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Bloomberg's Rye on Drug Price Battle Shifting to States (Audio) · Bloomberg Intelligence

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  Speaker 1: thank you very much. Bill Maloney in to hear live
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  Speaker 1: Bloomberg business flash. You're listening to taking stock with pin
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  Speaker 1: Box and Jatholene Hays on Bloomberg Radio. Spending for prescription
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  Speaker 1: drugs continues to rise. What does this mean for the
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  Speaker 1: federal government and for Medicare and Medicaid. Brian Ryes, Senior
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  Speaker 1: Healthcare Policy and a list for Bloomberg Intelligence, his government team,
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  Speaker 1: and he joins us now from Washington, d C. Home
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  Speaker 1: to Bloomberg one and to one oh five point seven
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  Speaker 1: h D two. Brian, thanks for being with us. Just
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  Speaker 1: outline exactly the battle over the rising cost of brand
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  Speaker 1: name drugs. Well, certainly both Hillary Clinton and Bernie Sanders
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  Speaker 1: and several other Democrats have made it a hot topic
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  Speaker 1: of this campaign season. And the issue is they want
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  Speaker 1: the government to have greater authority to help negotiate and
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  Speaker 1: influence the cost of prescription drugs in the US. And
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  Speaker 1: it's been frustrating at the federal level because Republicans control
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  Speaker 1: Congress and they really haven't wanted to pursue that that
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  Speaker 1: that avenue. And so what we've seen is an increasing
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  Speaker 1: level of interest at the state level, where states are
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  Speaker 1: essentially saying, well, if nothing's gonna happen in Washington, we're
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  Speaker 1: gonna try and take matters into our own hands. And
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  Speaker 1: one potential issue coming up this this November on the
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  Speaker 1: ballot is is in California, where Proposition sixty one aims
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  Speaker 1: to try and address that problem. Tell us a little
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  Speaker 1: bit more about what that proposition would do and how
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  Speaker 1: does it dovetail, compliment or maybe even be a cross purposes.
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  Speaker 1: What's with what is on the books the federal level? Sure, Um, well,
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  Speaker 1: the proposition essentially says that you know, any state agency
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  Speaker 1: within California their medicaid program, for example, medical and other agencies,
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  Speaker 1: you know, whatever price they pay for for their drugs
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  Speaker 1: could be no higher than what the Department of Veterans
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  Speaker 1: Affairs pace. And why is that important? Well, the v
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  Speaker 1: A is actually able to negotiate drug prices themselves, something
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  Speaker 1: that the government can't do with the Medicare prescription drug program.
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  Speaker 1: And that's a key difference. Now, why does it sounds
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  Speaker 1: simple enough? Why does it? Why isn't that a good deal?
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  Speaker 1: What's the catch? The potential catches that you're able to
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  Speaker 1: get those lower prices by essentially being able to exclude
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  Speaker 1: drugs from those formularias. And so the response from the
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  Speaker 1: industry is like, well, you can have lower prices, but
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  Speaker 1: then you won't have access to a lot of especially
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  Speaker 1: the newer innovative drugs that are coming on the market.
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  Speaker 1: And so that's the battle that's going to play out
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  Speaker 1: between the two sides heading up to November. A couple
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  Speaker 1: of data points taking a look at prescription drugs, understand
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  Speaker 1: that heyers and the government programs as well as the
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  Speaker 1: private sector, spent a combined three hundred and ten billion
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  Speaker 1: dollars last year on prescription medicines. Does that that sound right? Right? It? Does?
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  Speaker 1: You know? It's you know Medicare Medica and Medicare is
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  Speaker 1: about half fab between the Part D and the Part
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  Speaker 1: B programs for the various drugs if they cover. Uh,
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  Speaker 1: it's a growing part of the healthcare system. But frankly,
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  Speaker 1: you know, everything is a growing part of the health
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  Speaker 1: care system. Uh. These days of growth, growth picks back
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  Speaker 1: up in hospital spending in other areas. But certainly you've
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  Speaker 1: seen a lot of new drugs come on the market
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  Speaker 1: in the hepatitis C space, and a lot of the
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  Speaker 1: controversy that Democrats have pounced on has had to do
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  Speaker 1: with some older drugs where there's really no generic competitor.
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  Speaker 1: The drugs been acquired and he's seeing price bikes and
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  Speaker 1: does as well. Well, you know, you have noted a
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  Speaker 1: the outset that it's been tough for those who want
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  Speaker 1: to change the system as it is to make progress
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  Speaker 1: at the federal level. And you know, the pharmaceutical biotech
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  Speaker 1: manufacturers have largely dodged more direct involvement from the Feds
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  Speaker 1: in d C. Do you can you talk to us
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  Speaker 1: anything about lobbying about to what extent this is just
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  Speaker 1: the result of of of you know, lobbyists with deep
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  Speaker 1: pockets who have been you know, backing some of the
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  Speaker 1: Republicans who have stood in the way of this, well, certainly,
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  Speaker 1: you know it's in their interest to to not have
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  Speaker 1: the government um involved in these negotiations. I would say
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  Speaker 1: it's also something that the health insurers who are on
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  Speaker 1: the other side the negotiating table, frankly, they won't They
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  Speaker 1: don't want the government involved in their either. They believe
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  Speaker 1: they can get better deals for their customers than if
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  Speaker 1: the large central UH federal government were involved in that process.
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  Speaker 1: But you're right, you know, this goes back to when
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  Speaker 1: the Medicare prescription drug program, the part DEEP program was
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  Speaker 1: created back in two thousand and three. It specifically prohibits
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  Speaker 1: the government from interfering in those negotiations between drug makers
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  Speaker 1: and insurers, and so that means an Act of Congress
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  Speaker 1: is required to change that. This isn't something that the president,
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  Speaker 1: whether President Obama or potentially a President Clinton, could change
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  Speaker 1: on their own. And again, since Republicans control right now
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  Speaker 1: at least both a House and the Senate, that's been
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  Speaker 1: a pretty effective someone block to get anything done. As
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  Speaker 1: far as the actual cost to individuals, UH, the average
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  Speaker 1: patients out of pocket cost has gone up more than
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  Speaker 1: since to about forty four dollars per prescription for generic drugs,
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  Speaker 1: of course it's remained about eight percent. Is there a
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  Speaker 1: reason why we're seeing this pick up in branded prescriptions?
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  Speaker 1: Is that is that because as you describe, there are
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  Speaker 1: these new formulations. Yeah, you know, there's been a lot
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  Speaker 1: of newer innovative drugs that have come on the market
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  Speaker 1: for a number of diseases where they're there in the
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  Speaker 1: cancer space or hepatitis space for example. And you know,
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  Speaker 1: the brand name manufacturers certainly are happy to to give
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  Speaker 1: give out coupons other things to incentivize their patients not
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  Speaker 1: to use the gineered versions if one exists, um and
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  Speaker 1: so that that's been an effective way for them to
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  Speaker 1: to avoid that. And again, if some of these newer drugs,
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  Speaker 1: if they if they are in fact new, then it's
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  Speaker 1: not quite time for a gineer competitor to come on
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  Speaker 1: because the patents haven't expired. Brian right, what an interesting development.
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  Speaker 1: He can't make progress at the federal level changing some
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  Speaker 1: parts of medicare and drug pricing, We'll go to the states,
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  Speaker 1: California leading the way there, Keith, Brian right, thank you
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  Speaker 1: so much for joining us today. Seeing your healthcare policy
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