Transparency in the Biopharmaceutical Market Diane Rowland Executive Vice President, Kaiser Family Foundation @dr_dianerowland Presented: June 24, 2018
Lack of Transparency in the Biopharmaceutical Market Many players in the biopharmaceutical market Disclosure of financial flows between players not required → dearth of information on financial flows and margins Resulting opacity allows players to deflect blame to one another for high cost of prescription drugs Widespread disagreement on actual costs underlying biopharmaceutical research and development and impact on pricing
The Biopharmaceutical Market Involves Many Players
NASEM Recommendation ASSURE GREATER TRANSPARENCY OF FINANCIAL FLOWS AND PROFIT MARGINS IN BIOPHARMACEUTICAL SUPPLY CHAIN Require drug companies and insurers to disclose net prices received and paid, including discounts/rebates each quarter Require annual submission by drug companies of list price, rebates and discounts to payers, and average net price of each drug sold in the U.S. Expand disclosure requirements on income by entities in biopharmaceutical sector exempt from income taxes Information to be publicly available and provided to Congress
Prospects for Improving Drug Pricing Transparency Multiple states have passed laws in the past few years to improve drug pricing transparency. “American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of- Pocket Costs” released in May 2018 calls for: • “HHS may…[c]all on the FDA to evaluate the inclusion of list prices in direct -to-consumer advertising.” • “HHS may…[d] irect CMS to make Medicare and Medicaid prices more transparent, hold drug makers accountable for their price increases, highlight drugs that have not taken increases, and recognize when competition is working with an updated drug pricing dashboard.”
Remaining Questions for Researchers to Address What are actual costs underlying biopharmaceutical research and development? What do economic models tell us about the advantages of opacity when negotiating rebates from the point of view of the PBM and from the manufacturer? Will greater transparency harm or benefit consumers?
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