Drug Pricing in America, Part 2

We provided written comments to Part 1 of this hearing.  They lead some interesting questions that we would like you to ask the pharmaceutical company witnesses. Our guess is that some may already be on the agenda for Tuesday's hearing.

1. How would your company respond to the enactment of Medicare for All, which makes Medicare services available to an ever expanding age cohort of patients at Medicaid prices with the difference financed with higher payroll or employer paid consumption taxes?

2. If employers could avoid a portion of their consumption taxes by providing direct care and medication directly to employees, how would you respond. How do you currently adjust your price structures for large self-insured employers?

3. The Center for Fiscal Equity proposed the following scenario on intellectual property issues for both orphan drugs and large market drugs originally developed using governmentally sponsored research: 

Have every drug approval disclose all government supported research used to develop the product, giving the sponsoring agency the right to both share in the profits and have a say in the pricing. This both keeps the research dollars flowing and limits cost.

A main problem with high cost drugs, especially orphan drugs, is the high development costs and the cost of small batch manufacturing. This could drive the need to raise drug prices for mature drugs in order to subsidize the orphans, although some hikes are undertaken because no one can stop them. 

The solution for this is for NIH and the FDA to own the rights to orphan drugs and to contract out research and development costs as it does basic research, as well as testing and production.

PhARMA would still make reasonable profit, but the government would eat the risk and sometimes reap the rewards. HIH/FDA might even break even in the long term, especially if large volume drugs which were developed with government grants must pay back a share of basic research costs and the attached profits, as well as regulatory cost.

Please respond to this scenario.

We hope you find these questions useful for Tuesday's hearing.