GPhA Response to September 2, 2016 Clinton Campaign Position Paper on Drug Pricing

PRESS RELEASE

WASHINGTON, DC (Sept. 2, 2016) — The Generic Pharmaceutical Associations (GPhA) shares Secretary Clinton’s desire to make medicines affordable and accessible. In an emotionally charged environment, it is essential that decision makers consider objective data and authoritative analysis to drive any policies that affect our nation’s patients and healthcare system.

Earlier this year, the Department of Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE) released a comprehensive report, Understanding Recent Trends in Generic Drug Prices, and found that the generic drug market is “quite competitive” and that any price increases in that market are “sufficiently limited so they exert no sizable influence on overall drug spending.” Most notably, the ASPE report stated, “Our review of evidence strongly supports the conclusion that generic drug prices are not an important part of the drug cost problem facing the nation.” The report also found that “about two-thirds of generic products appear to have experienced price declines in 2014.”

An analysis published just yesterday in the Wall Street Journal conclusively illustrates that while branded prescription drug prices are increasing, generic drug prices experience the opposite phenomenon, deflation.

Secretary Clinton’s campaign’s proposal references a very recent study on drug pricing published in the Journal of the American Medical Association (JAMA), “Between 2008 and 2015, drug makers increased the prices of almost 400 generic drugs by over 1,000 percent.” It is important to note that somehow missing from that citation is the caveat that those drugs only represent approximately 2% of the sample investigated in the referenced study. We do recognize there are “outlier” price fluctuations. However, it is also important to recognize that the data overwhelmingly prove that the generics industry is responsible for making medicines affordable and accessible for Americans.

Still, more can be done to improve the current system and ensure even greater access and affordability.

That is why GPhA is committed to working with candidates and lawmakers from both parties, as well as industry and patient groups to create a framework to bring greater savings and affordable medicines to our country. The foundation of that framework — and this is something that we have heard consistently from all of these stakeholders - is greater competition.

While Secretary Clinton in her concept paper has some proposals that will produce a more competitive environment for pharmaceuticals, there are others, including her call for penalties, price caps and greater government controls, which are antithetical to encouraging a well-performing competitive market. Unfortunately, this is a trend that is becoming more and more common as policymakers neglect important differences between the brand and generic markets, which just last year led to harmful new price controls being placed on generics in the Medicaid program which were originally designed to control the types of monopolies that only exist in the brand market.

As policymakers evaluate their options, it is important to ensure that any proposals not have a chilling effect on competition and the need to spur even greater numbers of generics entering the market - which brings down prices while simultaneously ensuring even greater access.

The generics industry, which accounts for 88% of the prescriptions in the U.S. but only 28% of our drug costs, produces hundreds of billions in annual savings for our healthcare system, ensuring access to safe, effective and affordable medicines to millions who would otherwise go without. This is a foundation to build upon — not to inhibit or put at risk. GPhA is committed to providing the campaigns and Congress with specific constructive solutions in the coming days and weeks that produce even greater affordability and savings for our nation’s patients and healthcare economy.