Increased competition, lower costs: A prescription to address medications PRICED out of reach

One quarter of Americans taking prescription drugs say they have been unable to afford the medication they need in the last 12 months. Thirty four million people know at least one friend or family member in the last five years who died because they could not afford the medication to treat their condition.

The most expensive drugs, sometimes costing tens or even hundreds of thousands of dollars, are a class of pharmaceuticals called biologics. Biologics are drugs made from living organisms, and they include treatments for diabetes, rheumatoid arthritis, and Crohn’s disease. While biologics represent only 2 percent of U.S. prescriptions, they have contributed to 93 percent of the net growth in drug costs since 2014, in large part due to the lack of competition.

The companies that develop these blockbuster drugs have devised a method to maintain monopoly control over their production and sales through “exclusivity periods,” a duration of time during which they are the only company allowed to produce the medications. In the United States, that period free from competition is 12 years, while it is just five years for other types of drugs.

While it is impossible to object to the development of life enhancing and lifesaving drugs, we have not addressed the enormous costs that have put those drugs out of reach for many—and often most—ordinary patients. Though drugs companies need to make a profit, many critics of their sky-high drug costs, including President Trump, have called their actions “price gouging.”

Big Pharma wasn’t satisfied with its 12 years of competition-free pricing in the United States and tried to extend their monopoly control throughout the hemisphere by enshrining 10 years of patent exclusivity into the U.S.-Mexico-Canada trade agreement (USMCA). The Trump administration would have locked in higher pharmaceutical prices and prevented all three trading partners from lowering their exclusivity periods to allow lower cost, biosimilar medication to enter the marketplace more quickly.

That’s when Congress stepped in. An eight-person working group of Democrats appointed by Speaker Nancy Pelosi (D-Calif.) went to work, crafting a much better deal for patients and workers across North America. As a member of the working group assigned to lead negotiations on pharmaceutical section of the agreement, Congresswoman Schakowsky told United States Trade Representative Robert Lighthizer that the biologics exclusivity protections would need to be removed entirely.

Other House Democrats weighed in, and we led a July 2019 letter signed by over 100 other members of Congress that called for this anti-competitive, money-grab to be taken out. In the final agreement those provisions were gone.

Now, the House must take on Big Pharma’s current 12-year monopoly protection here at home through bipartisan legislation. Last June, Schakowsky and Rep. Bruce Westerman (R-Ark.) introduced the PRICED (Price Relief, Innovation, and Competition for Essential Drugs) Act, H.R. 3379. Krishnamoorthi is an original co-sponsor. The bill would make prescription drugs more affordable and accessible by reducing the exclusivity period for biologics from 12 to five years, the same as for all other medications. This change will make room for lower cost generics and result in savings of billions of dollars.

Big Pharma has told us again and again that biologics are especially costly to develop and manufacture because of time and complexity. They have demanded unique protections to supposedly recoup their investments. But we know that those claims are just another price gouging tool that have resulted in billions upon billions of profits as Americans struggle to afford drugs they need to survive. Many recent peer-reviewed studies suggest that biologics are not as time-consuming to develop as initially believed. A June 2019 study in Nature that concluded “although biologics are often thought to be more time-consuming to develop than small-molecule drugs, development times for biologics are similar to, or possibly somewhat shorter than, for small-molecule drugs.”

In 2020, we look forward to working with a robust group of advocacy, labor, and industry stakeholders that have endorsed the PRICED Act to pass this bill through the House and enact it into law. While it is imperative that we continue to foster research and development in medicine and in the creation of new medications, we cannot put profits over people. We cannot forget the importance of balancing the incentive for innovation with the ability of consumers to afford them. Through increasing competition in the biologics market, the PRICED Act will lower prescription drug prices across the country. With so many families already struggling to pay for their medications, it’s a piece of legislation our country can’t afford to ignore.

Schakowsky represents the 9th District of Illinois and is chairwoman of the Energy and Commerce Consumer Protection and Commerce Subcommittee. Krishnamoorthi represents the 8th District of Illinois and is chairman of the House Reform and Oversight Subcommittee on Economic and Consumer Policy.