Dive Brief:
- The pharmaceutical industry's largest lobbying group has launched a campaign aimed at answering some of the biggest questions surrounding the cost of drugs — and letting consumers know the catalysts for rising prices.
- As its name suggests, the “Let’s Talk About Cost” campaign is PhRMA's attempt to spur dialogue on topics such as mounting costs for chronic disease patients and keeping treatments across therapeutic areas more affordable. The initiative also shifts blame for high out-of-pocket costs, a common move among many drug pricing stakeholders.
- "While biopharmaceutical companies set the list price for a brand medicine, more than a third is rebated back to payers and other middlemen in the supply chain. Ultimately, your health insurer determines what you pay for your medicine out of pocket," Robert Zirkelbach, PhRMA's EVP of public affairs, wrote in a July 12 post on the group's website.
Dive Insight:
Drug pricing has been a contentious topic across the pharmaceutical industry over the last few years. State and federal lawmakers, as well as consumer-focused advocacy organizations, have increasingly pined for greater transparency and limited hikes on prices. Even Scott Gottlieb, the fresh head of the Food and Drug Administration, is making pricing a central focus, enacting reforms to get more low-cost generics to market.
Much of the pushback has targeted drug manufacturers, which have defended themselves by pointing to other pieces of the healthcare puzzle as reasons for high out-of-pocket costs. PhRMA has specifically called out insurers and pharmacy benefit managers (PBMs) for not passing the money they save through discounts and rebates to consumers.
In a June report, the trade group highlighted that Express Scripts, CVS Health, the Centers for Medicare and Medicaid Services and QuintilesIMS all had lower spending growth in 2016 than they did in 2015. Express Scripts, for instance, saw spending growth decrease from 5.2% to 3.8%. Another report issued earlier this year from QuintilesIMS found that strengthening negotiating power among payers and PBMs stands to limit how much money will be paid out for medicines over the next five years.
Those other groups have been quick to hit back, arguing that hefty list prices aren't doing anything to help keep patient costs down.
"Drugmakers have increased list prices an average 125% on multiple sclerosis drugs from 2011 to 2016, despite relatively low rebates on these medications," the Pharmaceutical Care Management Association, a PBM trade group, said in a report earlier this year. "This has resulted in an average net price increase of $3,232 per prescription for [multiple sclerosis] drugs over that time period. "
“Let’s Talk About Cost,” therefore, functions as both an educational tool as well as a defensive one for the pharmaceutical industry. And so far, it appears to be following the same themes that have been rampant among drugmakers, insurers and PBMs.
"We recognize that many are struggling to access the medicine they need and have important questions about their medicine costs. And we want to help find the answers," Zirkelbach said in the July 12 post.
"Biopharmaceutical companies offer patient assistance programs that have helped millions of patients access needed medicines for free or nearly free," he added. "They are also working with private health insurers to find new ways to pay for medicine that reward outcomes and lower costs for patients."
This campaign follows a previous effort by PhRMA to highlight the innovation done by the industry —but more specifically, the cost of innovation. The GoBoldly campaign, as it is called, has been criticized for not directly touching upon the subject of drug pricing, even if its underlying intent was to support current industry pricing decisions and validate the high cost of drugs.