On March 4, 2016, KEI provided comments to the US Senate Committee on Finance on a report prepared by staff for Senators Grassley and Wyden that was issued by the committee on December 2015, titled “The Price of Sovaldi and Its Impact on the U.S. Health Care System.” Senators Grassley and Wyden asked the public to comment on various issues raised in the report. The comments we filed on March 4 included three major sections.
The first provided an answer to the following question: What is the appropriate price for a drug protected by a patent or another exclusive right? The comments on drug pricing elaborated on an earlier paper in Plos, and presented a model for drug pricing that was designed to eliminate price based formulations for products, expand access, and optimize R&D objectives, including innovation for patients with rare diseases, within budget constraints. This is a short and fairly accessible version of the work in progress at KEI on a more detailed and empirically based model of drug pricing, and fills in some of the gaps KEI sees as missing in the current drug pricing discussions. Novel for the US debate of drug pricing are the use of rebates when outlays exceed budget targets.
The second topic was a short discussion of the KEI/UACT petition to the Army and the NIH to use the government’s royalty free or march-in rights on the patents on the prostate cancer drug Xtandi.
The third issue mentioned was the 2015 proposal by Senator Sanders to create a special system of government use of patented drugs for veterans health care, where compensation to patent holders is constrained by the Department of Veterans Affairs budget for providing medicine, effectively putting the monopoly rather than the veterans at risk when disputes arise over the affordability of drugs.
We also tried to point to the Senate Finance Committee in the direction of de-linkage alternatives, but only by making brief references, including to some of the work of the UN Secretary General’s High Level Panel on Access to Medicine.
We had about nine important deadlines this week, and if we had more time, we would have made a more detailed submission to the Senate in response to the important questions in the report.