasonable terms” safeguard in the Bayh-Dole Act does not mean pricing at all . They claim the only requirement on the beneficiary of a monopoly of a government-discovered drug is to make it commercially available, no matter if it costs a million dollars a pill. As one journalist put it , “it is also fair to say that most of the attorneys who make this argument represent drug companies.”
To date, the National Institutes of Health under multiple presidents, including Obama, have bought into this demonstrably preposterous interpretation. Every time a march-in petition has been filed, the NIH has denied it. As a certain future President would say: Sad. Very sad.
The most significant harm in avoiding march-in is that it has signaled to pharma companies that there is no limit on what they can charge. As multiple members of Congress have said, and some similar events have proven, even the threat of march-in by NIH could bring down medicines prices significantly. Is the President-elect who prides himself on his negotiating prowess listening?
There are many medicine candidates for march-in right now. One is Xtandi, the prostate cancer drug developed at UCLA with federal funding and now patented by Japanese pharma company Astellas, who sells it back to the U.S. at enormous markups that pull the annual price tag over $100,000 for each patient. The NIH under Obama and Francis Collins rejected a Xtandi march-in petition earlier this year, but the petitioners have signaled they may refile under a new administration.
I hope they do. And I hope the President-elect takes the opportunity to prove this is one promise he can deliver on.