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Physicians ask Senate Finance Committee to address kickbacks, other factors driving up drug costs

The AAPS recommended a number of specific solutions, including ending the safe harbor to the Medicare Anti-Kickback Statute.

Jeff Lagasse, Associate Editor

Citing unaffordable costs of common, essential drugs such as insulin, the Association of American Physicians and Surgeons provided testimony for today's Senate Finance Committee hearing on high drug prices.

The optimal strategy, the group said, is to unleash the "competitive market forces that provide abundant options and push prices down in almost every other sector of the American economy." The AAPS expressed distaste for excessive government involvement in the pharmaceutical industry.


The AAPS recommended a number of specific solutions, including ending the safe harbor to the Medicare Anti-Kickback Statute.

A safe harbor created for group purchasing organizations, the intention of which was to lower prices, was extended to pharmacy benefit managers, but the collaboration between PBMs and manufacturers can harm people such as diabetes patients, said AAPS.

As an example, the group cited lower-cost generic insulin drugs that are excluded from plan formularies, when brand name manufacturers agree to pay larger rebates to PBMs.

To address anti-competitive manufacturing tactics that can delay the introduction of generics, AAPS urged reintroduction of the Creating and Restoring Equal Access to Equivalent Samples Act of 2018, which aims to promote drug price competition by making it easier for medicines whose patents have expired to be sold as less expensive generic versions.

The group also suggested reintroduction and passage of the Direct Primary Care Enhancement Act. Independent physicians, AAPS said, are providing savings to patients with in-office dispensing of prescriptions that cut out the cost increases caused by PBMs. Reintroducing the Act, the group contended, would clarify that Health Savings Accounts can be used for these arrangements.


The Trump administration's proposal to require pharmaceutical companies to publish drug prices in TV ads is unlikely to help control medication costs, according to a recent study published in JAMA Internal Medicine.

The research found that consumer demand for high-priced drugs declined unless the drug ads included language explaining that the medication would be low-cost or no-cost because of insurance coverage or other discounts.

Because of that, price disclosures are unlikely to create the kind of competition that can drive down prices, the authors found.

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