Aug. 29, 2018

Center For Effective Lawmaking Discusses Rising Drug Costs, Other Issues With Congressional Aides

To deal with the crisis of the rising cost of prescription drugs, UVA’s Carolyn Engelhard, a Batten adjunct faculty member, puts forth this key question: Can Congress do something about it?

“Everybody agrees that it’s a problem,” said Carolyn Engelhard. “The difference in political philosophies may determine what kind of policy levers might be used to address the problems of high cost pharmaceuticals.”

That question took center stage at a roundtable conversation in July in Washington, D.C., where Engelhard moderated a discussion led by the Center for Effective Lawmaking, which is co-sponsored by the Batten School and has made in-roads in public policy. Vanderbilt University also co-sponsors the Center for Effective Lawmaking.

Engelhard met with aides serving Virginia’s two U.S Senators and three members of the Virginia delegation in the US House of Representatives. Others who attended included two congressional interns.

Engelhard explained in an interview that high drug prices are a clear bipartisan concern. “As the staff member from Sen. (Tim) Kaine’s office said, ‘We get lots of letters from constituents who say they just can’t afford their medications.’

“Everybody agrees that it’s a problem,” Engelhard said. “The difference in political philosophies may determine what kind of policy levers might be used to address the problems of high cost pharmaceuticals.”

As Engelhard told MedPage Today, “Over the last year and a half, the prices of over 2,500 drugs already on the market have increased by at least 10 percent.”

“My mission was to have people talk about the topic and to be a resource to them as an academic about the topic, thereby advancing the mission of Batten’s Center for Effective Lawmaking,” she said. Attendees received background reading to prepare for the one-hour lunch discussion. 

Aides came from Virginia’s two U.S. Senators—Democrats Mark Warner and Tim Kaine—and from three members of the Virginia delegation in the US House of Representatives: Republican Congressman Bob Goodlatte, Democrats A. Donald McEachin, and Bobby Scott.
Searching for a shared solution by Democrats and Republicans fits well with the aims of the Center for Effective Lawmaking, a joint project of Batten and Vanderbilt University. The Lugar Center of Washington, D.C. also co-sponsors the series of roundtable discussions. The July meeting was the second of three sessions seeking to effectively tackle this issue and others. 

As Engelhard met with her roundtable, Melinda Buntin, Chair of the Department of Health Policy at Vanderbilt, served as moderator for staffers of Tennessee lawmakers. Buntin’s session focused more generally on rising health-care costs, including higher prices for presecription drugs.

The purpose of the series is to facilitate bipartisan discussion and create networks that support effective lawmaking, said Greer Kelly, Operations Director for the Center for Effective Lawmaking. 

Batten’s Sally Hudson, Assistant Professor of Public Policy, Education, and Economics moderated discussion at the first roundtable, held in April. The other moderator was Carolyn Heinrich, Patricia and Rodes Hart Professor of Public Policy and Education at Vanderbilt. A third roundtable discussion will be held this fall.

Sally Hudson, center (photo by Greer Kelly)

Engelhard directs the Health Policy Program in the Department of Public Health Sciences at the University of Virginia School of Medicine, and she is Associate Professor of Public Health Sciences and Public Policy.

“I gave an overview of what the issues are, how prescription drug spending has grown a lot over the last few years, and the entrance of cancer drugs and biologics, like Humira, one of the world’s best-selling drugs, that treats rheumatoid arthritis—very new, expensive drugs,” she said.

“When you talk with people who have rheumatoid arthritis, other kinds of chronic inflammatory conditions like ulcerative colitis—these drugs can be game-changers” for significantly improving the quality of people’s lives. 

“We have so many more biologics like insulin that are not chemically based drugs, but actually are ‘biologics,’ which are manufactured in a living system such as a microorganism, or plant or animal cells.  Biologics are much more expensive.”

Engelhard’s group discussed the merits of cheaper generic drugs, but, as Engelhard said, “there are lots of ways that brand-name pharmaceutical companies slow the entrance of generics.”

Other policy issues included the often-discussed ideas to import cheaper drugs from other countries, and to have Medicare bargain with drug companies for lower prices.

“During the (2016) presidential campaign, both Hillary Clinton and Donald Trump endorsed (Congress) changing the law (to) allow Americans to re-import drugs from Canada at the Canadian price. It’s illegal to do that now.”

If importing drugs became legal, “you would be taking advantage of a country’s ability to fix prices, to have price controls,” Engelhard said. Recently, Alex Azar, the Secretary of Health and Human Services, indicated that he would form a working group to look at importing generic drugs that are expensive and/or in short supply in the U.S., she said.

Within the U.S., one ongoing question is, “Why can’t Medicare negotiate directly with pharmaceutical companies” on prescription drug prices? “Other countries do that,” another example of price controls, Engelhard said.

“An economist would tell you that if you come to the bargaining table and you’re presenting 50 million Americans, at Medicare does, one might even say it’s a monopsony,” where one buyer dominates, Engelhard said.

And if government negotiates lower prices, then all insurance groups that buy medications for their enrolled patients “would just insist on the government price,” Engelhard said.

But pharmaceutical makers say they need all the money they’re getting to do the research and development needed “for the next blockbuster drug,” Engelhard said.

The discussion also dealt with the constant drumbeat of televised drug advertisements for medications. “The only ads on television are (for) expensive drugs,” Engelhard said.

“One of the recommendations from the Trump blueprint was not to take the ads away, but post on these ads how much it costs.

“But it would be hard to (do), because nobody pays the same thing for their drugs.

“And, also, Americans are funny about prices. Sometimes, in an almost counter-intuitive way, we believe that whatever costs the most is the best.”

Eleven of the 12 latest cancer drugs cost more than $100,000 per year, Engelhard said.

The complexity of drug pricing among drug makers, insurance companies, benefits managers, drugstores, and others—with their negotiated discounts—means that “most consumers have no clue how that works.

“All they know is that the drug they bought two years ago has gone up 400 percent, and they don’t understand why,” Engelhard said. “And the answer is, because it can.

“My job was to stay completely non-partisan and to talk about, ‘Well, these are some levers that might be helpful and this is why they might be helpful.”

Comments from those who attended the session were very positive, Engelhard said.

“Part of my job was to be a referee, and part of my job was to educate, and to dispel myths that might be out there.

“If there is any maxim in health policy, it’s this: nothing is as simple as it seems.”

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Associate Professor of Public Health Sciences and Public Policy
Email Address
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Health System West Complex, Room 3897