Update on Drug Costs and Pharma, and Proposed Opioid Treatment

I receive The (WaPo) Health 202 in my email box, so based on two recent posts, I’d like to report on drug costs and drug treatment plans today.

Let’s talk about drug prices first, name-brand versus generic.

Congress is ignoring a real potential change to drug pricing, even though it has wide support across partisan aisles. (Picture Ted Cruz and Dianne Feinstein agreeing on a bill, but they agree on this one.)

The CREATES Act tries to even the playing field and foster development of cheaper generic drugs for the public. Big pharma companies have consistently tried to prohibit this by erecting barriers using established protocols for bringing drugs to market.

The problem the CREATES Act is trying to solve is this: big pharma companies who own the name-brand drugs need to sell large quantities of their drug to the generic drug developers so they can analyze the medications and figure out a less expensive way to produce, test, package, and distribute them as generics.

Selling drugs in high volume is a safety concern, so big pharma often plays the safety protocols card to deny their drugs from sale in sufficient bulk to the generic houses. Martin Shkreli, the 34-year-old billionaire CEO of Turing Pharmaceuticals, used this argument to prevent competition to Daraprim, a drug used to treat HIV patients. At the same time he raised the cost of Daraprim from $13.50 per dose to $750.00 per dose “because he could.” (Shkreli was convicted of 3 counts of fraud and conspiracy to commit fraud to his investors on January 28, 2018. But I digress . . .)

The CREATES Act tackles this problem by allowing generic drug houses to sue the big pharma giants for failing to provide them with sufficient quantity of samples to do their R&D to make the generic. Opening the courts to more lawsuits seems contradictory to conservative thinking, yet Ted Cruz and other conservatives support it. Lawmakers on both sides and public policy experts agree this policy shift is the best way to accelerate entry of cheaper generics to the marketplace. More generic availability and price competition to big pharma’s name-brands would lower the prices of drugs overall.

So why hasn’t Congress taken up this legislation yet? The answer is rhetorical, namely big pharma argues that it would only affect about 45 current drugs, and the lawyers bringing suit would clog the courts and walk away with money that should be kept in-house for their own R&D. And who writes campaign checks to congresspersons? Yup!


Now, on to item 2 in the category of drug treatment, and in particular treatment for the opioid crisis, gleaned from a report on Trump’s budget proposal from The Health 202.

The President’s Budget Proposal is not law and according to Vox, this one isn’t likely to become law because of the 60 required Senate votes to pass it. The purpose of proposing a budget from Mr. Trump and his White House is to lay out the administration’s stance on fiscal policy.

Mr. Trump’s budget proposal for nearly $17B in opioid-related spending in 2019 is a significant increase in new funding.

Congress’ spending bill, which passed last week and lays out the budget for the next two years, gives few specific directives for how the money should be spent, instead giving broad authority to HHS Secretary Alex Azar. “But Trump’s proposal fleshes out more details about how the president and his appointees think the crisis should be tackled.”

The Health 202 report goes on to explain in detail how the administration proposes to spend the dollars for opioid treatment. (https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/02/13/the-health-202-trump-s-budget-shows-he-is-serious-about-tackling-the-opioid-crisis/5a81de0130fb041c3c7d780f/?utm_term=.1f2e228b8262).

Some of the proposals for distributing these funds are indeed sound. For example, expanding grants to states for drug prevention and treatment and recovery; expanding Medicaid coverage of “evidence-based medication-assisted treatment,” and making these treatments uniform and consistent across all states; and putting $381M aside for the Department of Veteran Affairs to reduce physician-reliance on opioid prescriptions for pain management and to treat veterans and assist them in their recovery from addiction.

The negatives contradict these elements and are in the fine print of the budget proposal. They include a rollback in the ACA’s Medicaid expansion and suggest block-granting Medicaid with a per capita spending cap on it. These steps “would reduce future Medicaid spending and health coverage for many low-income Americans,” and would “work against combatting opioid drug abuse since Medicaid covers 4 in 10 non-senior adults who are addicted to opioids, according to the Kaiser Family Foundation.” The result is an overall weakening of the Medicaid and Medicare programs, which would in the long term, hurt Americans trying to overcome addiction.

Offering a broader look at the budget, the PBS News Hour summarized on February 12th that the 2-year Trump White House budget plan:

  • Budgets $4.4Tr in 2019, a 10% increase over 2017;
  • Includes $28B in Immigration and Border Security;
  • Includes *$13B in opioid treatment services;
  • Includes $716B in military spending;
  • Adds $984B (that’s almost $1Tr) to the deficit in 2019;
  • Eliminates 64 agency programs;
  • Reduces the EPA budget by $2.8B, primarily by eliminating climate change programs;
  • Will reduce Medicare spending by $554B and Medicaid by $250B over the next 10 years.

* I realize the numbers don’t agree, so I went to another news source, Reuters, and found more discrepancies there.

After passing the recent Income Tax Reform bill into law, the programs that help many middle- and lower-income Americans will be sacrificed in future budgets as a ploy for paying down the expanding deficit caused by said new tax law. There is no budget band-aid nor magic math algorithm, including cuts to or elimination of programs, that can turn this lead balloon of a tax law into gold for future generations of Americans.

Bev George

Healthcare Reporter for Indivisible Naperville