Republicans Should Target Big Pharma’s Patent Abuse, Not PBMs
Mid-summer of an election year marks the starting gun for a familiar marathon of jockeying in Washington. Congress punts funding to keep existing policies, some critical, to the lame duck session and lawmakers position their favored proposals to quietly slip into must-pass legislation without thorough vetting.
That makes summer a good time to shine a bright light on misguided ideas – before they find their way into year-end legislation.
Among these bad ideas are proposals that come directly out of the Big Pharma wish list to increase the pricing power of drug companies and pharmaceutical industry profits by undermining the market-based, cost-saving role of pharmacy benefit managers (PBMs).
Big Pharma is trying to capitalize on concerns around the affordability of prescription drugs to bait and switch Congress into passing legislation that would directly boost revenue for drug companies, increase their power over drug prices and increase costs for American patients, taxpayers, and employers.
The best time to pass a disastrous $32 billion Big Pharma bailout paid for by the American people? During the chaos of a post-election lame duck.
That’s why Republicans in Washington should pay attention now and reject Big Pharma-backed calls for a deal with Democrats to impose greater government control and regulation in health care by undermining the role of PBMs. Following a path born of an alliance between Bernie Sanders and Big Pharma would exacerbate intransigent inflation by increasing federal spending and prescription drug costs.
Instead, Republicans should rally around a sound approach to funding critical policies later this year that would put American patients, businesses, and taxpayers first – by actually lowering costs for consumers and reducing the deficit.
That approach in health care must rely on letting markets properly function.
Pharmaceutical patent abuse, common among Big Pharma companies, distorts the prescription drug market and drives up costs.
The Initiative for Medicines, Access & Knowledge (I-MAK) found that on average, there are 74 granted patents on our country’s top ten selling drugs, allowing Big Pharma companies to undermine competition and keep more affordable alternatives to brand name medications, like generics and biosimilars from coming to market. Patent abuse on just five brand name drugs, according to Matrix Global Advisors (MGA), cost $16 billion in lost savings in just one year.
Avik Roy, president of The Foundation for Research on Equal Opportunity (FREOPP), recently wrote a piece highlighting the need to crack down on patents that do not represent true innovation, saying, “Not all patents are created equal, and not all bureaucratic decisions to issue patents are infallible. Patent examiners in the U.S. routinely issue patents—and thereby 20-year monopolies—for claims that aren’t real inventions. Just as pruning a rose bush helps it grow, clearing out weak patents improves the quality and legitimacy of the truly innovative ones.”
Solutions that would improve competition in the market by cracking down on these monopolistic tactics would effectively lower prescription drug prices, prevent further government interference in health care and improve the health of the prescription drug market.
Several such solutions already enjoy strong support from conservatives in Congress, including a package that passed unanimously out of the U.S. Senate Committee on the Judiciary last year. “Count me in for challenging the patent system,” said U.S. Senator Linsey Graham of South Carolina, the lead Republican on that Committee, in a recent hearing. “The idea of playing games with patents needs to stop.”
The Congressional Budget Office (CBO) recently updated its analysis of one of the Senate Judiciary solutions to improve competition by cracking down on Big Pharma’s patent abuse, The Affordable Prescriptions for Patients Act of 2023 (S.150), and the projected savings jumped from $1.109 billion to $3.019 billion.
In total, CBO’s projected savings on the Senate Judiciary package of bipartisan bills that address Big Pharma’s patent abuse is now in the neighborhood of $6 billion.
These solutions would prevent more government control in health care, hold Big Pharma accountable for gaming the system, effectively lower drug prices for the American people and produce significant, CBO-verified savings for taxpayers.
They are a no brainer, especially when stacked against pharma-backed alternatives that would increase costs for patients and employers, add new regulation and government control in health care limiting employer options and boost drug company profits and power.
In addition to the significant savings patent reform would generate for taxpayers and patients, lawmakers can look to unspent COVID-19 emergency funds, such as the $3.8 billion unused mental health funding that was intended for emergency coronavirus response, to fund other pressing health care priorities – without needing to impede market forces elsewhere in the system or increase the deficit.
Letting the government keep these funds stockpiled is a recipe for them to be lost to waste.
Cutting a deal with Democrats to pass a Big Pharma bailout that impedes the freedom of American businesses and increases costs for everyone else would be far worse.
That’s why Republicans should lead this process, guided by a commitment to markets, employers, taxpayers and the American people. They can start by prioritizing patent reform that holds Big Pharma accountable to lower drug prices.
Republican Ryan Costello served as the U.S. representative for Pennsylvania's 6th Congressional District (2015-2019) and serves as an advisor to the Pharmaceutical Care Management Association (PCMA).
