Build patient access by strengthening innovation, BIO tells senators

BIO’s response to a request for information from the Drug Price Working Group explains why price setting won’t work.

Improving patient access to new treatments requires policy that supports America’s innovation ecosystem—not price setting that discourages investment, BIO tells a Senate working group.

Written comments by the Biotechnology Innovation Organization (BIO) advise against importing foreign pricing or increasing government setting of prescription drug prices.

Instead, BIO recommends reducing patient out-of-pocket costs, through measures like pharmacy benefit manager (PBM) reform, as well as policy to encourage investment in innovation and address aggressive biotech competition from China.

BIO’s 46-page policy analysis is a response to a “Request for Information: Commonsense Policy Options to Lower Drug Prices for Patients,” issued by the Drug Price Working Group led by Senate Finance Committee Ranking Member Ron Wyden (D-OR) with Sens. Catherine Cortez Masto (D-NV), Peter Welch (D-VT), Ruben Gallego (D-AZ), Mark Kelley (D-AZ), Tammy Baldwin (D-WI), Maggie Hassan (D-NH), Jeff Merkley (D-OR), Chris Van Hollen (D-MD), Tammy Duckworth (D-IL), and Richard Blumenthal (D-CT).

The goal of the RFI is to provide detail that can shape proposals from the Democratic working group.

“Sustaining America’s world-leading biotechnology pipeline will require policymakers to ensure that policies intended to improve affordability strengthen, rather than weaken, the ecosystem that makes continued innovation possible,” BIO’s Aug. 17 comments say.

BIO addresses various areas for action suggested by the Working Group’s RFI.

Price setting

The current drug-price negotiation program (DPNP), which will set prices on 100 drugs within the next five years, is already a drag on investment, and there is no need to increase its reach, BIO says. In particular, proposals to use international reference pricing ignore the realities of the U.S. market, which provides quicker and more robust access to medicines, the comments note.

To ensure investment in needed innovation, it is recommended that certain protections from DPNP are added or extended. Biologics and small molecule drugs should both have 13 years of protection from the DPNP, and there should be additional exemptions to promote development of orphan drugs for rare diseases, BIO says. Furthermore, the IRA Small Biotech Exception should not be allowed to expire in 2028:

“Protections for small biotech companies from the DPNP should be extended to support small and emerging companies that drive early-stage innovation,” say BIO’s comments. 

Across the more than 2,000 biotech companies in the U.S., approximately 300 are publicly listed, and most are small or mid-sized companies, according to a BIO fact sheet. Today, these small and mid-sized companies account for 71% of the industry’s total employment, originate 49% of all new drugs launched globally, and account for 54% of Food and Drug Administration (FDA) filings. 

BIO’s comments to the RFI also recommend policies to enable value-based pricing: “A holistic consideration of a treatment’s value to patients, families, and society should be the overarching principle when developing policies to provide sustainable access to novel, innovative, and transformative therapies.”

Increasing patient access

BIO’s recommendations for reducing the amount patients pay for drugs include reforming PBM practices and a range of other steps to ensure patients have access to needed medicines.

For example, automatic enrollment in the Medicare Prescription Payment Plan (MPPP) would make sure all patients have help in “smoothing” out payments over the course of a year.

Regarding “step therapy,” in which patients are expected to “fail first” on a cheaper medicine before receiving coverage for the drug their doctor prescribes, BIO calls for establishing clear exemption standards for patients in all types of coverage and eliminating step therapy for Part B drugs in Medicare Advantage.

BIO also encourages Congress to address other insurer practices that can restrict access, including eliminating copay accumulator programs, “so all forms of copay assistance count toward patient deductibles.” Furthermore, alternative funding programs (AFPs) that delay or prevent access by diverting insured patients to charitable assistance programs should be prohibited, BIO says.

Regarding PBMs, which use their market power to profit by driving up the cost of prescription drugs, BIO recommends several reforms, including:

• “Requiring fees to be transparent, delinked from medicine prices and formulary placement, consistent with fair market value, and not contingent on business conducted with PBM affiliates.”
• Insulating clinical decision-making from rebate and fee incentives.
• “Addressing vertical integration and associated value extraction enabled by self-dealing.”
• Expanding PBM transparency requirements.
• “Removing contractual barriers that prevent plans, employers, manufacturers, and patients from pursuing lower-cost options.”

Encouraging innovation to maintain U.S. biotech leadership

BIO notes the remarkable advances achieved through biotech innovation.

“Continued progress depends on a research ecosystem that supports scientific discovery, rewards risk-taking, and enables innovators to efficiently translate breakthrough science into therapies that reach patients,” BIO says.

BIO’s comments urge expansion of federal programs supporting translational research, such as the National Institutes of Health (NIH) and ARPA-H, as well as addition of new types of support for acceleration and commercialization.

Along with providing new treatments, innovation in the U.S. allows America to maintain its global biotech leadership in the face of China’s concerted efforts at competition, which can pose supply chain and security threats, BIO says.

“Investments in clinical trial infrastructure, regulatory modernization, workforce development, and manufacturing capacity can make the United States more competitive, while maintaining the scientific standards that distinguish FDA and the broader American system,” according to BIO.

China has become particularly competitive in conducting first-in-human clinical trials by enabling these trials to take place more rapidly there than in the U.S. BIO recommends several clinical trial reforms, including: streamlining regulatory processes, reducing operational burdens, improving patient participation and site activation, and modernizing Investigational New Drug (IND) requirements and review processes.

Overall, BIO recommends leaning into the natural strengths of the U.S. biotech ecosystem. “America’s advantage has always been its ability to innovate,” say BIO’s comments. Policies that drive innovation by enabling investment are therefore encouraged.

Read BIO’s full comments on the RFI.

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