PhRMA Address – Legislative and Pipeline Report for 2024
James Stansel, Executive Vice President, General Counsel and Corporate Secretary, PhRMA
“Science has never been more promising,” said James Stansel, Executive Vice President, General Counsel and Corporate Secretary at PhRMA, at the 2024 Pharmaceutical Compliance Congress in April in Virginia.
Stansel said the U.S. ecosystem is “the envy of the world” due to its funding, research and development, clinical trials, and marketing, which enables the industry to work miracles.
“We need to defend that ecosystem, and that’s really what pharma’s primary responsibility is so that we can continue to bring lifesaving drugs to the marketplace,” he said.
There are a few fundamentals that counteract the good work that is being done, according to Stansel. He highlighted five main points: price setting, importation, March In, IP waivers (TRIPS), and CMS restrictions on Alzheimer’s drug coverage.
Stansel said no matter what happens within the current administration, there will always be ongoing challenges for the industry. He highlighted potential impacts from future administrations in the upcoming election.
Biden Administration
In a discussion about IP waivers and March In, Stansel explained that the Biden administration has proposed a framework that would consider price when deciding whether to grant March In. This is under a law called the Bayh-Dole Act, passed in 1980, that created a uniformed framework that allows valuable research from research institutes and universities to find a route to established firms.
The Biden administration is proposing to reverse the reason that this act was passed in the first place. Stansel said that this is not just affecting the pharmaceutical industry, but there is opposition across sectors and from political parties.
IRA Consequences for Patients and Compliance
There are significant consequences of the Inflation Reduction Act (IRA), according to Stansel. The two positive changes he focused on from the IRA for patients were the $2,000 annual out-of-pocket cap in “Part D” and provisions that allow medicinal costs to be spread over the course of a year.
There are also negative aspects to IRA changes, he said. Companies are pushing back on government negotiations.
The law tends to suppress innovation, and it does so in an uneven way, he said.
Stansel discussed what is known as the “Pill Penalty,” which refers to the difference in the amount of time that a product will be on the market before it’s subject to this price control system which is different for a small molecule and a large molecule. He said that the incentive is to switch away from pills and go toward biologics, “but that’s not where science would direct us.”
Additionally, the IRA artificially puts in place incentives that shifts capital away from one and into another. This, he said, “results in an inefficient system for patients and a reduction in the types of products that would otherwise be brought to market.”
Stansel said there has been pushback through patient groups trying to educate the media and the public about the problems with this law. There have also been challenges made in court.
Patient Affordability Concerns
Stansel shifted the discussion to a critical question: What do Americans care about in the 2024 election? He said that basic economy and cost of living are the issues that are of concern and of a lesser concern is prescription drug prices.
He stated that the IRA won’t stop PBMs (pharmacy benefit managers) and insurers from forcing patients to pay high out-of-pocket costs. Some would assume that patient out-of-pocket costs would be going down, but this is not the case. This is due to benefit design, insurance benefit design, and how PBMs work, he noted.
An underlying issue within the industry is patients’ inability to access their medications. Stansel said that progress is being made. Now in congress there are a dozen bills that would direct various transparency and protections, delinking the list price from the fees that pharmacy benefit managers get paid and requiring that savings get shared with the ultimate patient.
Further, Stansel discussed the 340B drug pricing program has grown exponentially over the past couple of years through both hospital and contract pharmacy participation. He believes in pushing back against state mandates and shaping federal 340B reforms.
Stansel closed his talk by addressing the launch of the U.S Consensus Framework for Ethical Collaboration. This framework is on an international scale and is not just for the pharmaceutical industry but for the entire healthcare sector.