Pension & Benefits News House Judiciary Committee approves bills to lower prescription drug prices
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Thursday, May 23, 2019

House Judiciary Committee approves bills to lower prescription drug prices

By Pension and Benefits Editorial Staff

The House Judiciary Committee announced that it has unanimously approved four bills intended to lower the costs of prescription drugs. Those bills are the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act (H.R. 965); the Preserve Access to Affordable Generics and Biosimilars Act (H.R. 2375); the Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics (Stop STALLING) Act (H.R. 2374); and the Prescription Pricing for the People Act of 2019 (H.R. 2376).

The CREATES Act would curb the practice whereby brand-name drug companies prevent potential biosimilar and generic competitors from obtaining samples of the branded product, which are necessary to prove that the medicine is equivalent to the brand-name product, a prerequisite for Food and Drug Administration (FDA) approval. Under the legislation, a biosimilar or generic manufacturer would be permitted to seek injunctive relief in order to obtain the necessary sample when access to samples was blocked.

In his opening statement for the markup yesterday, House Judiciary Committee Chairman Jerrold Nadler (D., N.Y.) declared that by refusing to give samples to generic companies, branded pharmaceutical companies engage in “gamesmanship designed to prolong the branded companies’ monopoly power.” The legislation would also prevent brand-name drug companies whose products require a distribution safety protocol from refusing to allow biosimilar and generic competitors to participate in the safety protocol with the explicit intent to delay competition.

In his opening statement for the Preserve Access to Affordable Generics and Biosimilars Act, Nadler announced that the legislation would prohibit one of the “outrageous delay tactics, so-called ‘pay-for-delay’ settlement agreements” used by the pharmaceutical industry to prevent generics from entering the market at a lower cost than brand-name drugs. The Act would strengthen the FTC’s ability to challenge anticompetitive pay-for-delay agreements in court.

The Stop STALLING Act would create an FTC cause of action against sham petitions, create a rebuttable legal presumption of illegality for certain petitions referred from the FDA with a finding that they were submitted for the primary purpose of delaying the approval of a drug application, and grant the FTC the authority to seek civil penalties for violations. In his opening statement, Nadler discussed abuses of the petition process that the legislation is intended to cure, including actions taken by a company to maintain its monopoly over Suboxone, a treatment for patients who are addicted to prescription painkillers, heroin, and other drugs: “According to the complaint, Indivior filed a series of sham petitions to prevent a generic competitor from entering the market with the same Suboxone tablets that it sold and marketed for nearly 10 years at a profit of over $2 billion dollars…[b]y abusing the citizen petition process, Indivior reaped monopoly profits from its sale of Suboxone film, and it deprived victims of opioid addiction and medical practitioners the benefits of generic competition.”

The Prescription Pricing for the People Act directs the FTC to evaluate the current state of the PBM industry, determine whether more information about the roles of intermediaries would benefit consumers, and offer policy recommendations to improve transparency, prevent anticompetitive behavior and promote efficiencies for patients. The legislation commissions the FTC to evaluate whether PBMs: charge certain payers a higher price than reimbursement rates for competing pharmacies while reimbursing pharmacies in which the PBMs have an ownership interest at the rate charged to payers; steer patients to pharmacies in which the PBM has an ownership stake; and use formulary designs to depress the market share of low-cost, lower-rebate prescription drugs. Nadler announced that evaluation of the industry is necessary because three PBMs control the majority of the market and the largest PBMs own the largest retail pharmacy chains. Therefore, "[a]s a result of this concentration of market power and inherent conflict of interest, these firms have the incentive and the ability to leverage their dominance in the PBM marketplace to steer business to their own pharmacies and away from competitors, or to raise their rivals’ costs."

Lawmakers’ reaction. Emphasizing the bipartisan nature of the legislation, Congressman Jim Sensenbrenner (R., Wis.) praised the passage of the CREATES Act and Stop STALLING Act out of the Committee. Congressman Sensenbrenner is a sponsor for both bills and thanked co-sponsors David Cicilline (D., R.I.) and Hakeem Jeffries (D., R.I.).

Senators Amy Klobuchar (D., Minn.) and Chuck Grassley (R., Iowa) cheered the progress of the legislation through the House.

"So often, we hear that political differences in Washington are preventing progress on important matters facing our country," said Grassley said in a statement released today. "But it’s clear that improving access to affordable medications is a cause that lawmakers from across the political spectrum can support. I’m encouraged by the growing momentum in Congress to make sure the prescription drug market is working for patients and taxpayers alike."

Klobuchar, who introduced the Preserve Access to Affordable Generics and Biosimilars Act and the Stop STALLING Act in the Senate said: "With the passage of my bills out of the House Judiciary Committee, we are one step closer to ending the unfair practices that drive up prescription drug costs."

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