A Patently Reasonable Approach to Addressing Pharmaceutical Prices

We seem to be at an impasse when it comes to getting the prices of prescription drugs under control for patients while at the same time fostering innovation. This need not be the case.

The left and the right have their own ideological approaches, none of which will advance given current political reality. Progress will only come in the form of bipartisan, good-government reforms that make the system more fair and predictable.

Both parties can work together to lower drug prices while protecting innovation. We can achieve this through rational approaches, including more transparency around pharmacy benefit managers; the continued streamlining of approvals for generic biologics (also known as biosimilars); and maintaining the delicate balance between incentivizing innovation while fostering lower prices through the entry of generic drugs to the market.

At the heart of most calls for lower drug prices is some form of government intervention requiring innovators to charge less for the medicine that their investments financed. Like waving a magic wand, some would like the government to simply mandate lower prices. But to think that such a move wouldn’t stifle innovation in the already expensive and risky field of drug research and development would require, well, magical thinking.

The financial driver of pharmaceutical R&D investment is the promise that if the drug receives Food and Drug Administration approval, a manufacturer will be able to market it exclusively for a period of time at the price it chooses, without generic competition. After the patent expires, generic drugs serve to reduce drug prices dramatically.

As Sen. Orrin Hatch’s remarkable career in the Senate came to a close at the end of the year, he introduced legislation, the Hatch-Waxman Integrity Act, which will protect the delicate balance created in his 1984 Hatch-Waxman Act that paved the way for a robust marketplace for generics while still protecting innovation through strong patent rights.

In 2011, when technology patent trolls were wreaking havoc in the tech world, Congress, in an effort to protect true innovators, created a patent adjudication process called inter partes review, where patents could be challenged by the Patent Trial and Appeal Board.

When creating IPR, Congress didn’t intend to upset the Hatch-Waxman apple cart. It intended to create a streamlined process to challenge technology patents, an area not governed by Hatch-Waxman.

But because IPR can also be used by drug patent challengers, the process inadvertently created a form of double jeopardy, allowing pharmaceutical patent challengers to try their hand in two separate venues: both the federal court, as well as in PTAB’s IPR. The use of both adjudication forums not only raises fairness questions, it drives up the cost of branded medicines through unnecessary legal costs and greater uncertainty about the patent life of a drug.

Since 2011, not only have pharmaceutical innovators had to defend their patent in two different venues, a scenario not intended under the delicate balance created by Hatch-Waxman, but the legal standards in each forum differ significantly. For instance, in federal court, there is a presumption that a patent is valid, whereas in IPR, there’s a presumption a patent is not valid.

The Hatch-Waxman Integrity Act introduced recently k wouldn’t synthesize standards between venues, nor would it prevent drug patent challengers from using IPR (as might have been wise to do when IPR was created). However, it would require challengers to pick their legal venue — and stick to it.

The proposal would restore the delicate balance between promoting innovation and fostering generics. As Hatch explained on Dec. 11th, this proposal is necessary to ensure “that newer, alternative procedures for challenging drug patents do not give one side an unintended advantage.”

Tweaks of this type are ideologically neutral and, as such, fail to satisfy partisans on both sides who seek to use the issue for political gain. But if the success of the original Hatch-Waxman Act is any indicator, it is just what the doctor ordered.

Jeff Stier is a senior fellow at the Consumer Choice Center.

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center. Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts. Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

Eighty-Five years since prohibition, but have we learnt anything?

This Wednesday was a special day. In the Netherlands, Dutch children celebrated the coming of Sinterklaas (along with his controversial helper Zwarte Piet). Walt Disney would have celebrated his 117th birthday. It was also world soil day, apparently. But the 5th of December 2018 also marked a particularly special anniversary: the end of prohibition in the United States. Eighty-five years ago, the Twenty First Amendment to the US Constitution was ratified, officially repealing the Eighteenth Amendment banning the sale and transportation of intoxicating liquors. After thirteen years, American citizens could at last enjoy a drink, legally.

Today, prohibition is widely regarded as a colossal failure. Driven by pressure from the Temperance Movement, who saw alcohol and the drunkenness it causes as detriments to society. Alcohol was blamed for crime, disorder, and poverty. A ban on booze, it was seemingly thought, would protect drinkers from themselves, and society from their behaviour while under-the-influence.

Of course, this wasn’t the case. Rather than eradicating the American market for booze, it simply drove the import, production, and sale of drinks into the hands of bootleggers and mafiosos.

In fact, the black market for booze during the prohibition era was so vastly profitable that some have credited the ban with creating the modern mafia. The total control over the market for alcohol provided a great incentive for gangs, such as those that came with the mass immigration from Italy in the late-1900s, to transform from small-time racketeers to firm-like, hierarchical organisations.

While these gangs certainly filled a gap with their black-market liquor and speakeasies, consumers and the rest of society undoubtedly suffered. Gangs, famously, preferred to treat friendly competition with a pair of concrete shoes than a new marketing campaign. Meanwhile, those indulging in illegal booze received no protection from the state, and no guarantee of what exactly went into their drink. While gangsters made millions, everyone else had to pay the price.

So, the eighty-five year anniversary of the death of such a disastrous attempt at social engineering undoubtedly warrants celebrating (perhaps with a drink?). But have we actually learned from the experience?

Not fully. In fact, you could read through the first half of this article, replace ‘booze’ with ‘cocaine’ or ‘cannabis’, and ‘Mafia’ with ‘Cartel’, and you’d have a pretty accurate description of the ongoing war on drugs.

Just like the Americans of the 1920s who fancied a beer, someone wanting to indulge in something harder today is left fully at the whims of organised criminals, and receives no help from the state. According to the drug policy alliance, almost 1.4 million people in the US have been arrested solely on possession charges.

Moreover, consumers of drugs today often have no guarantee that what they’re taking is actually what they paid for. While cities like Amsterdam now offer anonymous testing of substances, most people have no way if they just snorted a line of coke or laundry detergent.

Meanwhile, those selling on the black market enjoy participation in a global industry worth an estimated half a trillion dollars. While cartels and drug runners line their pockets, however, the communities around them have to deal with the violence and murder that comes whenever markets become criminal.

It’s probably wise to put in a disclaimer here: I am not advocating the use of hard drugs. Rather, I am advocating to follow the path of least harm. Just as the prohibition of alcohol created the mafia, bringing with it violence, more-dangerous products, and general suffering, the war on drugs, too, has done nothing to protect users or prevent crime; quite the opposite, in fact.

Eighty-five years ago the US government learned its lesson, and took the path of least harm. In doing so, they allowed users access to help and support and deprived criminals of their monopoly. While we’re starting to make progress, as countries like Canada, Luxembourg, as well as certain US states begin to decriminalise cannabis, there’s lots more work to be done before all the suffering brought on by the war on drugs can be ended.

Originally published at https://thebroadonline.com/eighty-five-years-since-prohibition-but-have-we-learnt-anything/

Are ‘middle men’ the culprit?

ONE NEWS NOW: “One of the real hidden costs that we’ve been seeing [in drug prices] is the role that the pharmacy benefit mangers (PBMs) play,” says Jeff Stier, senior fellow at the Consumer Choice Center. “Those are the middle men who negotiate between the drug companies – the companies that innovate, that make the drugs we so badly need – and our insurance companies.”

Having such “go-betweens” may sound like a great thing to have, but following two recent mergers, Stier says all major PBMs are now part of the health insurance industry.

That causes Stier to question whether PBMs are playing a crucial role in containing medical costs for patients. “Or, are they so conflicted – because they take a share of rebates offered by pharmaceutical companies – that they are incentivized to keep prices high?” he wonders.

But to answer that, Stier says, will require more transparency through the entire supply chain to show whether consumers are, in fact, benefiting from negotiations.

“There are changes we can do to find some common ground,” he shares, “and common ground, I think, would be necessary to actually lower the price of drugs without stifling innovation.”

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

Don’t let cities ruin the scooter revolution

In major urban centers across the globe, a handful of companies have deployed technology due to be one of the most innovative solutions to the mountains of traffic and mobility issues that plague our cities.

Electric scooters are smart mobility vehicles that offer a revolution in dealing with problems of traffic congestion and the “ last mile” problem.

As noted by innovation consultant Jeffrey Philips, electric scooters have proven to be successful where Segway, the two-wheeled self-balancing transporter first developed in 2001, failed.

They are cheap, small, emission-free, easy to use, and ubiquitous. The previous generation of Segways was a favorite tool of the 1 percent, priced high enough to lock out the average consumer, and too big to be left on busy corners.

Less than one year ago, however, that changed, as Silicon Valley entrepreneurs unveiled rentable electric scooters to disrupt the gridlock and fumes of car-congested streets.

The major players thus far are Bird, LimeBike, and Spin. The latter was purchased by Ford Motor Company earlier this month for close to $100 million.

But as with any innovation in transportation, the calls for regulation or outright bans have dampened the bright prospects scooters bring. And it’s not just the ire of Luddites.

San Francisco, where practically all electric scooter companies are based, banned all scooters from the streets in June. Only two major companies were given permits to operate again in late August. Seattle, one of the worst cities for traffic congestion, promptly banned them earlier this year, despite embracing dockless bicycles that use practically the same technology.

Similar to Uber and Lyft’s quick deployments in 2011-2012, the quick and stealthy unloading of hundreds of scooters overnight kept many cities scrambling to regulate. Cease and desist orders followed by the dozens.

Public safety, order, and taxation (not necessarily in that order) have been the key motivators for regulators. More often than not, cities claimed they weren’t asked permission.

Beverly Hills justified its swift ban due to a “concern for public safety and a lack of any advance planning and outreach by the motorized scooter companies.”

The “regulate first, innovate later” mentality will no doubt be an impediment to solving the issues that cities face across the country.

That said, problems exist. Riding at high speeds near cars and pedestrians without protection makes users susceptible to crashes and injuries. The class-action lawsuit filed in California by injured riders speaks to this. But if cities are able to accommodate bicycles, why wouldn’t they be able to do the same for electric scooters?

An oft-heard complaint is that scooter users ride on the sidewalk, ignore traffic signals, and abandon them in high-trafficked areas.

But that can be solved with smart regulation: Allow scooters to use bike lanes and park in bike areas. Provide clear guidance for riders and companies.

Bird and LimeBike require users to snap a picture when they park their scooter, ensuring it’s in a safe and legal area. Violators can be barred from the platform. That’s technology providing compliance rather than a bureaucratic rule.

When ridesharing apps such as Uber, Lyft, DriveNow, and Car2go hit the streets, detractors used similar arguments. Cities that embraced the technology, though, succeeded in removing cars off the street, reducing pollution, and offering new economic opportunities. Low-income communities saw a huge benefit.

Too often, studies on the effects of ridesharing examine what they aim to disrupt: single-car commuters, public transportation, and taxis. Rather than asking whether they affect specific industries, we should ask whether they are helping society at large. And by any objective measure, they are.

Most importantly, the new innovations on our streets are solving what civil and urban planners call the “ last mile” problem, the gap between where one mode of transportation leaves us and our final destination.

More often than not, the innovations that will solve problems in various strata of society will be the initiatives of private entrepreneurs and inventors. If cities want to embrace that positive change, they should pass reasonable and smart regulation on electric scooters.

Yaël Ossowski is a writer, consumer advocate, and deputy director at the Consumer Choice Center.

Originally published at https://www.washingtonexaminer.com/opinion/dont-let-cities-ruin-the-scooter-revolution

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

Both parties can work together to lower drug prices

Healthcare was a key issue for voters in the split-decision midterm elections. So are we in for more partisan divide and no progress? Not necessarily. We simply need to reframe the debate to find common ground.

The Democrat-controlled House won’t consider Obamacare repeal, and the Republican Senate won’t consider Medicare for all. But there are ways to make constructive changes without relying on ideologically charged policies which can’t advance in this environment.

There’s widespread agreement that patients should pay less for prescription drugs. Even as innovative drugs prevent or slow the progression of disease and reduce expenses such as hospital costs, patients and politicians alike are clamoring for lower drug prices.

Many on the Left seek to wave a magic wand and lower prices through government intervention with little regard to how this would discourage life-saving and money-saving innovation. Last month, even the Trump administration proposed dusting off an old and innovation-killing approach which would base some prices paid by Medicare on what other countries pay.

Meanwhile, legislators on the Right who ignore the prices their constituents pay for drugs risk losing their own congressional healthcare plan after their next election. Yet addressing the issue doesn’t require abandoning principles.

While there’s no one magic bullet that would make prescription drugs more affordable for patients, there has been increased scrutiny of the role of middle men known as pharmacy benefit managers. PBMs themselves have rapidly evolving incentives. No longer are they simply independent price-negotiators. Following two recent mergers, all major PBMs are now part of the health insurance industry.

J.C. Scott, the new president of the Pharmaceutical Care Management Association, the PBM industry’s trade group, recently told Politico’s Prescription Pulse that his top priority was simply making sure that people understand what pharmacy benefit managers do.

So what do they do? When PBMs negotiate on behalf of insurance companies, are they playing a crucial role in containing medical costs for patients? Or are they so conflicted, because they take a share of rebates offered by pharmaceutical companies, that they are incentivized to keep prices high?

To know, we’ll need more transparency through the entire supply chain, to show whether consumers are in fact benefiting from PBM’s negotiations.

Lawmakers across the country have begun addressing the lack of transparency around PBMs and its effects on patients. Sens. Elizabeth Warren, D-Mass, and Tina Smith, D-Minn., sent lettersto nine PBMs to determine how they are approaching drug pricing rebates. This probe is accompanying more than 90 bills nationwide that are focused on PBMs and their opaque role in the drug supply chain.

Time will tell if patients will actually see the savings that PBMs supposedly generate. The three largest PBMs, all linked to insurers, collectively control nearly 80 percent of the market, meaning that millions of Americans are affected by the decisions they make in negotiating prices for various drugs. Will pharmaceutical price-reductions lead to lower prices for patients? We’ll need transparency from PBMs and health insurers to understand how a reduction in what pharmaceutical companies charge for a drug translates into lower costs for patients at the pharmacy.

PBMs’ defenders maintain that drug prices would be even higher without their role as go-betweens. The recent dramatic price cuts for some drugs put that idea to the test. PBMs can prove their value — or lack thereof — by moving quickly to pass these price reductions along to patients.

Surely, drug companies seeking to remove the targets from their backs in exchange for lowering drug prices will be watching the PBMs’ next moves very closely. So should consumers.

Jeff Stier is a senior fellow at the Consumer Choice Center

Originally published at https://www.washingtonexaminer.com/opinion/op-eds/both-parties-can-work-together-to-lower-drug-prices

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

Menthol ban will make a bad situation worse

The Food and Drug Administration’s naive plan to ban menthol cigarettes will lead to countless unintended consequences, including increased youth smoking, especially in minority communities, where a ban would spark illegal markets reminiscent of the days of alcohol prohibition.

Kids could easily buy loose cigarettes stored in sealed baggies with unwrapped menthol cough drops. The FDA has failed to enforce its own rules. Consider the agency’s inability to prevent youth use of e-cigarettes, despite an outright federal ban.

One unintended consequence is telling: The ban unites some African-American civil rights leaders and top law enforcement officer groups.

The Rev. Al Sharpton and Ben Chavis, former executive director of the NAACP, harshly criticized the idea last year, claiming that it would “affect black communities more than other communities” and keep police from “solving violent crime and ensuring public safety.”

OUR VIEW: There’s more than just smoke to FDA proposals

Citing a National Research Council report on America’s criminal justice system, they blame policy, not increased crime, for the incarceration crisis. A menthol ban would make a bad situation worse.

The Alabama State Trooper Association, the Organization of Black Law Enforcement Executives and other police groups have warned that a ban would create criminal enterprises.

It would also be ineffective. Jeff Washington, a 52-year-old who started smoking menthol Newports when he joined the Army in 1983, told The Wall Street Journal that if menthols were banned, “I’d start smoking Marlboros.”

Rather, Washington should use e-cigarettes. But the FDA, which failed to prevent youth from buying e-cigarettes, is making it harder for him to switch.

President Donald Trump should ask FDA Commissioner Scott Gottlieb, in an exit interview, why the agency couldn’t achieve a central promise of his presidency: Improve our lives not with more regulation but with less of it, wisely implemented.

Jeff Stier is a senior fellow at the Consumer Choice Center.

Originally published at https://eu.usatoday.com/story/opinion/2018/11/15/menthol-ban-makes-bad-situation-worse-editorials-debates/2018265002/

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

FDA宣佈對電子煙銷售實施全面新規定

DAILY NEWS SINA: 爲此,美國消費者選擇中心(Consumer Choice Center)高級研究員傑夫·斯蒂爾(Jeff Stier)曾批評稱:“如果FDA不能通過一項嚴厲的監管計劃來實現監管和保護兩個目標,川普總統則應該意識到,FDA目前的領導層沒有能力執行政府的政策議程。”

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

FDA Wants To Ban Menthol Cigarettes, Restrict Sales Of E-Cigs

MEDIA POST: Jeff Stier, a senior fellow at the Consumer Choice Center, calls the proposed menthol ban “naive” in an op-ed for USA Today. Stier, who is billed as “a voice for consumers who believe paternalists don’t have a monopoly on public health,” says an outright ban will not only be “ineffective” but also will lead to “countless unintended consequences, including increased youth smoking, especially in minority communities.”

Stier writes: “Kids could easily buy loose cigarettes stored in sealed baggies with unwrapped menthol cough drops.”

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

FDA宣布:全面管制电子烟销售

THE CHINA PRESS:   为此,美国消费者选择中心(Consumer Choice Center)高级研究员杰夫·斯蒂尔(Jeff Stier)曾批评称:“如果FDA不能通过一项严厉的监管计划来实现监管和保护两个目标,特朗普总统则应该意识到,FDA目前的领导层没有能力执行政府的政策议程。”

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

Minnesota anti-smoking advocates applaud FDA pledge to crack down on flavored tobacco products

STAR TRIBUNE: Gottlieb, in pursuing his tobacco strategy, is taking some flak from fellow conservatives. “The administration promised less regulation — without sacrificing protections,” said Jeff Stier, a senior fellow at the Consumer Choice Center.

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.