New Report by Rep. Katie Porter Exposes Big Pharma's Launch Price Abuse

[quaint]

LiberalOC November 2, 2022

“Our report is clear: the prices Big Pharma sets for new cures show that these companies think of cancer more like a business opportunity than a life-threatening disease,” said Porter, a longtime consumer protection attorney. “For Congress to maximize the Inflation Reduction Act’s protections for patients and taxpayers, we must double down on fighting corporate abuse in drug pricing. Our office’s new report lays a framework for future reforms to address another major driver of high pharmaceutical costs: increasing launch prices for new drugs.”

Using the example of cancer drugs, Congresswoman Porter’s report found that:

• Cancer drug launch prices are soaring. From 2017 to 2021, the average inflation-adjusted launch price for self-administered cancer drugs—the types of medications typically prescribed under Medicare Part D—have risen by over 25% to over $235,000 per year. When this analysis is expanded to include certain other cancer drugs, like those administered as infusions, the data show that the average launch price increased by 53% to $283,000 per year.

• High launch prices disproportionately harm seniors, the uninsured, and the underinsured. Analyzing Medicare spending data, Congresswoman Porter’s report reveals that soaring launch prices push up taxpayer spending for high-priced cancer medications, which cost taxpayers millions of dollars and disproportionately harm patients who are uninsured, underinsured, or on Medicare.

• Addressing soaring drug launch prices will maximize the Inflation Reduction Act’s patient protections and taxpayer savings. Congresswoman Porter’s report demonstrates how the IRA will help patients afford the drugs they need, showing how the law’s out-of-pocket spending cap could save certain cancer patients more than $10,000 per year on high-priced drugs. As the Biden Administration implements this transformative legislation to protect patients and taxpayers from Big Pharma’s greed, Porter’s report calls for additional action to maximize the law’s benefits and address the next frontier of skyrocketing drug pricing—launch prices.

Congresswoman Porter has tirelessly fought to hold Big Pharma accountable on behalf of patients. A version of her proposal to hold Big Pharma accountable for unreasonable price hikes became law as part of the Inflation Reduction Act. As a member of the Oversight Committee, she has confronted Big Pharma CEOs directly about the skyrocketing costs of prescription drugs. Porter has called for investigations into industry influence over drug approvals, including for high-priced drugs brought to market under the accelerated approval pathway.

Love Katie

[jimfields33]

1. So the IRA didn't start yet?

I’m not sure why the companies aren’t following the new rules. Did they find a loophole?

[quaint]

2. Some things are effective in 2024.

I haven't read the entire IRA, so I don't have information on launch price limitation. Do you have a link? This is what I found:
Effect of the Inflation-Rebate and Negotiation Provisions on Launch Prices

The Congressional Budget Office projects that the inflation-rebate and
negotiation provisions would increase the launch prices for drugs that are
not yet on the market relative to what such prices would be otherwise. That
effect would primarily be driven by the inflation-rebate provisions (sections
129101 and 129102), which would begin to apply to prices within 12
months of a given drug’s entering the market. Under those provisions,
manufacturers would have an incentive to launch new drugs at a higher
price to offset slower growth in prices over time. The negotiation provision
(section 129001) would have less of an impact on launch prices, CBO
expects: Although the ceiling for a drug’s negotiated price is based on its
price from a prior year, negotiation could not occur until drugs were on the
market for a number of years—at least 7 for small-molecule drugs and 11
for biologics.

Higher launch prices would primarily affect spending for drugs in the
Medicaid program, CBO projects, because an increase in that program’s
basic rebate brought about by the higher launch prices would only partly
offset those prices.4 Higher launch prices would also tend to affect
spending for drugs covered by Part B of the Medicare program because that
program’s payments for those drugs are based on the average sales prices.
Over time, slower price growth would attenuate the effect of higher launch
prices.

In the commercial and Medicare Part D segments of the market, spending
would be less affected by higher launch prices, CBO estimates, because
manufacturers would have more flexibility to manage rebates to maximize
their revenues in those sectors.

[Jirel]

3. Why do people insist on using the phrase "big pharma?"

They don’t say “big auto,” or “big electricity.” That’s because there are no small, mom ‘n pop car companies, electrical generators, coal producers, iron smelters, or pharmaceutical companies, etc. Even pharma startups are pretty big, and certainly require big funding, and may be producing some of the most astronomically expensive drugs if they ever get to market. The only companies that love to keep the word in use are the non-legitimate pharma companies, the supplement peddlers (often also large, massively overpriced, and making dubious claims for poorly controlled products), or the outright snake-oil peddlers. It’s time to stop using terminology that only serves as a marketing gimmick for companies that keep people sick, or even make them sick.

[quaint]

4. If I controlled the world, many things would be different,

Google says because it's international, or means the biggest four, or maybe the top 50.

[Doc Sportello]

7. It's not a marketing gimmick

It's an apt description of an industry that makes huge profits that go to a few BIG companies. In the most profitable areas of an economy a few big companies usually dominate the market (for example, oil which is often called big oil) and that divide up the marketplace, have huge lobbying efforts and rake in high profits.

The supplement industry is mostly bullshit but that doesn't change the point of this thread which is the true fact that taxpayers through universities are funding much of the cost of this research while big pharma gets the lion's share of the rewards. I worked at a university where one of the biggest drug companies did research. With upper level students doing much of the work for little above minimum wage and companies providing grants that didn't cover anywhere near the cost, it was a sweetheart deal for that company.

[quaint]

8. TY

[Doc Sportello]

9. Thank you for the OP

I think most people think big companies have large research programs like Bell Labs did many years ago. The truth is these companies found out it is much cheaper to give grants that sometimes total in the hundreds of thousands of dollars over several years while well-trained upper level or grad students do most of the work for low wages, parents and loans pay most of their way through school, universities provide the facilities, and the big companies walk away with new products they make tens of millions or billions on those products.

It's not just pharma either. One group I worked with developed the technology used in most cell phone cameras and another developed technology used to prevent hot electron damage in small computers like those used in cell phones. The latter had to sue one giant company in order to get some compensation, which they agreed to - after about two decades.

[quaint]

10. As often the case, the system rewards the wrong parties.

Again, thank you.

[Auggie]

5. Pricing strategy to pay for research and development ...

among other things (shareholder dividend, mainly).

In my little kingdom pharmaceuticals are developed and distributed by the government and priced only to cover costs.

[quaint]

6. Ooh, are there any vacancies in your kingdom?

[IcyPeas]

11. I've seen an ad here in SoCal against Katie Porter

wonder if its big pharma who are paying for it. (can't find it or I'd post it)